The hard-hit health care industry, including doctors’ and dentists’ offices, received the largest dollar amount of loans from the Paycheck Protection Program, according to federal data released Monday.
Businesses in the health care and social assistance field garnered a total of $67.4 billion in potentially forgivable loans, or nearly 13% of the total dollars distributed, according to the Treasury Department and the Small Business Administration. More than 506,000 loans were made in this industry.
This funding, aimed at keeping small and midsize businesses afloat during the coronavirus pandemic, is in addition to the $175 billion that Congress appropriated for hospitals and other health care firms to reimburse them for coronavirus-related expenses and lost revenue. That program has come under fire for not reaching many of the providers most affected by the pandemic.
Overall, nearly 4.9 million Paycheck Protection Program loans totaling $521.5 billion were made to a wide variety of businesses, including construction companies, law firms, schools, restaurants, tech firms and car dealerships, according to the data.
The program was a major component of the $2.2 trillion coronavirus relief effort Congress approved in March.
The health care sector has been hammered by the pandemic in two ways. Hospitals in hot spots across the country have been inundated by patients, many of whom require care that’s time-consuming but not highly reimbursed. Providers of all sizes were also slammed by governors’ orders to stop elective procedures, which typically bring in far more revenue. Also, many patients stayed away from doctors and dentists because of stay-at-home mandates and fear of catching the virus.
Smaller hospitals, primary care doctors and specialists, behavioral health providers, dentists, ambulance services and nonprofit community clinics were among the providers receiving loans as large as $10 million.
Hard-hit industry
The health care sector shed nearly 1.6 million jobs in March and April as the shutdowns took effect. Dental offices lost nearly 550,000 jobs, while doctor practices laid off more than 295,000. Hospitals shed more than 160,000 jobs in April and May.
The industry has since started rehiring. Dentists’ offices added nearly 447,000 jobs in May and June, while employment at doctor practices grew by more than 142,000 positions. Hospitals added 6,700 jobs in June.
But many of these practices have yet to fully recover. Some 97% of dental offices were open for elective care in mid-June, up from 3% in early April, according to an American Dental Association survey. Nearly two-thirds said they were seeing fewer patients than usual, however.
The steep drop-off in consumer spending on health care fueled the nation’s economic downturn in the first quarter, upending the conventional wisdom that the health care sector is largely immune from recessions. Nearly half the decline in overall US economic activity could be attributed to health care.
Nearly $132 billion remains in the Paycheck Protection Program. Congress last week extended the deadline to apply until August 8.