Recently, the Biden administration announced that the U.S. COVID-19 public health emergency will come to an end as of May 11, 2023. When we heard that, we immediately started mentally cataloguing all the ways this will spill down through different industries, and how it will play into how we see healthcare shape up post-pandemic. We’re quite interested in this, as we’ve been watching how the space has evolved throughout the duration of the public health emergency.
After May 11, there will be changes… vaccines will then cost in certain circumstances, with uninsured persons loosing free vaccines access through state Medicaid programs. Test costs will change, with in-network or out-of-network making a difference. Treatments will be subject to different rules, with increased costs to the insured. While Emergency use authorizations (EUAs) shouldn’t be impacted, that’s subject to change.
The Long Pandemic
But… what about the less immediately obvious changes? The ones that will happen in healthcare long-term as a result of the pandemic in general… many expanded telehealth services are set to end, and the 20% increase in Medicare reimbursements hospitals got will be no more. That means we have to contemplate what care will look like moving forward, seeing as how this virus is now with us in some manner forever.
When we stop and survey the landscape, the trends we see make us wonder if going back in time a little will be the future of healthcare… we think so. Remember when doctors made house calls? Or, at least, we’re sure you’ve seen it in movies or experienced it overseas. We think we’ll see a return to that to a degree, partially because of the pandemic, and the type of illnesses and care regimens that are becoming prevalent. And… digital care is becoming normalized.
Soon, we expect the way we receive healthcare to morph into a combination of telehealth, home clinician visits, and only rare trips to a facility for the major stuff. We’re already seeing the beginnings of this. Take, for example, the recent partnership between Ada Health (a consumer-facing digital health company) and Pfizer to create an online test-to-treatment platform for patients with COVID-19.
The platform will work by pairing patients and healthcare providers for diagnosis and treatment. With the emergency designation changes coming down the pike, this will provide telehealth to those who may have otherwise gone without care. It’s great for people too sick to leave their homes, and can help prevent further spread by sick people hiking to the doctor when a telehealth conference would have done just fine.
Deals To Watch
We are seeing innovative therapies in development. Like from Virax Biolabs Group (VRAX), a biotech that completed a $6.75 million IPO last summer, which has focused heavily on viral detection and diagnostics. While the U.K.-based company does focus on diagnostic kits for the detection of covid, it’s not their only focus. They’re working on proprietary T-Cell Test technology so clinicians can dig deep into personalized medicine.
The aim of this T-Cell Test technology is a platform capable of immunology profiling, which means assessing an individual’s immune risk profile against major global viral threats. What this technology effectively would allow clinicians to do is give each person an individualized profile on themselves that shows them their personal risk for things like Herpes, Hepatitis B, and Malaria. And we all know the old saying about an ounce of prevention…
Hospitals are facing some tough issues right now, that span from funding and supply shortages, to staffing issues. Expenses for health systems, as long as they keep along current trajectories, are set to go up by about $135 billion this year, with a little less than a third of rural hospitals at risk of going under and shutting down. You can bet these kinds of issues will further drive innovations in healthcare, as well as telehealth adoption and in-home clinician visits.
An up-and-coming operation in the home healthcare space named ShiftMed is a great example. The company recently nabbed $200 million in VC funding to help build out their vision-in-progress: an on-demand workforce marketplace in the healthcare space, in the form of an application. ShiftMed’s marketplace connects over 350,000 credentialed nurses and aides with healthcare providers looking for staff.
The New Model
It’s the perfect model for today’s world, where only getting as much as you need makes sense. The company is reporting an increase in demand over the last few years, saying they’ve experienced 8x revenue growth in that time period. Their on-demand workforce can help address changes in labor costs for healthcare staff, since clinicians and organizations have access to a regulatory-compliant W-2 solution.
They’re even claiming that, compared to travel staffing options, they reduce operating costs by 30% to 40%. If this turns out to be true over time, we can see the possibilities… 40% is no small number. If it turns out a shift to digital care and a mobile workforce really does offer the cost savings being touted as possible… we can see no reason it wouldn’t work, no reason not to shift the model. We’ll see… come back next week. We’ll have more from the world of IPOs.