Specialist
Former Senior Executive at Tenet Healthcare Corp
Agenda
- US hospitals update – carrying capacity and ramifications if they are overrun
- Hospital revenues – quantitative analysis of revenue damage due to the novel coronavirus pandemic
- Short-term impact of COVID-19 coronavirus and how hospitals will adjust
- Outlook including best- and worst-case outcomes and long-term business recovery likelihood
Questions
1.
What key trends and themes are you following in the hospital sector, considering the coronavirus pandemic?
2.
What are your thoughts on the impact of deferred elective procedures? What are the hospitals charging for COVID-19 coronavirus tests? That’s including the cost of the test and the ED [emergency department] visit. How does this break with commercial players vs Medicare?
3.
What is the cost of a COVID-19 hospitalisation with and without ICU [intensive care unit] levels of care?
4.
What percentage of patients who are getting tested under the critical worker umbrella vs those that are doing the drive-through are ending up hospitalised? How much of that percentage ends up in an ICU?
5.
What is the percentage decline in elective surgeries nationwide or in the markets you’re working with? Is 80-90% a reasonable assumption? How long are they expected to remain at this sort of level? Is three months a reasonable expectation?
6.
What is the fallout from these nurse and doctor lawsuits for missed pay and occupational safety? What are the potential longer-term ramifications as this pandemic ramps up? How might that dynamic play out?
7.
What impact do you expect the elective surgery deferral loss alongside and the labour cost adjustments to have on revenue and EBITDA for 2020?
8.
What are the fixed and variable costs for hospital systems? How much cost can a hospital pull back, and over what time frame?
9.
Names such as Philips are charging four times sticker price for ventilators. How significant is the price inflation to hospital costs? Is there any expectation of regulation or price compression, or do you think it’ll maintain status quo?
10.
How might payer mix shift in the face of a potential economic downturn, given unemployment numbers continually rising and patients moving from commercial pay to Medicaid or even self-pay? What sort of financial impact could that have longer term?
11.
What are your thoughts on the government efforts to help hospitals thus far? What are your thoughts on the first round of USD 30bn hospital stimulus money? Some are critical of the use of Medicare fee-for-service reimbursements and not COVID-19 volumes on that front, as well the more recently announced USD 75bn coming in towards providers. How do you think these efforts will alleviate the pressures we’ve discussed, if at all?
12.
Quorum recently filed for Chapter 11. How should we think about valuation and asset write-downs in the case of bankruptcy?
13.
Are there any names at a higher risk of bankruptcy, or even regions or types of hospitals between for- profits vs not-for-profits?
14.
What are your thoughts on consolidation potential in this sector? Would you expect any further consolidation?
15.
How do you compare ASC [ambulatory surgery centre] performance with hospitals through the coronavirus pandemic? Do you think one is more exposed to a larger impact through the pandemic?
16.
How might a recessionary environment shift the landscape between ASCs and hospitals? Could there be a longer-term drag on hospital volumes, permanent compression, and an uptick on the ASC side given their more tempered cost structure? What could really shift the way healthcare is delivered here?
17.
Is there anything we haven’t spoken about that you think might be important to highlight?
18.
What is your 12-18-month outlook for US hospitals? What are the best- or worst-case scenarios?
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