5 coronavirus things: The huge financial impact of coronavirus on colleges, hospitals and school meal programs

In this special edition of 5 Things, Food Management highlights five things you may have missed recently about developments regarding coronavirus and its impact on onsite dining.

Here’s your list for today:

Urbana University seems to be the first Ohio college to permanently shut its doors due to financial pressure from the coronavirus pandemic. The small, liberal arts campus northwest of Columbus has long struggled with declining enrollment and financial problems. Franklin University, a private non-profit school in Columbus, acquired Urbana in 2014. Since then, Urbana has operated under Franklin as a “branch campus.”

Urbana may not be alone, as Moody’s Investor Services recently downgraded its outlook for the higher education market from stable to negative, predicting widespread instability as a result of the coronavirus crisis. Among its findings, it noted that the auxiliary areas of college operations such as housing and dining that colleges have come to rely more on for funding in recent years are facing revenue declines due to fee refunds and more classes shifting online.

Even pre-coronavirus, roughly 30% of both public and private colleges that Moody's tracks were running operating deficits, and the agency expects those institutions will have difficulties weathering an economic downturn. For about 5% to 10% of institutions, weak operating performance and low liquidity levels will make the situation even more dire, it suggests.

Related:5 things: Are some profiteering off school meal distribution?

Read more: Coronavirus pandemic closes Urbana University campus permanently

For hospitals in rural areas like the Deep South, the COVID-19 crisis is not only threatening to overwhelm ICUs with patients seeking treatment. It could also force many of them to close.

Ryan Kelly, executive director of both the Mississippi Rural Health Association and the Alabama Rural Health Association, said closing rural hospitals is his greatest concern.

“Not because of anything that’s their fault,” he said, “but because we have a shutdown right now and they make most of their money off of stuff that they’re not actually able to do.”

States across the country have banned elective procedures, like hip replacement surgeries and physical therapy, to make sure hospitals have enough staff and personal protective equipment to handle a surge of COVID-19 patients. The trouble is, Kelly said, in our current healthcare system, those procedures account for the bulk of the revenue that rural hospitals pull in.

Related:5 things: Safety concerns rising among dining workers still on the job

“If your hospital makes 75% of its money off of these outpatient programs that are now almost nonexistent, I mean, it’s not a death by a thousand cuts. It’s death by a thousand, you know, gunshots now,” Kelly said. “I mean, they are bleeding very, very fast.”

According to a recent report from the healthcare consulting company Chartis Group, more than 100 rural hospitals have closed since 2010 and roughly a quarter of all rural hospitals identified in the report are at risk of closing right now.

Read more: COVID-19 Crisis Threatens To Bankrupt And Close Struggling Hospitals In The Rural South

In communities around the country, schools may be the only institutions making sure that hungry children and their families are fed. They’ve opened grab-and-go lunch stations and started delivering meals to neighborhoods by bus. But some programs are also going broke, losing millions of dollars. School administrators fear that they’ll have to make deep cuts next year if the federal government doesn’t provide relief.

Even as schools have closed, their cafeterias have remained open. Their fixed food expenses have remained the same and, in some cases, even increased while their revenue has dropped precipitously because schools are serving drastically fewer meals than they would during a typical school year, leading to shortfalls that, by some estimates, could reach $19 million in larger districts in the next few months.

“Schools have literally become communities’ emergency feeding sites,” said Katie Wilson, executive director of the Urban School Food Alliance, a professional organization of the nation’s largest school districts. “This whole thing is starting to snowball into an immense amount of debt no one is really paying attention to.”

Read more: School Lunch Programs Are Rapidly Going Broke

While it’s an issue that mostly affects smaller independent restaurants and QSR chain units, a quirk between the recently passed Paycheck Protection Program and the stimulus bill that temporarily expanded unemployment benefits may make remaining unemployed more profitable for some workers, especially low-end foodservice workers, than going back to work and may lead to labor shortages in that sector of the market in the next few months even if an economic recovery begins.

The impact on many onsite dining operations won’t be immediate unless they have a wage scale that this quirk affects, but a potential longer-term result may be an expansion in automation in the commercial foodservice world, a trend already well underway before the coronavirus shut almost everything down, and a trend that may be encouraged in any case by post-COVID contagion fears as machines reduce human contact with food. That in turn would accelerate development of such technologies and produce economies of scale that will start making automation more affordable for more dining operations, including those in onsite environments.

Read more Restaurants’ bailout problem: Unemployment pays more

One generally expected impact of the coronavirus experience is an expansion in remote ordering and Penn State is getting ready. The University Park Undergraduate Association (UPUA), Penn State Dining and Penn State’s Association of Residence Hall Students have banded together to support the development of a mobile order-ahead option at on-campus dining locations.

To assist in advancing the initiative, they’ve launched an online survey to better understand students’ needs. UPUA passed legislation in support of mobile ordering in its last meeting of the semester in March. According to the legislation, a target pilot date for a mobile order-ahead program is slated for the fall 2020 semester.

Read more: UPUA, Penn State Dining Launch Mobile Ordering Survey

Bonus: White House coronavirus task force outlines phases for reopening restaurants, bars

Contact Mike Buzalka at [email protected]