Home Health care provider Financial stability of Philadelphia’s healthcare industry suffered during Omicron surge

Financial stability of Philadelphia’s healthcare industry suffered during Omicron surge


Although the financial health of Philadelphia businesses remained broadly stable at the start of the omicron variant of COVID-19 surge in December, there was one exception: health care and social assistance businesses. As the largest area of ​​the city, this encompasses thousands of healthcare providers, laboratories, and medical facilities.

The latest data from Pew’s Business and Jobs Recovery Dashboard in Philadelphia shows that 8.5% of facilities in the Care of Others sector experienced significant or moderate bill arrears in December 2021. That percentage was the highest offender share to date for these companies since the pandemic began, doubling their low point in 2020 and their biggest increase since a previous quarter. The spike contrasts with all businesses, whose share of serious delinquency fell slightly in December to 5.4%, approaching pre-pandemic levels.

Economists and lenders consider a company’s delinquency to its creditors — such as suppliers, banks, and credit card companies, but not owners — one of many important indicators of its health. The Pew Dashboard regularly monitors nine indicators on business and professional conditions and uses data from Experian’s credit bureau to track payments from Philadelphia businesses that are on average 31 days or more late. Payments made 31 to 90 days late are considered moderately late; 91 days late or more are serious offenders and a possible precursor to failure; one to 30 days late is slightly delinquent and not necessarily worrisome.

The health care and social assistance sector provides about a quarter of Philadelphia’s jobs and has historically withstood economic shocks. But COVID-19 has affected this industry more than most, with these business establishments leading all industries in net closure rates in Philadelphia since the start of 2020, according to workplace data from the Dashboard. .

A Deeper Dive into Credit Data

Among child care providers and assisted living facilities for the elderly, the increase in delinquent businesses has been dramatic. According to detailed Experian data not shown on Pew’s dashboard, 10.6% of child care providers in Philadelphia made payments 31 days or longer at the end of December, more than double their share 4.6% last June. About 16.3% of assisted living facilities were overdue in December, almost four times their share of 4.3% in June. These rates reflect payments due through November of last year, when omicron began ramping up in Philadelphia, but before additional relief funds became available.

About 23% of the city’s hospitals were seriously overdue in December, matching their peak last summer. A few other subsectors are doing better or holding their own, including nursing facilities; their share of offenders fell to 5.6% in December, although it rebounded a lot last year.

Select care companies behind on invoices

In childcare, experts said the increase was not surprising after a year in which enrollment plummeted, many small providers went bankrupt and relief funding came in more. later than expected. But experts have also expressed hope for progress when the labor situation improves and subsidies pour in from the US bailout.

“Many families using subsidized child care are low-income working families, especially in Philadelphia. They are also the ones who… do not return to work for minimum wage because of omicron. This means that they do not use these services for their children, which causes [providers] losing revenue,” said Mary Graham, executive director of Children’s Village and business coach for child care, in an interview.

In assisted living facilities, trade group Pennsylvania Health Care Association says a staffing crisis escalated last fall after Philadelphia imposed its vaccination mandate on healthcare workers, forcing facilities to rely more on temporary agencies. Those expenses have in some cases exceeded income and caused delays in paying bills, said Kevin Cysyk, the association’s vice president who works with assisted living facilities.

For hospitals, the offender share figure has gone up and down over the past year. The exact cause of the December increase was not yet clear to the organization responsible for tracking the sector’s finances, the Pennsylvania Health Care Cost Containment Council. Barry Buckingham, executive director of the council, explained that the suddenness of omicron appears to have caused a cash and personnel crisis at the same time. “It filled up all the intensive care units and chewed up resources at a time when staff were already sick and tired of COVID, and their staff were getting sick,” he said in an interview. A recent report of that organization estimated that by early September 2021, hospitals across the state had incurred COVID-19-related expenses and lost $6.9 billion in revenue.

According to preliminary data from the scorecard, employment in Philadelphia across the health care and social assistance sector was estimated at 164,000 in December, about 8,900 or 5.1% of less than in December 2019. If this estimate is confirmed next month, it would be the worst monthly decline in a year. And across all sectors, employment numbers in December were 7.6% lower than the same month before the pandemic, showing little improvement since last summer.

Health Care Jobs vs. All Industries in Philadelphia

How businesses in different postcodes are doing

Other notable takeaways from the latest dashboard data reflect positive news for downtown businesses. Their average financial stability and credit balances have remained at a healthier level than at the start of the pandemic. And the share of severely or moderately delinquent downtown businesses fell to 5.1%, approaching its low point in the pandemic. Its high point was 7.5% in March 2021.

The data shows that businesses in a dozen postcode areas – out of 52 monitored across the city – are showing signs of progress, hitting their lowest delinquency rate since the pandemic began. They included Market East (19107), Chestnut Hill (19118), Olney/East Oak Lane (19120), Manayunk (19127), Fairmont (19130), Holmesburg (19136), and South Philadelphia (19148).

But seven postcode areas matched or surpassed their December crime peak. These included Mt. Airy/East Mt. Airy (19119), Brewerytown/Sharswood (19121), Strawberry Mansion (19132), Port Richmond/Kensington (19134), Bridesburg (19137), West Oak Lane/East Germantown (19138 ), and Girard Estates (19145).

Pew’s research and policy initiative in Philadelphia will continue to monitor the city’s economic recovery in future dashboard updates.

Elinor Haider is the director and Thomas Ginsberg is a senior research and policy initiative officer at Pew in Philadelphia.