Skip to main content
BMO Harris Bank Close Icon

Select Region / Language

  • US
    • English
  • Canada
    • English
    • Français
BMO Harris Bank
Commercial Close icon
search icon

Insights

No match found

Industries

No match found

Solutions

No match found

Experts

No match found

Get On Our Email List


Select the business and financial topics of interest to you and sign up to stay current on the latest news
Sign Up Now >
  • Industry Expertise
  • We Can Help
Who We Are
Industry Expertise
We Can Help
Our Bankers
Contact us Get on our email list
BMO Commercial Banking

Find

Sign In
Bookmarks 0

Reading List

Email icon
COMMERCIAL
  • Online Banking for Business
  • Auto Dealer Access System
  • Equipment Finance
  • Transportation Finance MyBMOAccount
  • Transportation Finance Business Pro 2.0
  • Diners Club
  • BMO Spend Dynamics
  • Personal
  • Wealth
  • Business
  • Commercial
  • Capital Markets
US-English Contact Us Sign-in
  • Commercial

  • Online Banking for Business
  • Auto Dealer Access System
  • Equipment Finance
  • Transportation Finance MyBMOAccount
  • Transportation Finance Business Pro 2.0
  • Diners Club
  • BMO Spend Dynamics

Select Region / Language

  • US
  • English
  • Canada
  • English
  • Français

Resources

BMO Harris Bank
search icon
  • Who We Are
  • Industry Expertise
    View all of Industry Expertise
    • Agribusiness & Protein
    • Agriculture
    • Auto Dealerships
    • Commercial Real Estate
    • Correspondent Banking
    • Dental Practices
    • Educational Institutions
    • Engineering & Construction
    • Food & Beverage
    • Franchise Finance
    • Fuel Services & Convenience
    • Futures & Securities
    • Governments
    • Healthcare
    • Logistics, Rail and Shipping
    • Manufacturing
    • Metals
    • Not-for-Profit Orgs
    • Private Equity Sponsors
    • Professional Services
    • Retail & Wholesale Distribution
    • Specialty Finance
    • Trucking
    • Agribusiness & Protein
    • Agriculture
    • Auto Dealerships
    • Commercial Real Estate
    • Correspondent Banking
    • Dental Practices
    • Educational Institutions
    • Engineering & Construction
    • Food & Beverage
    • Franchise Finance
    • Fuel Services & Convenience
    • Futures & Securities
    • Governments
    • Healthcare
    • Logistics, Rail and Shipping
    • Manufacturing
    • Metals
    • Not-for-Profit Orgs
    • Private Equity Sponsors
    • Professional Services
    • Retail & Wholesale Distribution
    • Specialty Finance
    • Trucking
  • We Can Help
    View all of We Can Help
    • Addressing Covid 19
    • Asset Based Lending
    • Business Strategy
    • Corporate Advisory
    • Doing Business Internationally
    • Doing Business in Canada
    • Economic Insights
    • Employee Solutions
    • Equipment Finance
    • Finance Growth
    • Manage Cash Flow
    • Manage Risk
    • Mergers & Acquisitions
    • Minority-Owned Businesses
    • Wealth Management
    • Addressing Covid 19
    • Asset Based Lending
    • Business Strategy
    • Corporate Advisory
    • Doing Business Internationally
    • Doing Business in Canada
    • Economic Insights
    • Employee Solutions
    • Equipment Finance
    • Finance Growth
    • Manage Cash Flow
    • Manage Risk
    • Mergers & Acquisitions
    • Minority-Owned Businesses
    • Wealth Management
  • Our Bankers
  • List of bookmarks
    0
    Bookmarks

    Reading List

    Close icon
    Email icon
Navigation Skipped
Navigation Skipped
search icon

Insights

No match found

Industries

No match found

Solutions

No match found

Experts

No match found

Get On Our Email List


Select the business and financial topics of interest to you and sign up to stay current on the latest news
Sign Up Now >
BMO Commercial Banking

Healthcare Midyear Update: Permanent Changes for Providers

  • Share this page
    Share this page
    Share page link via email
    Share page link via Facebook
    Share page link via Twitter
    Share page link via Google Plus
    Share page link via Linkedin
  • bookmark

  • print

telemed appointment.
Imran Javaid | June 30, 2021 | Healthcare
telemed appointment
Imran Javaid | June 30, 2021 | Healthcare
  • Keywords:
  • midyear update

The COVID-19 pandemic put the healthcare industry front and center. Along with being on the front lines of managing the crisis itself, providers had to pivot and innovate when it came to delivering other important services, such as treatment for mental health and chronic conditions. What also became clear is that some emerging trends were suddenly thrust into high gear.

 

There was an abrupt shift, for example, from delivering non-COVID-related care in outpatient settings instead of hospitals. Simply put, people didn’t want to go to hospitals for routine care during the pandemic, opting instead to delay elective surgeries and procedures. Many people also embraced technologies that had previously struggled to gain traction, like telemedicine. The technology has been around for more than a decade, but the pandemic supercharged its momentum, resulting in a major shift in care settings from hospitals and physicians’ offices to patients’ homes.

 

There's also a broader generational shift happening. For the most part, baby boomers are the ones seeking treatment for chronic conditions. But millennials, those roughly aged 25 to 40, are not interested in the hospital being the setting for healthcare, generally speaking. That transition was already in the works, but it was similarly amplified last year as everyone else found themselves seeking alternatives to in-person care.

 

That shift has had a significant impact on physician groups. They couldn't see patients directly, and while telehealth was an option, that cut into their reimbursement income. Meanwhile, they still had to pay for personal protective equipment, or PPE, for their staffs.

 

That’s why we expect consolidation to continue as physician groups shift to multispecialty practices and incorporate additional services—including therapies and labs—to integrated vertically and increase profitability. Consolidation could also lead to more innovation as the creation of larger health systems can create the scale to spread costs across locations. The combination of telehealth and electronic health records, or EHRs, represents a shift to a more digital-focused industry. EHRs, however, historically have suffered from underinvestment. The hope is that with consolidation, we'll see greater adoption of digitized health records.

 

Potential pitfalls

Right now, the industry is still high on CARES Act payments. Across all care settings, declining profits— from cancellations of elective procedures to PPE expenses—have been masked by the stimulus money that has flowed in. Getting off the stimulus high will likely be the biggest challenge for the industry. Those funds won’t be around in a few months, and the system’s long-term structural problems—such as payment models—will be in the forefront again.

 

Another risk is the desire to reset operating models and growth strategies back to what was being done in February 2020. Doing this just delays the inevitable when the best way forward is to embrace the changes that the pandemic accelerated. Don't just focus on baby boomers, for example. Instead, start paying attention to millennials and how they're going to engage with healthcare. Something as seemingly basic as incorporating technology that simplifies appointment scheduling can have a great impact.

 

Ultimately, it means meeting patients where they want to be met, whether it’s in a physician group facility for checkups or through virtual visits. Some call it the consumerism of healthcare or a patient-centric delivery model. While individual practitioners have historically been client-focused, that hasn’t always been the case for the industry as a whole; it pivoted during the pandemic out of necessity. But that shift needs to be permanent because the demand for the patient-centric model is more than likely here to stay.

 

If you don't, younger generations will be more likely to get their healthcare from a system that’s more nimble. 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.

 

Developing a model for the future

Providers are not likely to have another year like 2020. But some organizations are using their financials from 2019 as a predictor of future performance. As a banker working across several segments within this industry, I can tell you 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. And while 2019 may seem like the most recent “normal” year to measure against, many of the changes the industry has seen over the past 15 months will be permanent shifts.

 

The trick is figuring out the ongoing model that will suggest long-term survival. The changes accelerated by the pandemic are not likely to go away, so your current state is not comparable to your previous performance. The only way to determine your financing needs for your strategic plans—whether it’s an acquisition of technology investment—is by figuring out what your new model looks like.

 

There are plenty of challenges ahead, but for the most part, we see most providers ending 2021 better than they started. As vaccinations have rolled out and society begins to open up again, patients are seeking out services that they put off during the pandemic. As long as we continue on that trajectory and avoid any major setbacks, providers should be happier at the end of the year than they were at the beginning.

Read more
Imran Javaid, BMO profile photo

Imran Javaid

Managing Director, Healthcare Finance Group

301-718-4800

301-718-4800

Sending message, please wait ...
Send a Message
Send a message to the banker
* Mandatory Fields
Your message has been sent.
The banker will be in contact with you.

Please verify that you are not a robot.

Please do not include personal or confidential information in your message
Send Message

Mr. Javaid offers nearly 25 years of investment, finance, and management experience with a variety of institutions both public and private. For the past 20 years,...(..)

View Full Profile >

Get On Our Email List


Select the business and financial topics of interest to you and sign up to stay current on the latest news
Sign Up Now >

More Insights

stock image

Resource Title

Jan 99, 2099 | Primary Category, Secondary Category
short description goes here

Find a Banker

Tell us three simple things to
customize your experience.

How we can help
How we can help
clear selection
clear selection
clear selection
How we can help
How we can help
How we can help
How we can help

Commercial

  • Personal
  • Wealth Management
  • Small Business
  • About BMO Harris

Commercial

  • Who We Are
  • Industry Expertise
    • Agribusiness & Protein
    • Agriculture
    • Auto Dealerships
    • Commercial Real Estate
    • Correspondent Banking
    • Educational Institutions
    • Engineering & Construction
    • Food & Beverage
    • Franchise Finance
    • Futures & Securities
    • Governments
    • Healthcare
    • Manufacturing
    • Metals
    • Not-for-Profit Orgs
    • Private Equity Sponsors
    • Professional Services
    • Retail & Wholesale Distribution
    • Specialty Finance
    • Trucking
    • Dental Practices
    • Fuel Services & Convenience
    • Logistics, Rail and Shipping
  • We Can Help
    • Asset Based Lending
    • Business Strategy
    • Doing Business Internationally
    • Economic Insights
    • Employee Solutions
    • Equipment Finance
    • Finance Growth
    • Manage Cash Flow
    • Manage Risk
    • Wealth Management
    • Corporate Advisory
    • Doing Business in Canada
    • Addressing Covid 19
    • Minority-Owned Businesses
    • Mergers & Acquisitions
  • Our Bankers
phone hover icon email hover icon phone hover icon email icon phone icon share icon

Contact Us

  • Find a Banker
  • Get on our email list

Follow BMO Harris

  • Careers
  • Security
  • Privacy
  • Legal
  • Sitemap
  • Accessibility
  • Modern Slavery Act Statement
  • About Us

Banking products and services are subject to bank and credit approval. BMO Harris Bank N.A. Member FDIC fdic. BMO Harris Bank®, BMO Commercial Banking, BMO Harris Equipment Finance and BMO Transportation Finance are trade names used by BMO Harris Bank N.A. BMO Sponsor Finance is a brand name used by BMO Financial Corp and its affiliates.

 

Please note important disclosures for content produced by BMO Capital Markets. BMO Capital Markets Regulatory | BMOCMC Fixed Income Commentary Disclosure  |  BMOCMC FICC Macro Strategy Commentary Disclosure  |  Research Disclosure Statements

 

The material contained in articles posted on this website is intended as a general market commentary. The opinions, estimates and projections, if any, contained in these articles are those of the authors and may differ from those of other BMO Harris Bank employees and affiliates. BMO Harris Bank endeavors to ensure that the contents have been compiled or derived from sources that it believes to be reliable and which it believes contain information and opinions which are accurate and complete. However, the authors and BMO Harris Bank take no responsibility for any errors or omissions and do not guarantee their accuracy or completeness. These articles are for informational purposes only.

 

lender

Notice to Customers

To help the government fight the funding of terrorism and money laundering activities, federal law (USA Patriot Act (Title III of Pub. L. 107 56 (signed into law October 26, 2001)) requires all financial organizations to obtain, verify and record information that identifies each person who opens an account. When you open an account, we will ask for your name, address, date of birth and other information that will allow us to identify you. We may also ask you to provide a copy of your driver's license or other identifying documents. For each business or entity that opens an account, we will ask for your name, address and other information that will allow us to identify the entity. We may also ask you to provide a copy of your certificate of incorporation (or similar document) or other identifying documents. The information you provide in this form may be used to perform a credit check and verify your identity by using internal sources and third party vendors. If the requested information is not provided within 30 calendar days, the account will be subject to closure.

 

third party Third party web sites may have privacy and security policies different from BMO Harris. Links to other web sites do not imply the endorsement or approval of such web sites. Please review the privacy and security policies of web sites reached through links from BMO Harris web sites.

 

BMO Capital Markets is a trade name used by BMO Financial Group for the wholesale banking businesses of Bank of Montreal, BMO Harris Bank N.A. (member FDIC), Bank of Montreal Europe p.l.c, and Bank of Montreal (China) Co. Ltd, the institutional broker dealer business of BMO Capital Markets Corp. (Member FINRA and SIPC) and the agency broker dealer business of Clearpool Execution Services, LLC (Member FINRA and SIPC) in the U.S., and the institutional broker dealer businesses of BMO Nesbitt Burns Inc. (Member Investment Industry Regulatory Organization of Canada and Member Canadian Investor Protection Fund) in Canada and Asia, Bank of Montreal Europe p.l.c. (authorised and regulated by the Central Bank of Ireland) in Europe and BMO Capital Markets Limited (authorised and regulated by the Financial Conduct Authority) in the UK and Australia.

 

This information is not intended to be tax or legal advice. This information cannot be used by any taxpayer for the purpose of avoiding tax penalties that may be imposed on the taxpayer. This information is being used to support the promotion or marketing of the planning strategies discussed herein. BMO Harris Bank N.A. and its affiliates do not provide legal or tax advice to clients. You should review your particular circumstances with your independent legal and tax advisors.