Introduction

As is painfully obvious, the world is in an unusual place: we are told that to survive, we must wear masks, social distance and wash hands often. The result has been fear and the worst depression since 1929. Hopefully, scientists will soon find ways to eradicate or minimize the virus’ effects so the world can return to “normal.” But the normal will be different in several important ways from what has gone before. In what follows, four “new normals” will be discussed:

• Consumer Spending
• Education
• Health
• Working Locales.

The driving force behind these changes is the need to stay away from others to avoid catching the virus. But there are derivative benefits from these enforced separations that will result in them becoming permanent.

1. Consumer Spending

In an earlier piece, I documented the move from in-person shopping to online purchasing. The purpose at the time was to document the labor-saving impact of the switch. The pandemic pressures to “distance” will only accelerate this move. In Table 1, Bluecore reports the increase in online sales by category for before and after the pandemic hit.

Table 1. – Online Purchase Growth by Sector

Source: Bluecore

Food shopping is going through a transformation. How long ago was it that food halls were popular? No longer. What has grown during the pandemic? Pick up, takeout, and delivery. People have even become uneasy about paying at registers in markets. I quote from a recent piece in the Boston Globe:

…avoiding checkouts entirely by shopping online is likely to grow in popularity and market share. With brick-and-mortar stores shuttered, there has been an unprecedented surge in online shopping, with transaction volumes in most retail sectors seeing a 74 percent increase in March, compared to the same period last year, according to ACI Worldwide, an electronic payments processing company.

US consumer habits have shifted significantly, with e-commerce sales jumping 49 percent in April after shutdown restrictions were issued throughout the country, according to Adobe’s Digital Economy Index. Many of the biggest retailers saw the biggest gains: Walmart’s online sales jumped 74%, Target’s were up 114%, and Wayfair has seen its stock price surge 24% as stir-crazy shoppers eagerly update their abodes.

2. Education

For many centuries, “schooling” has involved going to a classroom where teachers “teach.” The pandemic has changed this. We have come to realize that our schools are about a lot more that just teaching. They feed and provide daycare for students. And students socialize in schools, a learning experience in itself.

The digital revolution has started to change the education part of this. But progress has been slow as powerful teachers’ unions have blocked meaningful reform. However, the pandemic has accelerated changes with particular innovation coming in distance learning. Why and how? The pandemic has forced teachers and education administrators to work hand-in-hand to eliminate the need for classrooms and move instruction online.

It will not take all that long for institutions to realize they don’t need so many teachers and classrooms. The digital infrastructure can enable one teacher to instruct hundreds or thousands of kids. Why have 10 math professors teaching 10 sections in 10 rooms when one person can lecture to an infinite number online? True, the initial reports on distance learning are not all that good. But the process is underway and as we have found with other digital changes, after a period of learning and adaptation, things will improve.

Consider this: it is abundantly clear that different teachers have different strengths: some are good lecturers while others excel in interacting with students. That suggests the way forward might be to record the best lectures for students to listen to when convenient accompanied by in-person sessions where students and teachers interact.  

In passing, it is worth noting just how diverse distance learning methods have become. A partial listing includes: Computer Managed Learning (CML), Computer Assisted Instruction (CAI), Synchronous Online Learning, Asynchronous Online Learning, Fixed E-Learning, Adaptive E-Learning, Linear E-Learning, Interactive Online Learning, Individual Online Learning, and Collaborative Online Learning.

3. Health

The pandemic has dealt a critical blow to the health industry. As hospitals have been set aside for virus patients and regular health care postponed out of fears of virus spread, doctors, nurses and many hospitals have nobody paying them for the regular services they provide. The good news is that unlike most retail and restaurants, the health industry is finding ways to adapt and provide services. A major part of this is happening via the burgeoning telemedicine business.

This is nothing new. Since the 1950s, healthcare providers have been offering remote services. This allows patients to receive healthcare without leaving their homes. Telemedicine has grown to offer services in a variety of ways. This includes online portals managed by your personal physician, video software that allows for remote consultations, and apps managed by companies offering telemedicine services like HeyDoctor.

A good example: A neurologist friend works for a consulting firm that finds “business” from smaller hospitals that cannot afford a full-time neurologist on their staff. Brain images are taken and sent to the doctor. He reads them and then deals directly with the patient. Following discussions, he decides on the next steps and communicates them to the patient and primary care physician.  

Telemedicine allows you to discuss symptoms, medical issues, and more with a healthcare provider in real-time. Using telemedicine, you can receive a diagnosis, learn your treatment options, and get a prescription. And as suggested above, healthcare providers can even monitor readings from medical devices remotely to keep an eye on your condition.

There are three common types of telemedicine:

• Interactive medicine: Also called “live telemedicine,” this is when physicians and patients communicate in real-time.
• Remote patient monitoring: This allows caregivers to monitor patients who use mobile medical equipment to collect data on things like blood pressure, blood sugar levels, etc.
• Store and forward: Providers can share a patient’s health information with other healthcare professionals or specialists.

According to a telemedicine web site, large savings can result from its use:

• Access to a telemedicine provider can reduce the need to visit the emergency room. According to a 2017 study, the average telemedicine visit costs $79. The average doctor’s visit is $149 and the average trip to the emergency room is $1,734.
• To give you an idea of the cost of different services from one provider to the next, here’s a look at a few common conditions and the lowest prices in the GoodRx Telehealth Marketplace as of April 2020:
• COVID-19 assessment: Many providers are offering $0 consultations if you think you might need to be tested for COVID-19. Diagnostic testing is also now free for all Americans.
• General consultation: Talk to a primary care provider about any of your health concerns starting at $19 through K Health.
• Anxiety: The lowest price for an anxiety consultation is offered through Galileo at $9.
• Birth control: Talk to a provider about your needs and get a birth control prescription via virtual visits starting at $10 through GoodRx.
• Erectile dysfunction: A visit to discuss erectile dysfunction treatment options starts at $30 through GoodRx.

Telemedicine makes so much sense one wonders why it is only now “taking off.” 

The Key: Insurance Reimbursement

Until the pandemic, most health insurance providers would not pay for treatment unless you first visited the office of your health care provider to get a “prescription.” Efforts to limit the spread of the virus have changed all of this. Suddenly, office visits are discouraged and most insurance companies will pay for telemedicine.

Will it last? Open Secrets estimates that the health sector has provided $227 million in political contributions in the 2019-20 political year. Will the hospitals, doctors, and nurses be willing to keep this going once the pandemic has passed? The pendulum will certainly swing back a bit. But moving medical services online makes so much sense that most of this change is likely to last.

4. Working Locales

There have been many articles noting that because of the pandemic, work had to be done at home. But since then, studies have shown that when nearly all employees, worked from home, productivity did not fall. And beyond that, many workers preferred working “out of the office.” Nearly 70 percent of respondents in a recent Gallup survey reported working remotely during the coronavirus pandemic, and only 26 percent of those who did said they wanted to return to the office once they were allowed. Half of those working from home—49%—claimed to prefer their new setup.

Many large companies including Twitter and Facebook have announced permanent work from home for many of their employees. It appears that thousands of employees will permanently ditch their commutes for home offices.

This has obvious and problematic implications for commercial real estate. And city office space, in particular, should be a hard hit. For example, 90% of the 60,000 employees at investment bank Morgan Stanley have been working remotely during the pandemic.

Several Fortune 500 companies seem to be operating under the assumption it’s the latter. The COO of UBS Group AG announced this week that up to a third of the Swiss investment bank’s workforce could work from home in perpetuity. Twitter CEO Jack Dorsey emailed employees in mid-May letting them know they could work remotely as long as they’d like—even after the coronavirus pandemic fades—and Mark Zuckerberg made the same call at Facebook a few days later.

The number of components that factor into work locale decisions are endless, but chief among them is real estate expenditures. “As we head into a recession or economic downturns, all eyes are going to be on the opportunity for reducing cost,” said Kate Lister, president of Global Workplace Analytics. “And those big empty offices sitting out there are going to be a beacon for the C-Suite…. a typical employer can save about $11,000 year for every person who works remotely half of the time. And workers can bank between $2,500 and $4,000 a year working remotely half time.”
The International Monetary Fund has shown that economic collapses do not have as large an impact on “telework” as it does on other activities.