By Leslie Small
Besides all the other ways it’s changing American life, the COVID-19 pandemic is sure to have a major impact on how the health care industry does business going forward, equities analysts said March 31 during the 24th Wall Street Comes to Washington Health Care Roundtable.
In the short term, the all-consuming nature of the public health crisis is very likely to pause health care providers’ and payers’ work on alternative payment models, said Matthew Borsch, a managing director at BMO Capital Markets. Executive attention is needed to hammer out arrangements that base provider pay on better health care quality and lower costs, he pointed out, and “efforts are being refocused right now.”
George Hill, a managing director at Deutsche Bank, added that the pandemic will also influence rate negotiations between payers and providers.
“This crisis…is going to give the hospitals the artillery to go back and demand higher prices [and] say that they’ve been put under too much pressure for too long, that the infrastructure was not readily available when it was needed,” he said.
“You’re going to see high-acuity providers try to build a wall around the prices that they charge and the value that they think that they provide,” Hill predicted. “And as we come out of a crisis like this, it’s going to be hard for payer organizations — whether we’re talking about the government or whether we’re talking about commercial payers — to push back.”
On the plus side, changes that occur during the current crisis will probably accelerate innovation in the health care sector, said Ricky Goldwasser, a managing director at Morgan Stanley.
“We have to think about some of the news that came out of CMS, where nurse practitioners can now write prescriptions,” she said. “I think that we’re going to see a real…leap forward in some of the trends that we were looking for that otherwise would have taken five years to a decade.”