Bradley Partner Gene Besen Featured in Q&A with DBJ About Economic Impact of Coronavirus on Health Care Businesses

Dallas Business Journal

Media Mention

Bradley attorney Gene Besen was featured in a Q&A with the Dallas Business Journal on the economic impact that the coronavirus pandemic is having on healthcare providers and related businesses.

DBJ: What are your clients currently worried about in the midst of this crisis?

Besen: Many of our clients are on the front lines of the fight against COVID-19. Their singular focus is on preparing for a surge of patients and acquiring enough personal protective equipment and ventilators to protect staff and properly care for patients. On the other hand, some of our clients own and operate surgery centers and surgical hospitals that have been shut down by the ban on elective procedures. For them, the focus is on contributing to the greater societal health care needs, surviving this uncertainty, and, ultimately, having the ability to resume their practices when the peak of the crisis has passed.

For those affected by shortages of ventilators and PPE, what are the options to avoid price gouging and other issues?

The dislocation in supplies has led to a dramatic rise in cost for certain necessary protection supplies. In many instances, our clients are simply paying rates many times higher than normal to acquire the equipment they need. For example, one client agreed to pay more than five times its customary rate to acquire the coveted N95 masks.

Even as the supply chain normalizes and the peak of the crisis passes, PPE supplies will most likely remain in high demand. It is not enough to merely read your contracts with distributors/suppliers and prepare to enforce those agreements. Providers that are being the most proactive are beginning to engage distributors about their inventory, pricing, and the availability of sought-after supplies.

Is there a way to estimate the true economic impact on health care businesses?

Last month, the U.S. Surgeon General tweeted that all elective surgeries should be cancelled. Dallas’ Shelter in Place Order issued in late March went a step further and prohibits all elective procedures in Dallas’ hospitals, surgery centers, and other medical facilities. These orders are necessary to ensure providers on the frontlines have the supplies that they so desperately need.

While these government mandates are laudable, many businesses have been impacted by Dallas’ Order. While these providers strongly believe in and support the current measures to reduce the spread of COVID-19, they nonetheless have suddenly found themselves on the sidelines, unable to operate their surgery centers, wellness clinics, and practices. Everyone from orthopedic surgeons to distributors are currently unable to conduct business. So while hospitals are the front line of the fight, the health care industry broadly will experience a substantial economic impact.

The cessation of all elective procedures has severely impacted our health care-driven business/organization, what are the steps we can take?

Businesses that are not on the front lines are facing unprecedented economic challenges, and they are largely contemplating a range of options, including:
  • Reducing overhead/payroll
  • Engaging with landlords and lenders about forbearance/concessions
  • Applying for SBA loans intended to assist small businesses
  • Lobbying state and federal officials for further assistance for providers impacted by Dallas’ response to COVID-19

Now more than ever, it is critical for health care providers to engage their counsel and think strategically about all options—options that even a few weeks ago might have been unthinkable. As we all grapple with unprecedented times, we need to think thoughtfully about long-term goals while being creative about short-term strategies to meet those goals.

The complete article, “Is There a Way to Estimate the True Economic Impact on Health Care Businesses?” first appeared in the Dallas Business Journal on April 1, 2020.