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.
- 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.