What will COVID-19’s long-term effects be on Rochester’s economy?
Rochester’s economy is heavily dependent on the healthcare sector. In 2019, Ron Wirtz wrote for the Federal Reserve Bank of Minneapolis:
It’s hard to overstate the influence of Mayo and the health care sector overall on the Rochester economy. Jobs in this sector have been growing steadily in Rochester, as well as at state and national levels. Today, jobs in the health care and educational services sector make up 40 percent of the Rochester job market—twice the state average.
Just as it can make sense to diversify your assets, it can make sense for an economy to be diverse, too, with economic activity not dependent on one particular sector. But few saw this as a particular problem for Rochester. In March 2020, Med City Beat wrote that the city was among the most ‘recession-resistant’ in the United States:
A large part of Rochester’s economic stability lies in the stability of its largest employer, Mayo Clinic. Clinic spokeswoman Duska Anastasijevic said the financial crisis of the late ‘aughts’ hurt Mayo’s bottom line, but didn’t deal an incredibly serious blow.
This in the very early days of the COVID-19 pandemic. Med City Beat wrote:
If current financial concerns over coronavirus (mixed an ongoing oil price war) send the American economy back into a tailspin, Anastasijevic says Mayo’s continued growth in the 2010s would better the organization to get through hard times.
“Is Mayo better able to handle a downturn today? From a financial perspective, yes, because we have a much bigger and more liquid balance sheet than we did in 2008,” said Anastasijevic. “From an operating perspective, we can apply the learnings of what strategies worked for us in 2008 and could re-implement the measures that worked well back then.”
Approaching 18 months on, we now know that the pandemic has had all manner of unforeseen consequences. One of these has been the rise in telemedicine. As Nora Eckert notes for the Rochester Post Bulletin:
Since the pandemic began, Mayo Clinic has seen an influx of patients. But only some of them traveled to Rochester.
…
Video visits skyrocketed more than 5,000% from 278 visits in February 2020 to 16,532 in December at Mayo Clinic-Rochester. Phone telemedicine visits also soared from 169 to 7,590 in the same timeframe, peaking at 24,670 visits in April 2020.
And, of course:
A looming question remains: How will this affect Rochester’s economy when much of the downtown and the largest private-public economic partnership in state history has been built with the presumption that many of Mayo’s patients will be visiting the city in person?
Eckert notes that:
…even as patients prepare to combat rare diseases or undergo complex operations, they may not be traveling to Rochester for the same things they once were.
“There are some things that we can still do remotely, even for patients who do end up having to be on campus for an operation or a specific treatment that might be only available at Mayo,” [Dr. Steve] Ommen [a cardiologist and the medical director for experience products for Mayo Clinic’s Center for Digital Health] said. The services that could be transferred to a telemedicine setting include determining eligibility for a procedure, adjusting dosages for medication or preparing for an operation.
Furthermore:
In addition to some aspects of specialized care being conducted remotely, primary care may be transferrable to locations outside the clinic.
Much of Mayo Clinic’s patients — 69% — are involved in primary or community care, not specialized care. Most of those patients are located in the Midwest, according to Mayo Clinic spokesperson Carol Berteotti.
“We have a larger proportion of that super specialized care, but we also have a very large community care group of patients that we’re responsible for who will still be receiving telemedicine that way,” Ommen said.
Local business leaders are reported to be sanguine for now, but even 18 months in, there is little certainty about where things will rest when the pandemic comes to an end.