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COMMENTARY: COVID-19 and the Health and Social Care Sector

Across the whole economy, no sector is affected by the current health crisis in quite the same way as our health and social care providers. 24 hour media coverage brings us updates about new hospital facilities built from scratch; nursing homes trying to shelter high-risk residents and sobering news about the toll of all this on those on the front line.

Was the sector adequately prepared to deal with the pandemic?

On an operational level, there has been a massive impact, particularly on staffing levels, combined with the lack of personal protective equipment (PPE). There has also been an apparent lack of focus on care workers who were often not considered “key workers” akin to those working within the NHS.

Testing of all care home residents and staff has now been brought to the fore, with demands that this be done as a matter of urgency. As we have seen over the past few days, the Government is seeking to pacify growing concerns, stating that they will ensure that testing is put in place as quickly as possible.

It is fair to say that no country was prepared for a pandemic on this scale nor for the speed at which it developed. It is certainly uncharted territory and there is a real threat that coronavirus could overload the social care sector. Yet, so far, the sector has shown resilience; operators, investors and lenders are working together to navigate this difficult period.

How are investors and financiers reacting?

The investor base (and financiers coming into the sector over the last few years) have taken a longer-term and sustainable view of the opportunities to invest in the sector. Whilst the more risk-adverse investors are adopting a “wait-and-see” approach, others are focussed on securing and protecting their existing portfolios as well as looking at future opportunities. Higher spending on care provision was already anticipated as a long-term trend, along with investment into more innovative care provision. However, in light of coronavirus we may see this accelerate, leading to infrastructure upgrades and other reforms within the sector.

How we can help

Druces’ Health and Social Care Team regularly advises operators, owners, investors, banks and other lenders in the health and care sector. In particular, the team has recently been advising a number of clients in connection with the acquisition and disposal of healthcare businesses, the restructuring of facilities to meet urgent demand over the last two months and advising on the applicability of the various Government relief packages available to business owners.

For further information and for advice in respect of any aspect of your healthcare business, please speak to your usual Druces contact or to our Healthcare Team:

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