Healthcare imploded in the second quarter

The U.S. economy shrank at an annualized 32.9% rate in the second quarter — the worst-ever contraction on records that date back to 1947. The staggering contraction beats the last record set in 1958 when GDP shrank at an annualized 10% rate. Any way you slice it, it’s an ugly, historic economic contraction.

Widespread lockdowns to contain the spread of the coronavirus pandemic ravaged the economy in a way that’s never been seen in modern times, and hope for a swift recovery has been dashed as cases have surged nationwide.

However, the pandemic has been very good for health insurers — largely because they don’t need to pay for procedures that haven’t been happening.

The value of healthcare services performed in America in the second quarter plunged to $1.69 trillion, from $2.26 trillion in the fourth quarter of 2019. The unprecedented drop was enough on its own to account for 9.5 points of the 32.9% annualized fall in second-quarter GDP.

sources:

1- https://www.axios.com/health/health-care-costs
2- https://www.axios.com/health-care-industry-coronavirus-pandemic-second-quarter-78f19a89-e7d8-4c91-927b-e6b49f7ee60a.html?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosedge&stream=business
3- https://www.axios.com/us-gdp-q2-coronavirus-contraction-worst-ever-ed533bbf-1113-47fa-aee2-6e66fb553977.html?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosedge&stream=business

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