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05.15.20

NP Connects - Conversation highlights for May 14, 2020

BY , Philip B. Taub

NP Connects brings together leaders from a variety of backgrounds to share real-time perspectives on the coronavirus (COVID-19) pandemic. In our most recent conversation, we were joined by guest speakers Dr. Greg Baxter, president of Elliot Health Systems; David Berry, founder & CEO at Integral, general partner at Flagship Pioneering; Peter Egan, leader of Nixon Peabody’s national health care practice; and Morgan Nighan, Partner at Nixon Peabody.

Latest on PPP

  • We are in the second round of the Paycheck Protection Program (PPP) and only $188 billion of the $310 billion appropriated has been allocated, perhaps due to confusion and fears raised by the additional guidance around who qualified to take the money.
  • The safe harbor deadline has been extended until May 18, affording borrowers additional time to assess and return a PPP loan without penalty.
  • Borrowers receiving a loan under $2MM are now presumed to be good faith borrowers and will not be subject to detailed review.
  • If a PPP loan is returned by May 18, the company might then be eligible for an Employee Retention Credit refund.

Current state of health care in COVID-19

  • Hospital business models turned negative in March when they turned their focus on emergency relief and had to stop profitable elective procedures.
  • Many saw revenues drop 55% or more while expenses remained constant or increased as PPE equipment was overpriced.
  • Recognizing that community hospitals operate on thin margins, the need now to recapitalize the health care system is immense.
  • Industry players will need to partner, acquire, or merge with others, otherwise some hospitals won’t survive. The likely closing of critical access facilities is troubling for our society.

Accelerating trends

  • Rapid telemedicine adoption by providers and patients is a bright spot.
  • Some providers had been evaluating implementation strategies for over a year and then had ten days to decide and deploy solutions. One health system went from 0 to 1,300 online visits in ten days.
  • This rapid adoption will remain as patients are more comfortable seeing health providers from the comfort and safety of their homes.
  • Consequently, some management teams are looking to shed significant office space in anticipation it will no longer be needed.

Drug development and vaccines

  • Drug development is changing rapidly in the COVID-19 era and will have lasting, positive effects.
  • Whereas it previously took 17 years for an innovation to change a cycle, the world is responding, adapting, and adopting change like never before.
  • Increased communication among practitioners is causing drug treatment adoptions at an unprecedented rate.
  • Data analysis is creating new solutions and allowing the world to identify problems even before they are diagnosed.
  • The urgency to create a vaccine has improved response times from the FDA to drug manufacturers. While many clinical trials have shut down, the current, improved communication and engagement is expected to carry forward.
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Christopher P. Keefe

Partner

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Philip B. Taub

Partner

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