Nearly all businesses (at least those that are not entirely vertically integrated) rely on other businesses and entities to supply them with goods and services. If suppliers collapse, downstream businesses are left to scramble for alternative sources.
Widespread economic shocks caused by the COVID-19 pandemic have exposed vulnerabilities in many supply chains - leaving some businesses flush with cash and others struggling to survive.
One example of this is the healthcare industry: overall healthcare utilization in the US has decreased significantly since the COVID-19 pandemic began. Unable to perform elective surgeries or host patient visits, hospitals are losing significant portions of their revenue, which is normally paid in part by health insurance companies. While demand for these services will likely rise again after stay-at-home orders lift, hospitals need short-term help.
The commercial health insurance industry has an opportunity and responsibility to help. With fewer healthcare visits to pay for, health insurance companies find themselves more cash-rich than usual (less reductions in income due to a decrease in employer-based insurance as millions lose their jobs). Recognizing that they need hospitals to stay in business in the long term, some insurers are offering advanced payments to hospitals that can be paid off as soon as routine procedures pick up in the coming months.
Another example of this is Publix, a large supermarket chain in the southern US, buying excess milk from its farmer suppliers who are struggling to sell, and donating surplus supplies to local food banks.
This model can be replicated elsewhere in the economy.