#248: Jason Williams, Operational Challenges in Healthcare Around COVID-19

Jason Williams is the Co-Founder of Morgan Creek Digital. Previously, Jason was the Founder and CEO of FastMed, the second largest ambulatory care system in the United States. In this conversation, Anthony and Jason discuss all things healthcare and operations. Jason provides a walkthrough into how the healthcare system works, what their operational questions are, where they're being stressed tested currently, and how the economics of a hospital system and the healthcare services are being challenged due to COVID-19. =============================== BLOCKFI-----BlockFi allows you to keep your crypto, put it up as collateral, and receive a USD loan funded directly to your bank account. They do loans ranging from $2,000 to $10,000,000, and they're perfect for helping you reach your financial goals of all sizes. Visit BlockFi.com/Pomp to learn more about putting your crypto to work without having to sell it. UNSTOPPABLE DOMAINS-----Make your crypto currency payments simple and build censorship resistant websites. Visit unstoppabledomains.com and purchase your blockchain domains today! VERVE WINE-----Free local wine delivery in Manhattan & San Francisco. Shop by location and pick up for free, usually on the same day. Spend $150 and get free local delivery. Visit vervewine.com today!

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

  What's up everyone, this is Anthony Pompliano. Most of you know me as Pomp. You're listening to Off the Chain, simply the best podcast in crypto. Let's kick this thing off.

• 0:09Anthony Pompliano?

  Jason Williams is a co-founder and partner at Morgan Creek Digital. He previously was a founder and CEO of FastMed, the second largest ambulatory care system in the United States. In this conversation, we discuss all things healthcare and operations. Jason walks us through how the healthcare system works, what their operational questions are, where they're being stress-tested currently, and how the economics of a hospital system and healthcare services is being tested right now. I really enjoyed this conversation, and Jason did a great job articulating complex ideas in a simple-to-understand language. Before we get into the episode,

• 0:51Anthony Pompliano?

  I want to talk about our two sponsors. Today, we've got BlockFi. BlockFi is one of my favorite companies in all of crypto. I'm an investor and a user, huge fan. They've got three products. You can deposit crypto and receive a US dollar loan. You can deposit crypto and earn up to 8.6% APY on your deposit in an interest-bearing account, or you can buy and sell crypto through their cryptocurrency exchange. They'll be coming out later this year with a Bitcoin Rewards Card, which allows you to use a credit card and get paid your rewards points or cash instead in Bitcoin. Head on over to blockfi.com/pomp. Again, blockfi.com/pomp, and you can find out

• 1:33Anthony Pompliano?

  all about it, and also sign up. They've got some good treats there for you when you go to blockfi.com/pomp. Our second sponsor is Unstoppable Domains. Unstoppable Domains is exactly what it sounds like. You can go and buy a domain name today that is uncensorable. Only you can take it down. You can host everything from a blog, to a podcast, to a news site, etc. So head on over to unstoppabledomains.com and pick up your unstoppable domain today. Now lastly, I'm gonna do something special with any unused ad inventory this week. I'm gonna sponsor and provide a highlight for a local small business so that they can get a little bit extra business. Today, Verve Wine. Verve is a company that sells wine.

• 2:17Anthony Pompliano?

  It's run by a few people, one of them being my friend Dustin Wilson. Dustin is a master sommelier and one of the best minds in the world when it comes to wine. Head on over to vervewine.com and you can order today. They've got stores in New York and San Francisco and they deliver. So head on over to vervewine.com and order some wine to help you get through the quarantine today. Now let's get into this episode with Jason.

• 2:44Speaker 00

  Anthony Pompliano is a partner at Morgan Creek Digital. All opinions expressed by Pomp or his guests on this podcast are solely their opinions and do not reflect the opinions of Morgan Creek Digital or Morgan Creek Capital Management. You should not treat any opinion expressed by Pomp as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his opinion. This podcast is for informational purposes only.

• 3:11Anthony Pompliano?

  All right, guys. Bang, bang. I wanted to bring Jason Williams back. He is a good friend of mine, a partner at Morgan Creek Digital with me. We've done a bunch of stuff over the years together. But Jason also has an incredible background that we'll get to in a second, the healthcare space around operations and logistics. And so I thought that he could shine light on a lot of the issues that people are talking about around the virus. This is being recorded remotely, so there might be just a little bit of audio issues. So if that pops up throughout the recording, just stick with us and we'll do our best to kind of keep going through the conversation. But Jason, thanks so much for taking the time to come do this.

• 3:51Speaker 02

  No, it's my pleasure. It's my pleasure.

• 3:54Anthony Pompliano?

  Let's just start one with your background for those that didn't listen to the first episode.

• 4:01Speaker 02

  Yeah, so beyond my operations experience, which I'll get into, I actually was a licensed physician assistant. For you, for those who don't know what a PA is, it's a dependent practitioner that has the scope and capabilities of prescribing medication, instituting medical treatment, doing procedures, and all of those are mandated, authorized, and approved by an attending physician. So a physician assistant is a really important part of a healthcare team. They were born out of Vietnam and naval corpsmen who, once returned from the war, had no place in the healthcare system to practice.

• 4:46Speaker 02

  So actually, Duke University set up a program to take these naval corpsmen and give them a bit more polish and training, and developed physician assistants. I believe that happened in 1974. So it's a relatively new discipline or addition to the healthcare team, but a really important one. So I graduated from physician assistant school in 1998, started working in the emergency room, moonlighting, was accepted to Yale into a surgical residency program for physician assistants. Was really interested in orthopedic surgery, but participated as part of the trauma team

• 5:25Speaker 02

  at Yale in treating patients who showed up to the emergency department. But beyond that, I practiced medicine for 15 years as a physician assistant, mostly ambulatory care, primary care, urgent care, and emergency medicine. Did a little bit of orthopedic surgery too, as I built FastMed. So my statements on Twitter or the conversation we're going to have today is really steeped in my medical practice of almost two decades and building FastMed, which was the nation's second-largest urgent care and primary care practice at that time. We were doing nearly 1.5 million patient visits a year.

• 6:08Speaker 02

  And if you put that in context, a major emergency department in the United States may do 50,000 to 100,000 patient visits a year. So 1.5 million patient visits a year is pretty extraordinary for a practice. So that's really kind of my experience and perspective in healthcare.

• 6:26Anthony Pompliano?

  Got it. And you'll be a super humble, but that urgent care facility, FastMed, you had built into, what, 120 locations and about half a billion dollar exit at the end of it all?

• 6:39Speaker 02

  Yeah, that's correct. We went from, you know, me out of my dorm room at Yale to 1,400 employees, 123 locations in multiple states across the country, about 400 primary care physicians, emergency room physicians and PAs and nearly half a billion dollar exit in 2015.

• 6:59Anthony Pompliano?

  Got it. So one of the things that seems to continue to come up in the whole COVID-19 conversation is this trade-off between we can either let the economy suffer or we can let the healthcare system suffer, or kind of collapse is a word that you hear used a lot. I don't want to touch on the economic component of it for right now. I just want to focus on the healthcare side. And so maybe walk us through if you're at an urgent care facility, if you're at a hospital, if you're at a primary care facility, what are the different things that go into kind of the utilization of your services and your facilities that even in times of everything kind of going well, that somebody in a position of leadership would be thinking

• 7:43Anthony Pompliano?

  through or kind of measuring on a daily or weekly basis?

• 7:49Speaker 02

  It's a really great, great question. I saw your tweet this morning around, you know, how you fix the economies, get people back to work, which is really interesting. But this is a weird time and never before have I ever seen a situation where we had economic stress or an economic collapse with social distancing or physical distancing. It doesn't allow for us to get back to work. And so that moment

• 8:25Speaker 02

  Typically excluded healthcare. So during periods of economic distress, economic collapse, you would find healthcare utilization would increase. And if you step back and just think about that for a moment, people still get sick. Now you've got the stress of unemployment or underemployment. You still have to pay your bills. And you start to get all these social anxiety, depression, those things lowering your immunity. And healthcare utilization goes up. I'm oversimplifying it, but that's kind of how I think about it. What you have happening here, though, is so weird. And I'm at the tip of the spear.

• 9:09Speaker 02

  I own a number of healthcare buildings that rent to healthcare establishments. And I started to get the calls from those tenants saying, our healthcare census is dropping. And we're worried we're not going to be able to pay our rent. And I really took a moment to reflect upon that because I've never seen that before. And so how does that play out in healthcare? You have this happen.

• 9:39Speaker 02

  Ancillary or ambulatory care is around the periphery of a hospital. So imagine you have dentists, eye doctors, GI doctors, urologists, primary care,

• 9:52Speaker 02

  ancillary services like laboratory medicine, radiography, around the outside. Actually, utilization is going to drop. Because during this time of of physical distancing or social distancing, you've got a bottleneck in the emergency departments. And again, I'm starting to see the census rise. So you're seeing it in major metropolitan areas where the hospital emergency rooms are starting to get flooded. And they're starting to see COVID-19 show up. And then concomitant health problems also show up. And people have to remember, most ICUs are critical departments. So they have patients in them.

• 10:38Speaker 02

  Right? It's not like we had ventilators and beds just sitting there waiting for COVID-19 to hit and we could just start filling them. They're probably at 85, 90, 90% census already. Then you have this, this pandemic occur and you have utilization go up at the point of the hospital system or emergency department. So you, the, the healthcare establishment is already stressed. It breaks pretty easily. It breaks pretty easily. Can't make more doctors, can't make more physical facilities at the bottleneck. But the periphery gets really weird during this, this time where primary care offices close or limit contact. They

• 11:23Speaker 02

  cannot protect their staff. Cause they're not built for that. They're not built to provide PPE or personal protective equipment at the level they need to in these peripheral establishments. So they're just closing and those docs are going home. You're not doing elective surgeries in the hospital, which is kind of like lifeblood to the economics of the hospital. Right? So the emergency room is a feeder and let's call it 80, 20. 20% if not lower are really complicated situations that need admission, et cetera.

• 12:05Speaker 02

  80% are handled and discharged and then referred to the ambulatory or periphery system.

• 12:14Speaker 02

  That's going to kind of go away. And then the lifeblood or the kind of elective stuff's going to go away. And then you don't have the facilities, the stockpiles to actually treat the increased census and it becomes a pretty desperate situation pretty quickly, I believe, here in the United States.

• 12:36Anthony Pompliano?

  Yeah, so basically what you're talking about is you're almost separating healthcare into two buckets, right? One is the places that are going to be still turned on and the places that will be turned off due to this, kind of social distancing, etc. A lot of when we think of healthcare, we simply think of the hospital, right, or emergency care, etc. What you're describing with that periphery, all the elective stuff, the general checkups, the, you know, orthodontist, all that kind of stuff, they're basically just completely turning off and saying, we can't protect people or our staff, and therefore, we're going to shut down, just like every other non-essential businesses. And so when that

• 13:17Anthony Pompliano?

  happens, you're saying that the utilization of all that, and obviously, the revenue in those businesses goes to zero, essentially, because they just shut down like every other business in America?

• 13:28Speaker 02

  Yeah, I mean, again, I have not seen this, and again, I have 20, 20 years, 25 years experience in this space. I've never seen this before, but I do expect, I do expect that to happen, where these ancillary services shut down, like even our urgent care business, if I was still the CEO of FastMed, I would legitimately be concerned that I may need to close. Here's what would happen. If you have a COVID-19 patient show up, and I'm not even able to test, so as a healthcare provider, I'm not practicing anymore, but I would, I would run through this algorithm in my mind. So patient shows up with cough, high fever

• 14:09Speaker 02

  for a number of days, myalgias, headache, etc. I test them for influenza, which I can do at FastMed, and RSV, it comes back negative. So I assume they have COVID-19, right? They've got all these flu-like symptoms. They tested negative for, for influenza A, B, and RSV, whatever I can test for with rapid tests. Those are negative. I assume the patient has COVID-19, and now I have to isolate my staff because they have an exposure. I've just lost those healthcare providers. And I've exposed patients in the waiting room, etc., to potential COVID-19 as well. So you're, you have to practice almost social distancing

• 14:54Speaker 02

  there, and, and shut down, you'd have to shut down or limit access to, to FastMed. You'd almost have to go all telemed.

• 15:05Anthony Pompliano?

  Yeah. And so when that happens, you know, the analysis is pretty simple. If it goes to zero, those businesses, just like every other business, they get in a really bad place very quickly, right? They can't pay rent. They're obviously, the employees are either furloughed or laid off, etc. And so you're just getting a really bad economic impact in the non-essential healthcare services. But then when we switch to the essential services, so let's say the hospital, the emergency rooms, etc., they are, in some ways, supposed to be able to handle kind of an influx of patients around this. What I think in conversations with you has been really interesting is even inside the hospital, though, you can break down kind of the emergency

• 15:49Anthony Pompliano?

  room from what ends up being the higher revenue or better revenue services, like the elective surgeries, etc. So maybe talk a little bit about just the economics of a hospital in general and how they separate out kind of the emergency room economics from the remainder of the hospital services.

• 16:08Speaker 02

  Yeah, so most hospitals have a system of care that they've instituted, and that system of care isn't just at the hospital. So hospitals grow, for the most part, by opening up satellite hospitals or buying practices. So they'll go out and buy primary care offices, specialists, cardiologists, urologists, and they'll have a network to feed. The game is to have patients come through the emergency department, potentially, need procedures or tests, and then send them to the hospital systems, procedurists, testing facilities,

• 16:52Speaker 02

  and then keep that revenue inside the system, right? So you create electronic medical records that are not bidirectionally integrated as a sticky moment for healthcare, right? So you, once you get into my system, and my system communicates with my peripheral system, that's how I keep you inside my network. Does that make sense?

• 17:18Speaker 02

  Yep. But once that breaks down, right, the ancillaries are closing. The peripheral system can't can't stay open because of social distancing in this pandemic. Now, all you have is the acute, high medical complexity patients that need the most resources the hospital system can provide.

• 17:42Speaker 02

  But you're not driving revenue the way you need to with these other services, and it really puts the hospital in a very desperate position. The other thing that the hospital has an obligation to do, which it's not equipped to, is provide PPE to most, if not all, of its staff inside the hospital. I use this example.

• 18:08Speaker 02

  If you were to buy furniture, office furniture in the past, you'd go to a big box retailer like Office Max. I don't even know if Office Max is still in business. But you'd go to a big box retailer like Office Max, and you'd go in and there'd be 500 different versions of desks, et cetera, that you could buy. And you'd pick a desk, but they had no inventory, really. So they would deliver. They would deliver the desk to you, but you couldn't take it with you. And this just-in-time inventory or low inventory system, America kind of got drunk on it because we've had such robust supply chains historically. I think healthcare did the same.

• 18:51Speaker 02

  So they went to like just-in-time inventory, maybe keeping 15 to 30-day supply of things that were critical. But non-critical stuff, they would allow it to run out and just get back. I think they got caught in this situation. Most, if not all, hospitals in the United States got caught with this supply chain just-in-time delivery strategy. And they don't have the equipment that they need because they always thought they could get it. But now they're realizing they can't. And you've got all this weird stuff happening about reuse of like N95 masks and storing them in paper bags and and putting a mask on top of a mask.

• 19:33Speaker 02

  I've even heard, you know, you wear the N95 mask and put a surgical mask over the top of it. And then, you know, use goggles or visors to protect yourself. And we know through The information we got from China that they were able to really limit or shut down the the passing of COVID by using PPE correctly. And so I fear that our lack of supplies here or that supply chain breaking down will cause, you know, transmission of the disease through the most the most exposed people,

• 20:14Speaker 02

  which are our healthcare providers right now, which we can't afford to lose them.

• 20:21Anthony Pompliano?

  Yeah, so so let's go back for a second to kind of the revenue that you were talking about. One of the things that it strikes me is basically you're seeing an explosion in the hospitals of the low margin revenue, but you're seeing a complete zeroing out of the high margin revenue for the hospital, right? So it's almost like the exact opposite of what you would want as a business. You would rather see an explosion in high margin revenue and a decrease in your low margin revenue, but that's not occurring. And so does this put hospitals in an area where they need to start worrying about cash flow or their ability to actually finance operations? Or are most hospitals, you know, pretty well capitalized?

• 21:04Anthony Pompliano?

  And that's not necessarily a concern as much as just there's going to be added stress here. And so they're going to have to make smart decisions to kind of weather the storm and get through this.

• 21:15Speaker 02

  No, it's actually worse. It's worse off than what you've you've explained. Imagine these some of these medical procedures, the most critical ones are are loss leaders. So there's no revenue on them or you lose money on them because you're providing so much acute care that you're not compensated for it. Remember, some some people don't have insurance. So there's there's going to be situations where there's no payment. So you have low margin or no margin procedures that are very expensive, very capital intensive,

• 21:55Speaker 02

  time intensive, procedurally intensive that are dominating your time as as this virus starts to ramp up and we're in that ramp up cycle now.

• 22:11Speaker 02

  The stress is going to hit the hospitals in a big way. You're going to see community-based hospitals suffer the most, right? Those that are most resource-challenged. Then you'll get into the academic, multi-site hospital systems. They'll be able to survive longer, but they're going to need federal aid very, very quickly to continue to operate. And I would expect to see that happening soon.

• 22:41Anthony Pompliano?

  Really? You think that the federal government will have to step in with actual assistance to help the hospitals and other healthcare providers continue to operate?

• 22:49Speaker 02

  Oh, without a doubt. They're going to need to supply them with PPE. We're going to have to hit the federal supplies for that. The hospitals will not be able to continue to get access to the volumes of masks and gowns and Tyvek suits and ventilators. You keep hearing ventilators, but there's a lot of other medical equipment around the periphery that they're going to need access to. They just won't be able to continue to spend without reimbursement to keep up with the volume.

• 23:28Anthony Pompliano?

  Got it. And then in terms of the actual, like, operational efficiency of the hospital, right? You know, you and I have talked, I've got a brother who's doing a residency program as an orthopedic surgeon. And he's actually had his team split in half. Half of them go to work, half of them go home, and they continue to rotate on a weekly basis, basically. But they don't see each other to try to prevent if, at any point, there's an infection in the hospital, only half the staff is there. So it's almost like you're putting additional stress on top of what we've already talked about. Now, at certain times or in certain hospitals, you only have half your staff available to actually operationalize and kind of run the hospital. It strikes me as that just putting, you know,

• 24:13Anthony Pompliano?

  even more pressure on a system and a situation that's already kind of bleak at best.

• 24:20Speaker 02

  Yeah, like I had this conversation with my wife. She's an ICU nurse. And you know, your first instinct is to like rush into battle. And I love that about healthcare providers because the work that they do is so noble. But they don't think like, well, some, I'm not saying they don't, but some are not thinking strategically here. And I haven't seen a division of labor like you're describing yet. But I've had a fair number of discussions with Duke University Medical School staff and some emergency room physicians about looking at their staffing schedules and actually starting to look at risk.

• 25:05Speaker 02

  Who in their groups have concomitant health problems? Who are operating in age groups that that expose those providers to morbidity and mortality? And when you segment the patients in a hospital system or emergency department into, you know, a COVID-19 moderate or high-risk environment, and then all the rest of the patients, maybe you deploy your resources in such a way as to protect the healthcare providers from the environment that could put them at the most, most risk. I would challenge the healthcare establishment to start to think about that

• 25:48Speaker 02

  because the next thing that you're going to see is beyond the ancillary establishment closing is a lack of provider resources as they get quarantined. You're seeing emergency physicians contract COVID and having to be isolated.

• 26:08Speaker 02

  You know, it's just scary.

• 26:11Anthony Pompliano?

  Yeah. What do you think about, it looks like the DOD and a number of kind of military type leadership, they're starting to step in. They've recently, along with the governor of New York, taken the Javits Center, which is a big conference hall, basically, and they're starting to turn that into a healthcare kind of stand-up place, right, where people can go and they can provide healthcare services in a somewhat makeshift model. They're also looking at taking over hospitals, or I'm sorry, hotels and other types of facilities, just trying to expand the capacity for care. And I was listening to the, you know, the

• 26:55Anthony Pompliano?

  one general talk about, you have to think about everything from the air pressure in the room, to whether the building has central air or not, to how do you get the actual supplies in there, the staff, et cetera. Do you think that's a sustainable thing, is just to go get more capacity? Or is that something that's just going to take too long and it may not be effective?

• 27:15Speaker 02

  You know, I think it's interesting to, to run those mental models, but given, if I was in a position of deploying resources, I think MASH units and constructing hospitals that are specifically set up, mobile medical centers, you know, these type structures, deployment of like the naval medical ships to the coast, I think those are more immediate and more, that's where we should focus our resources right now. You know, going in and renovating a hotel, it sounds interesting, but I think it's just not set up to deal

• 27:58Speaker 02

  with what, what you'd need to treat these type patients. I think the resources are better allocated in setting up, you know, MASH-type, military-type hospital settings and operatories. And I just, I think that makes more sense to me, Paul.

• 28:22Anthony Pompliano?

  Got it. And so then what do you think in terms of, you know, if you're running one of these hospitals or healthcare facilities, like what are the changes that you're making on a daily basis? You described kind of how you would look at your staff and bifurcate them based on risk. Are there other things that you're doing on a day to day basis to try to either one mitigate the stress that's being put on the system or two specifically around the COVID, you know, kind of threat?

• 28:51Speaker 02

  Yeah, I mean, when you look at the way an emergency department runs, you want to start to segment it into areas that you can keep running. So, and you look at it by acuity and diagnostic complexity. So first and foremost, acuity, I would set up an emergency department to segment away all of your low risk, non respiratory type illness and move it to like an urgent care setting. So the hospital, you physically divide your emergency department up so that those patients are being triaged away from those patients who are presenting with fever and respiratory type symptoms, you know, and then focus your resources and

• 29:35Speaker 02

  your personal protective equipment there so as to eliminate transmission or slow transmission in the hospital. Then you have all of your kind of trauma, cardiac, stroke, you know, the other stuff that you have to deal with away from the kind of respiratory COVID stuff. That's how I would approach it. I would eliminate all elective surgeries, you know, again, that's just because you only have so many resources to deploy. I would try to keep my peripheral system open as best I could. So if I owned a bunch of primary care offices in my healthcare

• 30:20Speaker 02

  system, I would direct PPE there, added staff, and try to keep them open. But, you know, again, I think in the current environment where you have lots of fragmentation and private ownership, these physician groups are going to make the decision to close if they're not connected to a hospital system.

• 30:47Anthony Pompliano?

  Got it. And I think that you just hit on a little bit of it, but people forget that the healthcare system is not some robotic thing. There's humans that are making these decisions and there's humans that are administering the care. Maybe let's start with the actual healthcare workers themselves. They're human, right? They're dealing with the same challenges and stress that every other Americans dealing with in terms of there's a financial crisis that's looming. They may actually be worried about certain things outside of work, etc. And then you compound that with the challenges and stresses of work. How does a healthcare system think about kind of the psychological aspect of the people who are actually administering the care in times of stress like this?

• 31:33Speaker 02

  You know, they're forced to consider it, Pop. I would take it all the way back to just the basic elements of a simple primary care office. To make a simple primary care office work, you need receptionists, medical assistants, radiography, laboratory specialists, and some type of healthcare provider, whether it's a nurse practitioner, physician assistant, or a medical doctor. At any one of those points, each are facing the same stress or different stress. And let's just start with closing schools. When you close schools, these, some of these people are parents. Well, what do you do with your kids? So now

• 32:14Speaker 02

  you're gonna either put them in daycare, or you have to stay home with them. So you're out of work just because someone's got to take care of the kids when they're being homeschooled. You know, beyond that, the resources for most of these businesses aren't that robust. So, you know, given what I expect to have happen, a decrease in utilization around the periphery because of social distancing and physical distancing and fear, they're going to be forced to close. And so it adds to unemployment, the stress that we're feeling economically, and then focuses all of that, the utilization that is there in healthcare, back to the hospital system.

• 33:01Anthony Pompliano?

  Yeah, and I guess that carries up to the decision makers themselves, right? How much of this is what I'll call kind of government type healthcare systems? So there's more institutionalization versus private healthcare systems where it's literally, hey, we've got a CEO or a leadership team and they're private individuals or employees that are making these decisions?

• 33:28Speaker 02

  Yeah, so if you if you go from the federal level, you have federal mandates coming through, but the states run their healthcare, their healthcare for the most part, right? Each state has a medical board, that medical board provides guidance and operating standards and practice standards for the for the for the providers in that state. Hospital hospital systems for the most part have business leaders that are making the decisions and it's tricky, you know?

• 34:04Speaker 02

  I think that they're put in a position now where you have to think about a crisis and doing whatever it takes to to shore up the gaps and that's at the expense of profitability until you can't do that anymore, then you shut down. I would expect that most legitimate hospital CEOs are making those decisions. At the same time, they're turning to the Fed and the state and saying, we need disaster relief. We can't continue to go all out in the support of our communities without revenue.

• 34:48Speaker 02

  I think that's where they are. The peripheral system breaks down quicker, the hospital system happens more slowly, the academic institutions that have more revenue streams even slower, but I think they're all put under the same stress.

• 35:07Anthony Pompliano?

  Yeah, and then I guess the last part is there's a lot of people who are making decisions right now at work in a professional capacity, but then also personally, there this kind of looming financial crisis, they're worried about that as well. If you go all the way to kind of the services industries like restaurants, hotels, etc., you're seeing people being laid off, losing their jobs, having to worry about kind of making rent or their next paycheck. Most people would assume that the healthcare industry, at least at the higher levels of leadership and people who work at a hospital, etc., are somewhat immune to those concerns around job security. But is one, is that true? And

• 35:48Anthony Pompliano?

  then two, do they also worry about kind of the financial crisis? And given that most of these are high earning type roles, is it actually something where they may be at bigger risk because they actually have more investments on the table and they're worried about kind of what's happening on the personal portfolio side as well?

• 36:08Speaker 02

  No, it's funny. That's a really great question. And, and I learned this lesson when I was 25 years old. I was working with an orthopedic surgeon in Fayetteville, North Carolina, and he talked to me about debt to income ratios. And he said, Jason, most physicians live well beyond their means, and they're just a paycheck away from losing everything. And I was shocked by that because, you know, your assumption is these are highly compensated individuals, highly intelligent individuals, and they're certainly planning and saving for the future. That just wasn't the case for the most part. So I would say to you that historically, during times of economic pressure like this, the healthcare

• 36:53Speaker 02

  providers always had a job, always had stability. They weren't concerned about this because, you know, their businesses would be solid. But as I spend a little time thinking about this now, A lot of the specialists, these highly compensated individuals who are now not seeing patients, whether they chose to or the patients chose not to come in because nobody's doing elective procedures, there's unemployment's going up, etc. I think they're worried. You know, if I was a dermatologist right now, I'd be worried. If I was a plastic surgeon right now, I'd be super worried. And if you think that a plastic surgeon isn't sitting

• 37:34Speaker 02

  on debt, I'd challenge that. You know, if I was a dermatologist in a single practice right now that isn't seeing patients, doesn't know when they're going to see patients again, isn't getting fed through the traditional system of primary care, etc., I'd be concerned about like, what does my future look like? How do I pay my debt? Emergency room physicians, if I was an emergency room physician right now, the thing I'd be most concerned about is contracting COVID and not being able to work. They're certainly going to work and

• 38:13Speaker 02

  have plenty of opportunity. But, you know, again, most healthcare providers are selfless and are doing this important work because they just love humanity and people and they felt called to do this. But I'm sure they're concerned about getting sick themselves and being taken out of the game. But I think for the first time, healthcare providers are probably feeling the economic stress of this as well, beyond just their investment portfolio. I'm talking about their jobs being threatened and their livelihood being threatened.

• 38:55Anthony Pompliano?

  Yeah. Going on that, how do you think this changes the healthcare industry moving forward? Right? So is there consolidation among a lot of individual practitioners? Do you see these hospital systems expanding or contracting? Like, what happens from a business perspective or a mechanism perspective in these various healthcare service providers?

• 39:17Speaker 02

  Yeah, it's another great question. So I would expect that coming out of this, those that survive or are on margin or have paused their businesses, some throw their hands up and are fed up and want to sell. So a natural buyer of peripheral or ancillary businesses is going to be a healthcare establishment or private equity that could see these as distressed assets and try to roll them up. So on the periphery, you'll see that happen. From a hospital perspective, those that survive, those that are robust, they'll pick off the community hospitals that are under stress. And this is another situation that they may throw their hands up. And that's not a new phenomenon. I would say over the last 10

• 39:56Speaker 02

  years, community-based hospitals have been under stress of closure. So hospitals will try to pick them off and consolidate them into larger systems. But I think you're going to see a period of consolidation. You'll see distressed assets being picked up. You'll see an opportunity for venture capital to come in and roll businesses up and expand them. And then you'll see some innovation. So you'll see telemedicine be adopted more dramatically. To tell you the truth, if you took me back to 2015, I would have told you

• 40:36Speaker 02

  that telemedicine would have been much more ingrained in totality in the hospital system than it is today. I still think it's kind of like a boutique thing. It's not robust and disseminated. So I see telemedicine really growing out of this event. I think at-home testing is another thing that you're going to see really come out of this event. We've shown a complete breakdown of the supply chain and logistics around just getting tests for COVID-19.

• 41:15Speaker 02

  You'll see a number of of of events around critical equipment like masks and ventilators that were outsourced even to foreign countries be domesticated. I think the days of us waiting for another country to supply us with masks, like these critical things are over. This stuff's gonna be built here in the United States so that when we need it, it's here and we don't see supply chains break down.

• 41:50Anthony Pompliano?

  Yeah, one of the things that you'd mentioned to me a couple of days ago, I found really fascinating, was in times of distress or emergency, all of a sudden, a lot of the red tape and bureaucracy of healthcare gets kind of pulled away. And so we've seen a couple of announcements. Some are, you know, pretty straightforward for people who have no healthcare experience. So something like a doctor, a certain type of doctor is only allowed to participate in the state in which they practice. They can't practice across state lines. We saw an announcement earlier this week, or actually last week, that said, hey, that restriction will be removed during this time of emergency. Do you see kind of big regulatory changes coming

• 42:32Anthony Pompliano?

  out of this? Or is it something where it's more emergency measures and then we'll go back to the old regime on the regulation side?

• 42:41Speaker 02

  Yeah, I actually think, again, these are, these are periods of rapid innovation and those innovations typically stick. So you've seen a dramatic, one of the dramatic changes was around HIPAA. HIPAA is, is a rule around patient privacy and it extends pretty far. It's important, right? We don't want our protected healthcare information shared in a way that, that causes us economic stress around our employer finding out something that they shouldn't, or that information being shared in a way we didn't, we didn't want it to. So these rules are in place to protect patient information and protect us.

• 43:24Speaker 02

  But they're, they were pretty far reaching. So HIPAA, for example, and high tech. Those rules didn't allow me as a healthcare provider to text you or to phone you without you opting into that. And the only way I could communicate with you from a treatment perspective was through very complex patient portals that were password protected. Even telemedicine, you couldn't use traditional means of video conferencing like we're using right now. If you're using Zoom or Skype or FaceTime, those weren't HIPAA and high-tech approved means for patient treatment. So it really made telemedicine wonky

• 44:09Speaker 02

  and just our ability to communicate ineffective. Well, recently, just a week or two ago, and I really applaud the Fed for doing this. They relaxed HIPAA and high-tech standards to allow for Skype and FaceTime and patients to communicate with their providers with cell phones and text messaging and email. And all of that is good because it allows for us to segment those patients that don't need to come in contact with the healthcare establishment right now for routine maintenance care, refills of medication, just having questions. Those could be answered and taken care of through telemedicine and teleconferencing.

• 44:54Speaker 02

  If you go to my LinkedIn, I wrote about, you know, telemedicine has existed as long as there were telephones. Really, right? That was the first invention of telemedicine. But it's been just kind of slowed down and made ineffective through these laws. But really exciting times for patient care in regards to the relaxing of HIPAA and high-tech. And as you stated, there's the relaxation of medical licensure across state lines. There's just a lot of different things that are happening right now to help expedite care. And I applaud the Feds for coming up with those changes.

• 45:39Speaker 02

  I hope that we learn, we're able to test, you know, see what kind of, you know, healthcare information fell through the cracks, if there were actually issues, and maybe come out of it with a better plan.

• 45:52Anthony Pompliano?

  Yeah. Last question for you before I let you get back to some real work is there's a lot of talk right now about potential cures or things that can kind of mitigate symptoms. And so obviously the famous ones now that Trump tweeted is the hydroxychloroquine, or I think it's zipfrice misen or something. These are things that have shown in very small sample sizes, some level of impact, but obviously have not gone through the rigorous testing that either the FDA or other regulatory bodies would normally require. How does that testing environment change in a time of emergency? Meaning that, you know, whether it's these

• 46:36Anthony Pompliano?

  drugs, other drugs, there's obviously a sense of urgency here. But in some cases, it seems like it will still be months, if not, you know, a year plus. What's kind of your thoughts around that testing environment and what we need to still make sure things are safe, but also kind of expedite getting solutions for for something that's obviously kind of paralyzed the the economy?

• 47:01Speaker 02

  Yeah, I think you have to look at a comprehensive strategy that the government's rolling out right now. And they're they're looking at what was done in in Hong Kong and in China and in other countries to try to slow the progression of COVID-19 while they came up with a plan. And I think the United States has gone to that rule, that playbook, right? So they've said, we're going to do social distancing, physical distancing, we're going to shelter in place, some segments of the population. And that's going to give us time to take our pulse. We know that a vaccine is 12 to 18 months out. So that's

• 47:43Speaker 02

  that's something we're working on now, but it's not going to be readily deployable. And then they have to look at treatments that have been used. So you mentioned hydroxychloroquine, which is like a anti malaria drug. It's been used in Africa. I'm not sure it's used much anymore, but it's from the 1940s. And in combination with azithromycin or zithromax, you may know that as a Z-Pak. That's been shown to be effective. Now, those drugs exist, they're used for different purposes. And what the FDA has to do is add a use case. So that's what Trump, I think, has been trying to say.

• 48:28Speaker 02

  The FDA is rapidly working to add, you know, a use for hydroxychloroquine and azithromycin, potentially. These drugs, although used for a long time for different, for different reasons, they don't come without risks. Both of those drugs cause prolonged QT intervals. So it's a cardiac dysrhythmia that could be expressed with those drugs. So there are side effects. There's been limited experience and deployment of that treatment.

• 49:06Speaker 02

  But I think over the next 15 to 30 days of us slowing down, people, we're hoping to come out of that with a treatment plan, more robust PPE, potential, you know, vaccine for the future. Because my fear is actually the fall of this year. You're getting right back into a flu season and we could have a resurgence or another spike of COVID-19. And without a plan, I think that's the scariest thing for me. I think the American people just want a plan. With a plan, then we can sort of get back to normal.

• 49:50Speaker 02

  You'll see maybe the markets respond to a plan. And, you know, the treatment is really for, you know, the moderate to severe cases, Pomp. It's not for the people who have flu-like symptoms but are tolerating it. Really, that's just, you know, go home and supportive care. But it's those that are needing respiratory support, oxygen, potential admission, and those that are at high risk, right? I mean, you're looking at...

• 50:22Speaker 02

  The mortality and morbidity goes up pretty high, actually, or starts to go up for those 40 or older. Then you have the 65 or older. I was reading you've got morbidity and mortality at 1.8 to 3% in that older population. You almost have nobody under 19 dying of COVID-19. You know, and the United States is, I think, third on the list right now of cases of COVID-19, behind China and Italy, and Italy is number one in terms of fatality associated with COVID-19.

• 51:01Speaker 02

  So I expect the United States to rapidly move up the list in regards to cases and fatality associated with this, unfortunately. It's just because just massive country and we're stressing our healthcare out to the max right now.

• 51:21Anthony Pompliano?

  Yeah, it's this weird combination of a health crisis, a financial crisis, demographics working against many countries, right, just older populations, et cetera. So it's, you know, it is a point in history that will be dissected, I think, for decades to come, unfortunately. So we'll see how it plays out.

• 51:44Speaker 02

  Yeah, I really appreciated one of your tweets. I think you, or you continue to say, stay safe. And I appreciate that, you know, I think positive messages and support for a lot of people who are sitting at home. They're scared. And again, for me, whenever I'm concerned or I'm not sure of things, organizing and planning kind of helps me feel better about kind of where I am. And again, I'm just waiting for a real plan to come from the Fed. And I know that'll help me out a whole bunch.

• 52:27Anthony Pompliano?

  For sure. Well, we will, we'll put your Twitter account in the comments section so that people can go follow you on there. Got to get you, you're so close to 30,000. We're going to get you there.

• 52:40Speaker 02

  I get it. Yeah, man. It's a, it's a, anyway, I'm, I'm one tenth of the, of your, of your group of followers on Twitter, but I certainly appreciate the time today. And, and this is, this is something I spent a lot of my time on this healthcare space. So, you know, we have to succeed. We have to survive. You know, we have to take care of each other and we'll get through all this.

• 53:07Anthony Pompliano?

  Absolutely. Joe just threw your Twitter account up on the, on the screen there and says, got your back. All right. Thanks so much for doing this and we'll have to record it again in the future.

• 53:16Speaker 02

  Sounds good, man. Talk soon.

• 53:20Anthony Pompliano?

  Hey, everyone. Pop here. If you liked this episode of Off the Chain and want to help us take crypto to the top of the apple, Spotify and other podcast charts, please do us a favor and rate, review and subscribe. To review, simply go to the Off the Chain homepage, scroll down until you see the five blank stars. Taking 15 seconds to fill those stars in and leave a quick review goes a long way in helping us take the entire crypto ecosystem to the top of the charts. I appreciate you listening and see you next time on Off the Chain.