NEW ORLEANS, La. (WVUE) -The $2 trillion economic stimulus package nearing final approval on Capitol Hill will send $100 billion to hospitals including those feeling strain in Louisiana.
Walter Lane, Ph.D., a University of New Orleans healthcare economist, said local hospitals are seeing many more patients because of the novel coronavirus and that is consequential.
"The hospitals are getting swamped, you know, people are going to be working a lot of overtime,” Lane said.
Dr. Joe Kanter of the Louisiana Department of Health said the money that will flow into the state for hospitals as part of the stimulus package will have to be used for specific purposes.
"It will be for buying equipment, for paying staff and staff overtime and for doing physical modifications of their space to make it able to care for more acute patients in areas outside the traditional ICU,” Kanter said.
Still, he said it is good news as Louisiana has a very high rate of COVID-19 cases.
"I know hospitals are comforted that there is a reimbursement mechanism out there but I’ll tell you, to the hospitals credit they have not been waiting for the feds to sign this bill to start investing and spending money, every hospital in this city has ramped up everything they can do, they’re building out new ICU rooms, they’re hiring more staffs, they’re buying supplies,” Kanter said.
Lane said the unexpected health crisis will undoubtedly be painful for the healthcare industry.
"Obviously, the hospitals are going to be under a lot of stress,” Lane said.
And he noted that even in normal times hospitals usually do not operate with large profit margins.
"Yes, hospitals operate on very, very narrow margins. The ones that are doing well have about a 1 or 2 percent margin, so anything that really cuts into the revenues or increases expenses can make that margin go away very quickly,” Lane said.
The stimulus package also includes $370 billion for small businesses and local banks are a big part of the equation, in terms of handling the government-backed loans.
Sen. John Kennedy, R-Louisiana, said the idea is to help struggling businesses as quickly as possible.
"We have cut a lot of red tape and the idea is given that these are government-guaranteed loans, we're not saying that the banks should relax all of their underwriting standards, but we want to get the money out to the door,” Kennedy said.
Chase Bank spokesman Greg Hassell, whose region includes Louisiana and Mississippi, issued a statement in response to a FOX 8 inquiry on the topic:
“Chase is here to help all our customers: consumers, small businesses, mid-size companies, state and local governments, and large corporations.
We know that many of our local small business are being directly affected from this virus, and we are prepared to provide special care to them during these economic challenges.
Our Business Bankers have been in communication with our clients to see what we can do to support them through this difficult time. The SBA is working directly with states to provide targeted, low-interest disaster recovery loans to businesses that have been severely impacted to help overcome the temporary loss of revenue they’re experiencing.
When customers call with ability-to-pay issues, we have deferred payments, waived fees or extended payment dates for customers in need.
We’re closely watching current legislation to expand the SBA’s Loan Program or other government-backed programs. We’re working quickly to build the capability to deliver it to our clients.”
And Hancock Whitney Bank spokeswoman Trisha Voltz Carlson said, “Our intention is to participate in the SBA program.”
Rob Nichols, President and CEO of the American Bankers Association applauds the help that will be provided to small businesses through banks.
“We welcome the Senate’s strong, bipartisan action to help the nation respond to this unprecedented healthcare crisis. America’s banks are already taking steps to assist customers and businesses affected by COVID-19, and this legislation will allow banks to provide even more critical assistance to borrowers in their communities. "
Lane said help for businesses is important.
"Getting it to small businesses I think that’s a very good portion too, a good part of the program,” Lane said.
The House of Representatives is expected to give final approval to the package on Friday and President Trump has said he will sign it.