Sanjay Varshney, a senior vice president at Wells Fargo Private Bank and a former Sacramento State College of Business Administration dean, didn’t mince words about the economic outlook facing the United States.
While known cases of the coronavirus have increased to more than 1 million worldwide, with roughly a quarter of them in the United States, Varshney, a member of Comstock’s editorial advisory board, told listeners of a webinar hosted April 2 by regional investment firm DCA Partners that the second and third quarter of 2020 could see major contraction and negative growth.
But Varshney also offered a silver lining when asked for a local prognosis from moderator and DCA principal Curt Rocca, also a member of Comstock’s editorial advisory board. “Believe it or not, for the first time — I’m surprised to hear myself say this — we’re actually blessed, we are, with the kind of industries we have here,” Varshney told listeners. “Because we are a government town, and we are also very large on health care. Because our largest employers in Sacramento happen to be the Kaisers of the world, Sutters of the world and Dignity Healths of the world.”
A story in the April issue of Comstock’s, now on newsstands and due to publish online later this month, looks at how critical of a role health care plays in the regional economy. Among its strengths, the field is the largest private employer in the Sacramento region with around 150,000 jobs in health care or life sciences, according to a 2018 Brookings Institution report, and a $14.3 billion economic impact from hospital spending, according to a 2016 Hospital Council report.
Although that Comstock’s story was primarily reported in February, weeks before rapidly increasing numbers of COVID-19 cases spurred mass business closures, layoffs and orders for the public to stay at home, health care remains a strength for the Sacramento region.
Varshney told listeners he expected more severe local impacts for sectors such as restaurants and hospitality, but said overall, “I’m much more confident about Sacramento’s prospects than what’s going on in the rest of the country.”
Brian Jensen, a regional vice president for the Hospital Council, representing health systems in Northern and Central California, wasn’t on the webinar, but agreed with Varshney’s assessment. “I think Sacramento probably is in a better position than other communities to weather this period well,” Jensen told Comstock’s.
While Jensen said some surgeons might not be bringing in income due to the cancellation of elective procedures and that hospitals were “in a period of hurry up to wait” while trying to preserve capacity for coronavirus cases, he said the mood among his members overall was one of concern and resolve. “Health care leaders in all sorts of organizations are doing their part to be prepared,” Jensen said.
During the webinar, Varshney was optimistic, telling listeners that the public sector and health care would expand locally. “I think it’s going to be a huge opportunity for Sacramento because we already have a very large, well-established health care industry,” Varshney said. “And I think there’ll be more growth there.”
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