It is long past time to rethink "reopening" in the context of the American health care system (I would argue a lot of other things too.) It is irrevocably altered; not good, not bad, just different.
Labor pressures are hitting all parts of health care with the most impacted being the lower wage positions at all sites of care and at all positions at less desirable places to work, like inpatient psychiatric hospital and nursing facilities. As health care is labor with little price controls in those periods between premium reset with payers, inflation must be accommodated in other ways, like reduced throughput, careful coding (aggressive perhaps?), and substitution. Other inflationary pressures include testing of health care workers and patients and supply chain disruption.
It is still health care, nothing will happen overnight but multiyear secular shifts continue to emerge.
It all makes the idea hunting for 4Q and beyond pretty interesting. Today we covered the major thesis drivers. Replay with timestamps:
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Replay Links: Health Policy/Unplugged Subscribers CLICK HERE for event details (includes video/audio replays and materials link) (For uncooperative browsers, cut and paste: https://app.hedgeye.com/feed_items/105284?with_category=48-health-policy) Timestamps: 0.00-0:15 Introduction 0:15 - 1:53 Health care ecosystem 1:53 - 4:31 Policy "Position Monitor," potential changes to our view 4:32 - 8:06 Labor Trends: Health care workforce, generally 8:06 - 11:22 Drilling down: Ambulatory services, hospitals and Other 11:23 - 13:26 Drilling Down: Hospitals 13:26 - 14:47 Labor: Kidney Dialysis Centers 14:47 - 18:00 The bright spots: diagnostics, biotech and scientific research, optometry 18:00 - 23:35 Inflation and labor costs; defined capacity of system; delayed response to costs by Medicare and others 23:35 - 29:43 More than One Way to Skin That Inflation Cat; ration access, coding acuity, differences b/w/ NFP and Taxable hospitals 29:43 - 32:54 Other side of the coin: insurer responses, substitution of sites of service 32:54 - 39:05 The persistence of testing, PCR in certain settings, POC and Antigen in other cases 39:05 - 40:22 The unvaccinated will always be with us 40:22 - 44:59 Improving scale and speed: antigen testing, Navica platform and costs of substitution 44:59 - 50:31 Vaccinations around the world and impact on trade and inflation 50:31 - 53:37 Coming soon, distributed clinical trials? 53:37 - 59:45 Q & A: Long COVID, capital expenses |
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Emily Evans
Managing Director – Health Policy
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