By Frank J. Campillo
The World Health Organization declared COVID-19 an official pandemicon March 11, 2020, and the world quickly changed in a manner not seen in generations. The emergency developed into a global public health and economic crisis affecting the global economy at levels not experienced for a century. Sources such as the World Bank and International Monetary Fund estimated a contraction of the global economic to an annualized rate of -4.5% to -6.0% in 2020 because of the pandemic.
Advanced economic countries are projected to operate below their potential output levels through 2024, negatively affecting national and individual economic welfare. To offset the negative economic impact, major economic countries established a system of subsidies to aid individuals and businesses and also injected large amounts of capital into the pharmaceutical industry to help develop tools that were initially aimed at contact tracing and containing the virus, and ultimately develop vaccines to stop the virus. According to economic consensus, the economic downturn in 2020 was not as negative as initially estimated, because of the fiscal and monetary policies governments adopted.
The U.S. has spent an enormous amount of capital on programs to help individuals, support the unemployed, aid businesses, and help the states and territorial governments. In addition, it provided the financial resources to support testing for the virus, development of a vaccine, and ultimately inoculate the country against the COVID-19 virus. Since the pandemic started, the U.S. has enacted six major bills exceeding
$6 trillion to help mitigate the economic burden on families and businesses. Below is a summary of some of the major bills passed:
- The American Rescue Plan: Enacted on March 11 during the new Biden administration, the plan provided $1.9 trillion of additional federal relief in a variety of areas. This was on top of prior rescue bills that were enacted during the prior administration. The other bills enacted by the previous administration included:
- The Coronavirus Preparedness and Response Supplemental Appropriations Act: As an initial response, the legislation enacted in early March 2020 provided $8.3 billion in emergency funds for public health agencies and coronavirus vaccine research. The bill also appropriated $7.8 billion in discretionary funds to federal, state, and local health agencies, and allowed $500 million in mandatory spending through a change in Medicare.
- The Families First Coronavirus Response Act: Enacted on March 18, 2020, to provide economic support to those in need, the legislation totaled $192 billion. Some key components included enhancing unemployment insurance benefits, increasing federal Medicaid and food-security spending, requiring certain employers to provide paid sick leave, as well as family and medical leave. It also provided free coverage for coronavirus testing under government health programs.
- The Coronavirus Aid, Relief, and Economic Security or CARES Act: This $2 trillion dollar package was enacted on March 27, 2020, to address the economic hardships that the virus was imposing on families and businesses.
- The Paycheck Protection Program and Health Care Enhancement Act: Enacted on April 24, 2020, this act totaled $483 billion, provided an additional $383 billion in economic support for small businesses, another $75 billion in funding for hospitals, and about $25 billion to fund more testing for the pandemic.
- The Consolidated Appropriations Act, 2021: Enacted on Dec. 27, 2020, the act included $868 billion of federal support to help mitigate the economic impact of the COVID-19 pandemic.
The stimulus programs helped contain what would have otherwise been an economic abyss. Guam has been a large benefactor of the federal subsidies and received a large infusion of monetary aid at unprecedented levels. The combination of short-term capital infusion for the unemployed and business subsidies, and the long-term commitment to fund both the Earned Income Tax Credit and also covering the Compact of Free Association citizens residing on Guam under the Medicaid system will provide GovGuam with an unparalleled fiscal relief.
While the world seemed to be paralyzed by COVID-19, the virus provided a path to accelerate many trends in the healthcare industry that were already in progress.
The future of healthcare is taking shape in terms of delivery of digital healthcare with the adoption of technologies such as Telemedicine, Artificial Intelligence, Virtual/Augmented Reality, robotics, and nanotechnologies being augmented by the pandemic. The advances could not be more obvious as demonstrated by the speed in which vaccines were developed to fight the virus.
As the world continues to fight one of the biggest health crises, global healthcare spending (combined public and private health care spending) is expected to rise at a combined annual growth rate of 3.9% between 2020 and 2024 and is expected to reach more than $10 trillion by 2024. Healthcare growth in our island is also accelerating with the construction of the $1.2 billion multi-disciplinary medical campus that was announced by Gov. Lou Leon Guerrero.
According to an April 2021 World Economic Outlook prepared by the IMF, the global economy is projected to experience a stronger recovery in 2021 and 2022 than indicated in previous forecasts, with global growth projected to increase at a rate of 6% in 2021 and 4.4% in 2022. The report concluded that global economic recovery would occur at different speeds across and within individual countries, reflecting differences in the pace of vaccinations, the extent of policy support, and various conditions, such as the role of tourism in the economy.
While our island and the world are still not out of the danger zone, we have weathered the pandemic better than most jurisdictions and now must shift our efforts to ensure that the private industry, mainly our tourist breadbasket, is given the priority and support to recover from the pandemic. mbj
— Frank J. Campillo is the health plan administrator for Calvo’s SelectCare. He can be reached at [email protected].
