Transcript :
Speaker 1 (
All right, we're going to go get started on this. So our last panel in this breakout for the day, is assessing challenges and opportunities in the healthcare sector. Rich, please take it away.
Rich Saskal (
Good afternoon everybody. Thanks for coming. Hopefully we'll make the time between now and the refreshment hour worth your time. My name's Rich Saskal, a managing editor at the Bond Buyer. And let me briefly introduce my panelists directly to my left is Brian church Chief Financial Officer and Chief Administrative Officer for the Phoebe Putney Health System in Albany, Georgia. And we have Kevin Connolly, a director at Assured Guaranty, where his responsibilities include being a senior underwriter in public finance healthcare, and Matthew Cahill, Assistant Vice President analyst in the healthcare ratings group at Moody's Investor service panelist called Challenger and Opportunities. Obviously over the last three years, the challenges have taken center stage both for the sector and society as a whole. Let me start with Matthew. Can you give us kind of a 30,000 foot view about what the sector is facing today?
Mathew Cahill (
Yeah, sure Thing Rich. Thanks. For those of you not familiar with the healthcare sector, the sector continues to face unprecedented challenges. We went negative on the sector in March, 2020, so right when the pandemic hit. I believe at this point all the rating agencies are either negative or deteriorating in terms of the outlook and what we've seen the past 18 months in particular really is a perfect storm of challenges on the operating side. So the main drivers, the labor shortage you've probably heard about it on the news and that was something that was in play prior to the pandemic but really has been exacerbated and upended the industry in a big way. Secondly, you've had large increases in supply expenses. So we actually published our preliminary medians this morning. So I can tell you we are seeing about 30% increases in the supply costs in 2022 versus pre pandemic levels in 2019, not unlike other industries. And actually if you heard Mark Zandy yesterday, he forecast that healthcare inflation may be coming down. So potentially some good news on the horizon, right? I'm a Moody's guy in Zandy we trust. So hopefully he's right there. And then lastly, you have some pandemic and labor related volume disruption, which has hurt on the revenue side, especially during the omicron surge in Q1 of 22. And then recently, it seems like a long time ago, but Q1 of 23 you had the triple demic. So you had RSV flu covid all at once causing many health systems to defer revenues and volumes there as well. So really a perfect storm the last 18 months. Notably when you look at 22 versus 2020 and 2021 in the pandemic, there's the absence of provider relief funds. So the CARES Act, the American Rescue Plan. Now we heard about that in some of the panels earlier this morning about the billions of dollars pumped into the healthcare system, but also local governments and that really bolstered financial performance for our sector and helped our rated portfolio weather through 2020 and 2021. So not having that in 22 has been a big difference maker in terms of weaker financial performance. For context in 22, again, we just published our preliminary medians this morning and we're looking at EBITDA margins for 22, around 5%. So what we call operating cash flow EBITDA margins. That compares to historical levels of eight to 9% year in year out. So 22 is looking to be about half the historical level. 23 we're forecasting, not much better, five to 6% operating cash flow margin. So 23 will be a year of recovery and hopefully 24 will start to see the turn back to historical levels. For many health systems, it's going to be a longer ramp to get back to historical levels for many systems, frankly, we don't know if they're going to get back to the historical levels. So we're trying to watch and see what the new normal is for the industry in terms of operating performance. And that's just the operating side. So balance sheet, similar story 2020, 2021, you had these great investment returns bolstering the balance sheet. You had federal stimulus funds in the form of Medicare accelerated payments. So these were essentially interest free loans that our health systems could apply for and they bolstered the balance sheet in a big way. So we calculated about 30 to 40 days cash on hand. Unfortunately those had to be paid back by fiscal 22. So you fast forward from 21 and now in fiscal 22 the Medicare is paid back, you know, have the weaker operating performance and you have a 20% decrease in the investment markets. That's been a recipe for some credit deterioration in the sector so that those health systems that were most affected probably around 20% of our portfolio, that's where you see some of the negative rating actions we've taken. But it's not all doom and gloom. 80% of the portfolio is managing through liquidity is holding steady for many. I'll tell you that leading up to the pandemic, there was several years of steady performance and many health systems were able to build their balance sheets and help absorb the stress we're seeing Now. I know we have Brian on the panel, he'll talk about that. But yeah, I'll just end with this little plug here that if you are interested in how we're managing our ratings, we just put a piece out on Tuesday of how we're managing the turbulence here in the healthcare sector, but certainly a stressful time to be in healthcare.
Rich Saskal (
With that, why don't we turn to Brian who managed it firsthand. Actually your community was one of the first places to be hit noticeably hard by Covid, though everyone else soon followed. But can you talk about how the challenges pandemic created specifically impacted your system.
Brian Church (
Sure. Brian Church Putney Health System, Albany, Georgia. I think first off, thanks Rich and the Bond Buyer for inviting me. I think part of the reason why I'm here is early in March of 2020, Washington Post posted an article that said Lombardi, Italy, Wuhan, China and Albany, Georgia were the three hot spots across the world per capita for covid infections. So we got pre hit pretty hard. We were the first to get hit on the east coast of the United States and had a very early and high magnitude hit from Covid and experienced Delta Omicron and all that. Phoebe Putney's about 5,000 employees. We have four hospitals. We serviced pretty much the southwest corner of Georgia, 26 counties, a very large service area, about 800,000 population in that manufacturing, farming, agricultural are big in southwest Georgia. But we definitely had the full covid experience. I'd give a little bit of color to what Matt said and Matt was is obviously as usual all over it. If you think about labor and healthcare, the American Hospital Association reports that there'll be a 3.2 million healthcare worker shortage over the next 10 years that there's 1.1 million nurses that are going to be needed by 2030 from what we currently have today. So those were challenges that we had prior to Covid. And Covid has just exasperated that a lot of our nurses, the average age of a nurse was over 45 years old. A lot of them retired out or they went to more of a part-time status because they had to take care of kids at home or they had elderly parents at home that they had to take care of their daily needs. So a lot of those caregivers stepped out of the workforce over the last couple years and getting them back has been a real challenge. On the clinical side, let's first talk there, RNs, respiratory therapists, doctors, Kaufman Hall reports that labor costs are up 37% from 2000 to 22 for health systems. And I can tell you personal experience, that's absolutely true. During covid, we were paying as high as $190 an hour for contract labor that's come down. Now we're right around an average of about 87 to $88 an hour for a contract nurse, but that still is two and a half times what we would pay a normal nursing salary, right around 35 to $40 an hour. So that that's the clinical side. But I'm in Texas, so I needed to point out one thing for you all. On the non-clinical side, housekeeping food services, I have employees that screenshot or take pictures of the Bucky signs in Georgia on top of the gas pumps. I dunno if y'all heard of Bucky's, it's a small gas station, very, very low key. They don't try to make a big deal or anything, but they're in Georgia like crazy. Now they're building nuts and I know they started in Texas, but they'll take a picture of the top of the pump that says 17 to $19 an hour starting pay. That is transformational in Georgia. That is not what a housekeeper makes in South Georgia. So we're getting a lot of pressure and it's not just Dunkin Donuts, McDonald's, not just on the clinical staff, but also that the non-clinical staff. Drug costs is also another area that we've seen just exponential increases. I think some of this is due to the pandemic, but a lot of it's due, I think to profit taking by big pharma, whether it be oncology drugs. We're seeing shortages right now in our formulary. We've got about 2,800 drugs in our formulary. About 380 of those currently are on shortage status back order. Some of that's because of the plants in India, China that have not been able to produce. Some of it is the drug companies. They've got new patent protection strategies where a drug will be patent protected for 10 years and now they're finding ways to extend that for another 10 years or another 20 years. And then specialty drugs has become a very hot thing where drug companies will design very narrow drug formulations for very specific cancers. So maybe 20,000 people a year have this cancer and those drugs, some treatments can be 50 to $60,000 of treatment and sometimes the patients need 10, 20 treatments. So you can see how the numbers stack up pretty quick on the supply side. Matt covered a lot of that. We're seeing rolling shortages. I think the best way to describe it to you, and we're still seeing those is in the past year we've been short on baby formula and we've been short on radioisotopes. So we've had to scramble to try to find ways to get baby formula to our NICU, but we've also had to postpone cts and other procedures that require radioisotopes because those have been short. So it's really the full spectrum of supplies on the construction side, pretty much if you're renovating or if you have new construction, it's about a 40% inflation over the last three years. So something that cost 10,000,003 years ago cost 14 million today to build. So we're definitely seeing pressure on that as well. And on the revenue side, Matt talked about that as well. Our largest payer Medicare, they have as usual gone the black box and determined that with all this inflation that's going on, hospitals will get 2.8% next year, have no clue how they come up with that and how they manage their inflation numbers. But that is not what we've been seeing. So really rich, other than that, everything's going great.
Rich Saskal (
Kevin, can you talk about what you're seeing sector wide from your perspective in the bond insurance side?
Kevin Conolly (
Sure definitely. Thank you Rich, and thank you to the Bond Buyer for inviting me on the panel. I don't mean to add to the doom and gloom that you've heard already, but from our perspective, at assured we ensure about a hundred different hospitals ranging from single sites to larger health systems. And we've got about 11 billion worth of exposure to the health system hospitals across the country. And similarly, we are definitely seeing the labor issues. Historically, when you look at labor, IT labor makes up about 50% of a hospital's expense base the last couple years that's shut up to about 60 may, sometimes even over 60% of the expense base. And that is not a sustainable business for hospitals and health systems that typically only make one to 2% margins on their business. Just to piggyback off of what Brian was saying, over the last three, four years, a lot of our new insured deals took on significant construction projects ranging from complete replacement hospitals to new emergency departments to new wings, you name it, especially in the northeast where real estate is a little more scarce, you've seen a lot of conversions from double occupancy rooms to single occupancy. And these projects, not all the projects that we ensure, but we've heard and we know that these projects are going through cost overruns, not only from the supply side, but also depending on when they were actually started labor issues on the construction side also. So magnify more debt on a project, you could see each could do the bath it strains, balance sheets here.
Rich Saskal (
How do you see things settling? The labor front in particular is driving a lot of these challenges. Have we reached a new normal yet or how would we know? I'm going to start with Matthew.
Mathew Cahill (
Yeah, sure. And that's a great question Rich, and to Brian's comments earlier, the agency helps, this is the temporary nursing help that really spiked on the Omicron surge. So Brian mentioned at leave one 90 at Phoebe. So we saw the going rate at the peak reach, I believe $250 an hour for an ICU nurse. So again, four times the pre covid rate that has since settled down to the low 100 s, $120 an hour. Again, to Brian's point, still high, I think there might be some room to come down a bit, but I believe that's going to remain elevated to combat these agency costs. Health systems had to make market adjustments, offer sign on bonuses over time premiums to get their staff who's already burnt out from the last three years of working through the pandemic to take on these additional shifts so health systems can service the volume. So a lot of the sign-on bonuses have gone away with the market adjustments kicking in. But again, it's leaving the health organizations with these higher structural labor costs at least over the near term. So the question is how are you going to offset those costs going forward? But I think the costs are stabilizing, I won't say they're stable, but certainly in a better position now than we were a couple months ago.
Rich Saskal (
And I think your recent report mentioned that Moody's put out mentioned that primary care hospitals were stabilizing faster than say skilled nursing facilities. Do you not have to worry about that as a primary care hospital or is that actually still a problem for you guys? Maybe you want?
Brian Church (
Yeah, no, I mean I think what we're seeing is that crisis period is over for sure. I mean thankfully Covid has not had a resurgence and hopefully it won't. So we're seeing the labor landscape kind of settle. I don't know that it's going to ever return back to the way it was. I think there's a lot of emotional toll that was put on a lot of clinicians. There's a lot right now about mental health and a lot of our healthcare workers, frontline workers are just not as comfortable or strong as they were prior to the pandemic. I do think what we're going to have to focus on is really how do we develop those pipelines and get younger folks engaged in the nursing workforce? And I think that's the new normal. And I think to Matt's point mean it's either you take it control of it or the market's going to kind of guide the price that you have to pay. And I think that's really the next chapter of healthcare is how are you forming those pipelines.
Rich Saskal (
And can you talk a little bit more about what you're doing and specifically at your system? Sure.
Brian Church (
Sure absolutely. We're doing three major things. The first thing is really our partnership with college and universities. So healthcare moves slow, college and universities move slow. So together it's trying to get together and actually kind of move like a turtle would move. But we're doing our best to speed that up. And the main way to help colleges and universities is to help them either start programs or grow programs is to help them financially. So either adding faculty or adding stipends, helping with retention of students. One of the scary things is about educating nurses is only about 60% of 'em make it all the way through. So from the time they start a nursing program to the time they're board certified, only about six out of 10 actually graduate and become a nurse. So it's very difficult and it takes a lot of bodies to be able to get nurses to graduate. So we're working with our universities and colleges to expand programs. We're helping with that retention. One unique project that we've taken on, we felt, we sat with our board, our health system board about a year and a half ago. We ran the numbers for each one of our colleges and universities around us, how many nurses that they put out every year, how many nurses we hire. And we realized the math just didn't work. I mean, over the next five years, they were not going to graduate enough nurses to make up for the ones that were retiring plus the shortage that we already had due to covid. So what we did is we went to our local technical college. They had about 20 kids in their RN program, ASN program, and we said to them, we said, we want to grow it to 200 over the next year and a half. What do you need from us to make that happen? And they said, well, we need everything. We need faculty, we need space, we need programming, we need simulations, we need rounding on your floors, we need the whole gamut. We said, well, we're going to do it because that's our commitment. So we're spending 45 million on a living and learning center on our campus. The first floor will be 47,000 square feet of new academic space. We're basically taking this health science program. It's for a lot of you that have monitored healthcare for a long time, it's almost like going back to the eighties when hospitals had their own nursing programs in their hospitals. That's in essence what we're doing. Everything that's old is new again, and we're bringing that program to our campus so that we can control it, we can manage it, we can hopefully make it sticky for those students so that they stay with us and we can help get them through these programs. We'll have the RN, LP & CNA and phlebotomy program on our campus. So we'll have direct oversight and hopefully control of those students' future. The other thing we're doing, and that's just one part of the pipeline, that's a great strategy, but we said if we can't get young kids excited about healthcare, after all, the mental damage that has been done to the public with COVID over the last few years mean who wants to be a nurse after what they've seen the last three years with covid, we realized early on we're going to have to get into the middle schools and the high schools and we're going to have to tell our story in a positive way so they understand the benefit of being in healthcare. So we're doing a health science pathway. This is pretty unique to Georgia. It's being modeled now all over Georgia, but where we go into and engage ninth graders in a health science pathway. We have what's called Career college academies in Georgia where certain specific high schools are identified for pathways in certain high need fill positions. And we've created this health science pathway in Albany. So the ninth graders are dually enrolled. They have direct interaction with our nurses and our faculty. The cool thing is by the time they get to their junior and year, we're also offering paid internships and these folks are dual enrolled. So by the time they graduate, they'll be a CNA, they'll be a certified nursing assistant. So they can make $15 an hour if they want while they're in college or they can just become a CNA and do that. We've got shortages there. But what's really cool about this is if you think about specifically the area that we're in, it's one of the third or fourth poorest congressional districts in the country. These folks are getting given a huge opportunity. So they're graduating high school with 30 credits in college. They have a job that pays them at least 15 to $17 an hour out of high school. So they're 18 years old and they're able to get a head start on being a nurse if they want to go to nursing school or some other health science pathway. So we're about two and a half years into this, but we're seeing a lot of success with it. The state's trying to duplicate it all over. Our board believes that if we're going to control labor and be able to go to mat year after year and have positive ratings reports, we're going to have to show him that we have a sustainable pipeline that we've developed ourselves and we're not waiting for the university system to fix the problem for us. And I think that's rich what most health systems, and specifically from a Bond Buyer perspective, I think you should be looking for. Do those health systems have a designed pipe pipeline that they're addressing their own problem or are they hoping someone else is going to solve it for them?
Rich Saskal (
Kevin, some of your insured borrowers may have hit their own rough patches during the last three years. Can you talk about what you're seeing from them or what you're hearing from them?
Kevin Conolly (
Sure. We're hearing a lot, in normal times you usually reach out maybe once a year to check in, make sure everything's going all right. The last three years, it's become more of a quarterly call for a variety of reasons. As you've heard here today, I have to say most systems are very transparent. They are ahead of the curve in terms of they know they're going to be having some potential covenant violation, good news, bad news. The last several years we've seen a lot of more covenant light packages coming to market that's been more accepted by the investor base. So when I say covenant light, you're seeing certain rate covenants that are lower than normal certain days, cash on hand covenants that are lower than normal. So it's really taking this pandemic event to see the magnitude of some of these losses where they're tripping certain covenants. With that being said, we're not seeing any events of default yet within our portfolio, but you are seeing the consultant call and being triggered and health systems and hospitals that we have been working with have been very proactive in hiring these consultants a lot before the actual violation happens. And they're willing to work with these consultants, which is good news, and they realize that they need to make some certain changes and sometimes the changes could be a reduction in workforce and these decisions are tough ones.
Rich Saskal (
Matthew, can you talk about which, are there certain characteristics of systems that are better able to withstand the storm of the last few years and others that are in a tougher position perhaps?
Mathew Cahill (
Yeah, absolutely. So one, liquidity has been a key in funding some of the travel nursing or salary increases. So health systems that had maybe superfluous balance sheets in their rating category have had a better cushion. We've seen a lot of success in growth markets. So Texas in particular, we hear about it, we've heard about it this whole weekend or week I should say. But high growth state, there's a lot of volumes to be captured. The state also put in a new supplemental funding program. It's a Medicaid directed payment program called chirp. And what that does is it makes up some of the shortfall in Medicaid rates versus Medicare commercial rates. So that's been very instrumental in bolstering financial performance. And we've seen a couple of states implement these new Medicaid directed payment programs. So that's been helpful to weather the storm here. Florida, another growth state has done generally pretty well in terms of capturing volumes and weathering the storm. But just because you have growth does not mean you will be able to just capture volumes and be fine. So if you look at the Pacific Northwest for example, that's probably the region that's struggling the most in the last year and a half. And part of that is because the labor market was already a bit tighter going into the pandemic. So the escalation of the labor cost has been a little bit worse in that region. And the other part is interesting, I was talking to one of our colleagues who lives there, and unlike Texas, Florida, the Pacific Northwest seems to be a bit more conservative in terms of opening up. So I'll give you an example. He said his daughter was in school, had a close contact with somebody who had covid, she still had a quarantine for 10 days, and that was a couple of months ago. So you know, see different operating performance on what's normal right now. And again, just because there's growth in a region doesn't mean it's going to fare better per se. But yeah, by and large, the balance sheet's been the key to holding steady.
Kevin Conolly (
I could add the larger health systems that have a sizable nursing staff have adapted with the times that they're in and have pushed back on hiring traveling nurses because they have their own army of nurses themselves and have almost created their own traveling nurse staff within their hospital. Now obviously single site hospitals can't do that, but the larger ones who have a significant amount of nurses on staff who are actually willing to go to multiple sites, we're not saying this every day, but week by week have been able to not spend as much on their traveling nursing that has affected a lot of the systems across the country.
Rich Saskal (
And Brian alluded to unpleasant surprise from the one of his federal payers, but can you talk in generally about what you're seeing in terms of on the revenue side, what you're seeing in terms of negotiations with payers, insurers?
Brian Church (
Yeah, I mean, so Covid was really bad for hospitals and health systems. It was really, really good for managed care. They had low utilization. United Anthem to the biggest, had some of the biggest profit margins they've ever had in the history of their organizations that they're coming off some of the best years that you could ever imagine for managed care. I would say that they haven't stopped in terms of trying to implement denials and pre offs and all types of things to prevent them from having to pay payers. There's a lot of interest right now on Medicare Advantage. The reason there's a lot of interest in Medicare Advantage is because there's so much money to be made from the government with utilization management, quality bonuses. Recently Humana came out and said that they're going to give up on commercial business, they're only going to focus on Medicare advantage. That in of itself should be a red flag that, wait a minute, why are they making so much money off Medicare? So I think the payers are going to continue the pressure that's been around for 10, 15, 20 years to try to not pay providers what providers are due. And providers will of course have to fight back and you'll see that play out I'm sure in the newspaper of cost of healthcare. And I always tell people as a CFO, I'd love for healthcare to be paid for differently. I'd love for it to be like the fire department where everyone pays for it as the year goes on and hopefully you never need it, but when you need it, it's there. But if you think about it, healthcare the other way around, I mean you don't want to pay for it, but when you need it, you absolutely have to pay it. And then when you get the bill, you're like, oh my god. Well it's because services have been available for 24X7 for you this whole time. And when you need it is when you pay for it, not when you don't need it. So it's a challenge I think, and it's going to see that challenge play out between payers and providers. I mean the cost is untenable for everyone. The alternative of going somewhere else for healthcare is not good either. I mean, we have some of the best healthcare in the world, some of the best outcomes and I certainly don't want to go move somewhere else. So I think we have to figure that out with payers.
Rich Saskal (
I'll move down the table to ask the same question about payers and insurers.
Kevin Conolly (
Sure. It's an interesting question and I think a lot of the single sites have almost had been at a severe disadvantage because they don't have the leverage that the systems do into when they negotiate with the payers and the payers know this and take advantage of it. And quite frankly, I think this is one reason why you've seen so much consolidation throughout the industry is these single site hospitals need more leverage and more say at the table when they're dealing with the managed care payers because they don't want to be squeezed anymore than they already are. And when you join a system, you obviously get a little more leverage and can negotiate a little harder at the table when you're having these conversations.
Rich Saskal (
Matthew?
Mathew Cahill (
Yeah, I would reiterate the same comments as Brian and Kevin. The only thing to add is I will say as payers are still playing hardball, we've seen a little bit of give. So typically we would see a reimbursement increase for two to 4%. Now we're seeing maybe mid single digits. So at the end of the day, the health systems are getting a little bit more from the payers, but certainly not keeping up with inflation.
Rich Saskal (
All right. Before I go on to my next question, I just wanted to give people the opportunity to ask one themselves, we have a few more minutes to go before the cocktail hour opens and you guys can think about it. I'll ask about technology. The pandemic kind of forced a sudden burst of evolution and adaptation through things like remote appointments, so on and so forth. Is that evolution continuing wants to take that first.
Mathew Cahill (
Is there said the technology, sorry, can you repeat that?
Rich Saskal (
Yeah. Was this burst of technology things like remote appointments for example, is this temporary or do you think it's kind of now a new part of the permanent landscape?
Mathew Cahill (
Yeah, that's a great question. Early in the pandemic, as most people here know, telehealth really took off almost overnight. So we saw the in-person appointments flip to virtual, that has since come down, but the telehealth visits that you're alluding to remain at higher than pre covid levels. So when we talk to our organizations, they tell us there's certainly a place for telehealth, how much use that gets going forward will be determined. But the patient acceptance to telehealth has really accelerated and is one of the benefits of the pandemic. Where we're seeing other opportunities with technology is virtual nursing. So with the nursing shortage, we're seeing some health systems use virtual nursing to do things such as patient intake or administrative type tasks. And what this does, it allows the nurses who are present on the floor to do more of the clinical work. So that's been a way to stretch the nursing workforce a bit more and is seemingly very well accepted in the trials we've heard about. So we'll keep an eye on that via technology. Also, Brian mentioned what's old is new again, earlier in his comments, we're seeing home health make a comeback where hospitals might have patients that are ready to be discharged, but they can't with given some of the labor shortages in the skilled nursing facilities and long-term care facilities. So home health has become an option where you remotely monitor patients at home and maybe send a physical nurse periodically to check on the patient. So depending on the outcomes in terms of quality and reimbursement with the payers, home health could be a trend that picks up to help alleviate some of the labor shortages as well. So we're certainly seeing a lot of technology, continued integration into healthcare. And I would be remiss here if I did not plug cybersecurity because cybersecurity is a huge issue for healthcare. It's constantly one of the most attacked sectors. And with this integrated networking, we've really seen a lot of cyber breaches. So that is something that our healthcare systems are looking at on a day-to-day basis. But unfortunately, you have to make substantial investments. And as we spoke about earlier in this discussion, healthcare organizations don't have as much free capital to invest. So cybersecurity is definitely something that comes hand in hand with the new technology we're seeing.
Brian Church (
Yeah, I would just add, I think we'd be remiss as a a healthcare organization if we didn't try to gain something from covid. And what we've tried to keep the mindset of is prior to Covid, I had a slide that showed the 86 different bodies that regulated healthcare and controlled everything that we do. And during covid a lot of that got kind of pushed to the side and we were rapidly improving processes and I mean you just had to do what you had to do to make supplies from nowhere, do whatever you had to do. And I think we need to make sure in the industry we keep that mentality with technology. I think healthcare is ripe for technological improvement, artificial intelligence, the current new Vogue thing is chat GPT and what can that do for healthcare with radiologists in terms of reading films or second reading or overreading? And can we augment some of even our billing processes with artificial intelligence. So filing claims and following up with patients, can we do that with artificial intelligence? So I think there's a lot of room rich in the healthcare ecosystem for technology to come in and have a very positive impact on cost quality and reduction of just administrative burden.
Kevin Conolly (
Just to piggyback off of Brian's comments, the healthcare industry in general is pretty resilient and Covid sort of made the industry change a little faster than normal, but AI can have a tremendous impact on healthcare going forward. And from the variety of hospital tours that I've been on in the last couple years, you now see Amazon Alexas in patient rooms that are replacing a nurse coming in to answer just general questions or monitoring certain machines that usually a nurse would monitor are now being monitored by computers. They're just going to continue to improve. And obviously you can never replace a doctor or a nurse and the care that they provide, but you can minimize the amount of paperwork time or just downtime for answering not very specific questions. And when you minimize that, you have more time with the patient and actually care for the patient instead of doing more the clerical work. So I think between say what you want about chat GPT and AI, I think there are some really good positive things that will come in the near future months, to be honest with you, that we're seeing firsthand, at least I am from the hospitals that I'm seeing. Right. And from a nursing perspective, you now actually see, it's almost like a ground control war room that allocates nurses based on whatever computer algorithms are sending to the nursing stations and then they can disperse nurses. So it's not having the old school nurses walking down each floor of the hospital. So it's not all doom and gloom out. There is some pretty cool stuff that the majority of these systems are working on and adapting to the new technology that is out there.
Rich Saskal (
All right, well I guess that brings us all the way around from challenges to opportunities. And I think I may have brought us in about a minute early, but I think cocktail hour does await you guys and I thank the panelists for coming to join us today.