Healthcare providers must look to pandemic-related changes in making plans for future stability, according to BMO Harris Bank’s Healthcare Midyear Update.
Although last year was anything but normal, many of the changes the industry has seen over the past 15 months will be permanent shifts, according to Imran Javaid, managing director, of the BMO Harris Bank’s Healthcare Finance Group. Resetting the business model back to 2019 would be a mistake, he said in the report, because the health crisis spurred innovation.
“Essentially, it’s taking the mindset that the changes you made in the past year to adapt to the pandemic weren’t short-term fixes but an evolution of your business model,” Javaid wrote.
The bank advises that providers also look beyond the baby boomers in thinking about the future. Millennials, roughly aged 25 to 40, are the group to keep an eye on, and they’re likely to engage with healthcare a little differently than their predecessors.
“Something as seemingly basic as incorporating technology that simplifies appointment scheduling can have a great impact,” Javaid said.
The good news for providers, he wrote, is that “no financial institution is going to view your 2019 or 2020 performance as a benchmark for how your business will perform for the rest of 2021 and beyond. Last year was an anomaly.”
The biggest immediate issue facing senior housing is that prospective residents and their families may be leery of transitioning to assisted living or even independent living in the wake of the pandemic, Javaid wrote earlier this month. “Operators expect that for the next couple of years at least, residents and their families will be sensitive to fears of the virus,” he said at the time.
Some physical design changes will be necessary if long-term care is to survive. One concept to get rid of, Javaid said, is the low-cost option of having residents from two units share a common bathroom. Also, he added, facilities and communities will need to create “clean rooms” that are set aside for visits and sanitized in between.
Further, Javaid wrote, “Designs that emphasize the use of separate ‘neighborhoods,’ where residents can live, socialize and dine together in smaller groups, could become more popular. The neighborhoods could be cordoned off in the event of a future pandemic without bringing the entire community to a stop.”
For the most part, the bank expects that most providers will end 2021 better than they started.
