Pandenomics – a new way to structure healthcare

At Africa’s balcony looking over to Europe from Tangier in Morocco, the mountains of Spain in the near-distance retain their allure for sub-Saharan migrants who wait for the slightest possible chance to cross the Strait of Gibraltar.

However, they have also started to trigger a spine-chilling fear among Tangier residents worried about an invasion coming the other way from coronavirus-struck Spain.

The “enemy of humanity” has become a catchy tagline for many pundits not only in the medical field but also in financial sectors as fears grow about the toll the virus will take on economies.

Rather than viewing the current chaos in stock markets as an unstoppable Armageddon, however, this health crisis could open a new chapter in the way we approach collaborative frameworks in the healthcare sector and how we incentivise partnerships between the public and private sectors.

Primarily resorting to open-ended bailouts of non-medical entities such as banks that are “too big to fail” as the Trump administration is doing through its stimulus package is an inefficient way of addressing the current health crisis because it does not incentivise treatment of patients and, by extension, does not help with getting the pandemic under control.

It might be more sensible for health officials around the world to consider motivating private hospitals and healthcare providers to accept the transfer of coronavirus patients from overwhelmed public hospitals.

This does not just mean paying private hospitals to take in coronavirus patients, a move which would make countries poorer and in more debt.

Perhaps a promise of future tax reductions for private hospitals that take on care for COVID-19 patients would help to provide the assistance needed for public healthcare in its time of desperate need.

Such a strategy of “present pain, future gain” may actually be a way to cope with this crisis, although it should be noted that such a system could only work during acute health crises such as an epidemic. It would not be sustainable on a long-term, protracted basis.

Here is how they could do it: First, private hospitals would reach a consensus among themselves regarding the average cost of care for each COVID-19 patient according to age group. Let us say (purely hypothetically) it was $100.

Next, each group representative would approach its respective government health ministry and submit a proposal for a future tax reduction – let us say in this case, $120 – that would see the private healthcare sector rewarded with a baseline profit per COVID-19 patient accepted during this time of need.

An additional bonus tax reduction could also be awarded depending on the clinical outcome of each patient, according to his or her respective age group.

Such an arrangement could alleviate the intolerable strain on public hospitals right now and also dilute a government’s financial losses caused by this crisis over a more prolonged period.

It could also benefit the private healthcare sector. Private hospitals all over the world are incurring heavy losses in the same way as other businesses because of lack of movement and activity.

Much of the revenue stream generated by private healthcare providers comes from non-urgent surgical procedures that are relatively time-tolerant such as lumbar hernia and varicose vein operations.

Thus, it is reasonable to assume that it would be in the interests of both the government and private healthcare providers to enter such a credit-based arrangement.

If profitable enough, this could also prompt investors from other economic sectors to divert investment into private healthcare institutions and, therefore, expand operations in order to treat as many COVID-19 patients as possible to profit from future tax breaks.

Private hospitals would benefit from the capital injected by investors, and be able to acquire the medical supplies – ventilators and sterilisation equipment, for example – that would be needed to treat transferred patients.

By incentivising the treatment and care of coronavirus victims, we might be able to climb our way out of this mess.

And private hospitals may not be the only entities that could take part in this strategy. Hotels, which have suffered a major setback with the drop in domestic and international travel, may also be able to assist in providing extra beds for high numbers of patients needing hospitalisation under a similar future tax-reduction arrangement.

Transforming hotels into temporary places of care and quarantine, where private hospital teams can expand operations, may form the basis of a symbiotic, trilateral relationship between governments, private hospitals and hotels.

National healthcare systems that incorporate such a form of business-driven partnership between the public and private sectors during acute health crises may be better positioned to mobilise funds and secure much-needed medical equipment.

Focused private investment would lead to higher efficiency and a more robust purchasing power compared to national systems that rely solely on more bureaucratic government initiatives to procure medical supplies.

Could pandemic economics – pandenomics – be our answer to the COVID-19 crisis?

The views expressed in this article are the author’s own and do not necessarily reflect Al Jazeera’s editorial stance.