What Does Betting On The Bull In The Health Care Industry Mean?

The news media and social media have been full of rumors, questions, and speculative bets on the future of the health care industry. One of the most popular topics has been on whether or not hospitals will be able to survive in the upcoming months. Many people have taken a gamble on whether or not hospitals will be able to stay in business. Perhaps unsurprisingly, most have lost money.

The pandemic caused by the new coronavirus shook the world of health care. The outbreak was unexpected and out of control, and it took multiple nations around the globe a lot of time to recover from the ripple effects of the pandemic. In the United States, the number of people who died from the COVID-19 pandemic was higher than the number of people who died in the 9/11 terrorist attacks and the Great Recession combined. The spread of the virus was dramatic, and hospitals had to make unprecedented adjustments to care for the sick. As a result, the health care industry saw a 41% decline in admissions and a 28% decline in surgeries during the height of the pandemic. This was mainly due to health care providers being unable to provide quality care for people who were unwilling to be separated from their loved ones and preventative care for people who might otherwise go undiagnosed. In response, many hospitals have been forced to adapt or close.

Will Hospitals Survive This Crisis?

Prior to the pandemic, almost no one bet on the future of the health care industry. The only people who placed bets were either very rich or very poor, and they almost always bet on professional football or baseball games. The health care industry was simply too unpredictable, and there were too many factors that could affect hospital finances. For example, higher taxes (resulting from the Affordable Care Act) and a growing number of health conscious and digitally savvy consumers who want to avoid going to a hospital if at all possible.

With the world’s attention focused on the health care crisis, there has been a lot of speculation as to whether or not hospitals will be able to recover and continue providing high-quality care. A number of articles have been written predicting the demise of the hospital, and many people have taken a guesswork approach to placing bets on the future of the industry. Unfortunately, most of these articles and bets have been on whether or not hospitals will be open for business in the near future. Few have actually looked at what will happen to hospital revenues and how much money hospitals will actually make during this time.

What About Hospital Revenues?

Hospitals are a valuable asset to any community. Not only do they provide critical care during times of medical emergencies, but they also generate considerable revenue through medical procedures, surgeries, and tests that are performed on site. During this time of crisis, hospitals have been scrambling to change how they do business to remain financially viable. One of the most popular methods has been to charge higher prices for procedures and tests in an effort to make up for the lost income during the pandemic.

To determine whether or not hospitals will be able to absorb the financial burden caused by the pandemic, one has to look at a number of factors. First, we need to establish how expensive hospital care was previously. In 2019, the American Hospital Association (AHA) provided a detailed look at hospital costs for different types of procedures and tests. They found that inpatient costs are generally fairly stable from year to year and vary only modestly by hospital, procedure, and test. The most expensive section of the hospital was the ICU (intensive care unit), where treatment is very intensive and patients require specialized equipment and close monitoring.

On the other hand, outpatient costs vary significantly from month to month and are generally more expensive than inpatient costs. For example, a typical office visit to a primary care physician costs about $150 and an inpatient visit costs about $2,600. Adding more complexity to the matter, the cost of an EKG (electrocardiogram) alone is about $1,000, not including the price of the machine itself.

As we’ve established, hospital costs are determined mostly by a number of factors, including the number of patients treated and the complexity of their treatment. It’s also important to determine what the revenue source is for the hospital. Are patients paying out of pocket, are they insured, or are they getting financial support from the government?

If we assume that hospitals will see a 28% decline in surgeries as a result of the COVID-19 pandemic, we can estimate the revenue that will be lost. We’ll use the American Hospital Association’s data on how much hospitals earn per procedure to get an accurate estimation. Going forward, we’ll assume that all surgical procedures will decline by 28%, and we’ll use that figure for the purpose of these calculations.

On the other hand, if we assume that all procedures will continue to increase by 5%, then that figure will need to be used instead. Whatever the case may be, one thing is for sure: Revenues from medical procedures are not going to make up for the massive revenue losses incurred due to the pandemic.

As a result of the pandemic, our team at New England Real Estate Investments (NEREI) has predicted that the demand for hospital rooms will diminish, and we’ll need fewer doctors and nurses to staff hospitals. In fact, one of our real estate brokers has stated that he expects a lot of office buildings to be converted into medical buildings once the pandemic subsides.

How Has The Health Care Industry Changed Due To The Pandemic?

Due to the COVID-19 pandemic, we’ve witnessed a sea change in the health care industry. Health care providers have had to adapt and change how they do business, and it’s been challenging to keep up with all the new rules and regulations. Even those who worked in the industry prior to the pandemic are still trying to figure out how to implement the new changes and ensure they remain compliant. Fortunately, the world is a much smaller place now thanks to the digital age, and it’s much easier to communicate.

The first and most critical step to adapting to the new paradigm is to review and overhaul your EHR (Electronic Health Records). During this time of crisis, much of the digital communication that takes place throughout the health care industry is recorded and stored in electronic form. This means that if you want to remain connected with your patients, you’ll need to integrate and store their medical records in the same digital format. In addition, as more and more of our lives become digital, doctors are seeing the value in making medical records accessible online as well. Having all of the patient’s previous medical records accessible whenever they need them makes medical treatment much more efficient and gives them a fighting chance at staying healthy.

What About Alternative Care?

In addition to hospitals, the COVID-19 pandemic also affected the alternative care industry. While hospitals had to make adjustments due to the limited number of available beds, alternative care providers had to make adjustments due to the lack of available healthcare professionals.

As a result of the pandemic, many in-home care agencies have adjusted their operations to become more efficient and have cut back on the number of hours that their live-in caregivers work. In some cases, such as nurse practitioners, they’ve had to take on more clients since it’s much easier to have multiple clients than it is to have one large client. Many also have had to adjust how they bill since it’s no longer acceptable to charge for each visit to the client’s home.

How Is The Economic Impact Of The Pandemic Being Handled?

The impact of the pandemic on the economy is being handled in a number of ways. Since most businesses and professionals halted their daily routines as a result of the pandemic, a lot of jobs have been eliminated, and many businesses have gone out of business completely. The global economy is still struggling to regain its footing, and it’ll be years before we see the effects of the pandemic unfold completely.

Many companies and sectors have been decimated by the pandemic, and it’s been a hard blow to the economy. Healthcare and pharmaceuticals have taken the biggest hits, as we’ve established. It’s also important to keep in mind that all sectors, including retail and restaurants, have closed down, so there hasn’t been any economic activity at all for many businesses. Naturally, this has serious implications for salaries, benefits, and employee morale.

Should I Bet Against The Hospital?

It’s a complicated question whether or not to bet against the hospital. One could argue that since we’re all living in relatively safe and stable times, there’s no need to worry about whether or not the hospital will survive. However, during a crisis like this, where the world is at the edge and safety and certainty are a thing of the past, it might be smart to bet against the hospital.