February 18, 2021

While a few astrophysicists have calculated the near impossibility of intelligent life developing elsewhere in the galaxy, there is a growing number of scientists and astronomers who are nevertheless accelerating their search for extraterrestrials. From the efforts of SETI in the 60s to the Voyager missions that contained greetings in 59 languages, to the Mars Curiosity Rover, mankind has been looking for signs—any sign—of sentient life. While the search continues in the cosmos, there are signs of new life emanating right here on earth—in America’s hospitals.

Hope Rising

After a year of languishing in the extreme conditions caused by COVID, hospitals are showing new life and a renewed hope for a positive future. The once suppressed revenues and restrained budgets are now loosening up, and some hospitals are poised to hit the ground running—and not just for the long term. The short term is in play as well.

That is not to say that the outlook is rosy for every healthcare entity. Facilities like Mercy Hospital and Medical Center in Chicago, as a recent example, have had to file for bankruptcy in the wake of the coronavirus crisis. Indeed, according to the American Hospital Association (AHA), U.S. hospitals had an estimated loss of over $323 billion in 2020; and, even with the infusion of funds from the CARES Act, many were unable to achieve financial stability. Nevertheless, other hospitals have been able to live to fight another day. Like a platinum track from the days of disco, they’ve been “staying alive,” in spite of enormous challenges; and those who’ve been able to survive this period are already looking to transition from survive to thrive.

The Union Bank of Switzerland (UBS), a multinational investment firm, released the results of a study in February that attempts to gauge the financial position of the overall economy, including that of the United States. The overarching message for American business can be derived from the following excerpt of the study:

We think the approval and rollout of a coronavirus vaccine by the second quarter, fiscal policymaking, and US voters choosing legislative gridlock will enable corporate earnings in most regions to recover to pre-pandemic levels by the end of the year. We expect the more economically sensitive markets and sectors, many of which underperformed in 2020, to outperform in 2021.
This sounds like good news—at least from a macro-economic perspective—but is there any indication that hospitals will be a part of this sunny financial outlook? The investment firm provided insight on that question, as well, which is summarized in the following section.

Looking to Buy

The analysts at UBS released the results of a survey in February that dealt specifically with the healthcare sector, according to a report in MedTech Dive. Their findings are summarized as follows:

Diagnostic platforms, robotics and “hybrid cath labs” are expected to lead hospitals’ capital equipment investments in 2021.

Purchasing managers set an average 5 percent increase for their medical equipment budget for 2021, representing an increase from the 3.5 percent growth forecast over a year ago.

Hospitals are expected to spend more on floor monitoring equipment, with 84 percent indicating either a current or planned increased usage in monitoring technology.

The survey among purchasing managers revealed 64 percent expecting an increase in budgetary capacity in 2021, with only 18 percent anticipating a decrease.
More reason for optimism comes from Johns Hopkins University, which reported in mid-February that new COVID cases dropped below 100,000 for the first time since November. In fact, the CDC’s own website shows a precipitous dip in daily cases, which were at 250,000 as recently as January 22. One facility, St. George Regional Hospital in Utah, is indicative of this change in fortunes. It is currently at 79 percent capacity and reports a drop in its intensive care unit capacity for the first time since October. All this suggests the possibility of a brighter near-term future for U.S. hospitals, generally, though some states will continue to lag behind others in their COVID recovery.

While many hospital executives throughout the country are a bit more sanguine about the months ahead—especially in comparison with the difficulties of the last 12 months—no one knows with certainty what the future will hold. There may be new viral variants that could lead to challenges in the weeks ahead. There may also be further assistance for hospitals in the form of new federal funding. All hospital decisionmakers can do at this point is weigh the possibilities, look at the current trends, and make judicious decisions about how to invest. Decisions made today will shape the facility’s financial health in the months ahead.

If we can be of assistance to you in the decision-making process, please reach out to us at info@miramedgs.com, or visit us at www.miramedgs.com to see our array of hospital-specific business services.