The financial position of Philadelphia’s business was nearly stable at the start of the COVID-19 Omicron variant surge in December, with one exception. It is a healthcare business and a social support business. As the city’s largest sector, it includes thousands of healthcare providers, laboratories and healthcare facilities.
The latest data from Pew’s dashboard tracking Philadelphia’s business and employment recovery shows that 8.5% of business establishments that take care of others significantly or moderately delay invoices in December 2021. It shows that. The pandemic began, doubling the lowest score in 2020 and the highest increase since the previous quarter. This surge was in contrast to the entire enterprise, where the rate of severe delinquency dropped slightly in December to 5.4%, approaching pre-pandemic levels.
Economists and lenders, who are not landlords, see corporate delinquency with creditors such as suppliers, banks and credit card companies as one of many important indicators of their health. Pew’s dashboard regularly monitors nine indicators of business and work status and uses data from the Experian Credit Bureau to track Philadelphia’s business payments, which are on average over 31 days late. Payments made 31-90 days late are considered moderate delinquency. Being late for more than 91 days can be a terrible delinquency and a precursor to failure. If you are 1 to 30 days late, you will have a slight delinquency and you don’t have to worry about it.
The Healthcare and Social Support sector provided about a quarter of Philadelphia’s work and was historically resilient in the midst of economic shocks. However, according to dashboard work location data, COVID-19 has the greatest impact on the industry, with these establishments leading all sectors in Philadelphia’s net closure rate since early 2020. ..
Credit data details
At life support facilities for childcare workers and the elderly, the number of delinquent businesses is increasing remarkably. According to detailed Experian data not shown on Pew’s dashboard, 10.6% of Philadelphia’s child care providers paid for more than 31 days in late December, more than double their share of 4.6% in June last year. became. Approximately 16.3% of assisted living facilities were delinquent in December, almost quadrupling the 4.3% share in June. These charges reflect payments made by Omicron until November of last year, when Omicron began to surge in Philadelphia, but before additional relief funds became available.
About 23% of hospitals in the city had a serious delinquency in December, comparable to last summer’s highest point. Several other subsectors, especially long-term care facilities, are performing better or are more stable. Their delinquent share plummeted to 5.6% in December, but fluctuated significantly last year.
Childcare experts said the increase wasn’t surprising a year after registrations plummeted, many small providers went bankrupt, and relief funding was slower than expected. However, experts also expressed hope for progress as labor conditions improve and subsidies flow in from the US rescue program.
“Many families taking advantage of subsidized childcare are low-income working families, especially in Philadelphia. They are also … those who do not return to work at the minimum wage for Omicron. That is because they are children. Means not using these services for us, which is the cause [providers] To lose income, “said Mary Graham, executive director and childcare business coach at Children’s Village, in an interview.
At the Assisted Living facility, the Pennsylvania Healthcare Association, a trading group, said the staffing crisis worsened last fall after Philadelphia imposed vaccination obligations on health care workers. In some cases, these costs outweighed the income and caused invoice payment delays, said Kevin Saisik, vice president of the association, who works at a living support facility.
For hospitals, delinquency share numbers have skyrocketed over the past year. The exact cause of the December increase was not yet clear to the Pennsylvania Medical Expense Control Council, the organization responsible for tracking the sector’s finances. Barry Buckingham, managing director of the council, explained that the sudden emergence of Omicron seemed to have caused both cash flow and staffing crises at the same time. “When staff were already fed up with COVID and were sick, it filled all ICUs and chewed resources,” he said in an interview. By early September 2021, state hospitals were estimated to have supported COVID-19-related costs and lost $ 6.9 billion in revenue, according to a recent report from the organization.
According to preliminary dashboard data, Philadelphia’s overall healthcare and social support sector employs an estimated 164,000 in December, about 8,900 or 5.1% below December 2019. Worst monthly decrease in one year. Also, in all sectors, employment in December was 7.6% below the same month before the pandemic, with little improvement since last summer.
How companies with different zip codes are moving forward
Other notable points from the latest dashboard data reflect positive news for Center City’s business. Their average fiscal stability and credit balance were more stable than they were in the early days of the pandemic. In addition, the share of the Center City business with severe or moderate delinquency dropped to 5.1%, approaching the pandemic’s lowest point. The highest score was 7.5% in March 2021.
Data show that companies in 12 of the 52 zip code areas monitored throughout the city are showing signs of progress, reaching the lowest delinquent share since the pandemic began. I am. They include Market East (19107), Chestnut Hill (19118), Olney / East Oak Lane (19120), Manayunk (19127), Fairmont (19130), Holmesburg (19136), South Philadelphia (19148). It will be.
However, the seven zip code areas coincided with or exceeded the peak delinquency in December. These include Mt. Airy / East Mt. Airy (19119), Brewerytown / Sharswood (19121), Strawberry Mansion (19132), Port Richmond / Kensington (19134), Bridesburg (19137), West Oak Lane / East Germantown (19138), and Girard Estates. (19145).
Pew’s Philadelphia Research and Policy Initiative will continue to monitor the city’s economic recovery with future dashboard updates.
Elinor Haider is Director and Thomas Ginsberg is Senior Officer of Pew’s Philadelphia Research and Policy Initiative.
