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Path to economic recovery goes right through U.S. hospital system: expert

Meghan Fitzgerald — author of the book “Ascending Davos” and healthcare policy professor at Columbia University — joins Yahoo Finance Live to discuss to logistics behind the roll-out of the COVID-19 vaccine, investing in this environment, and the financial impact on medical institutions in a post-COVID world.

Video Transcript

- Let's talk to someone who is paying very close attention to all of this. That is Meghan Fitzgerald. She's a private equity investor, she's author of "Ascending Davos," and a health care policy professor at Columbia University. Also a former nurse herself. Meghan, it's always great to see you. So as we're talking about sort of everything that could potentially go wrong with the vaccine rollout, how likely is it or what do you think is likeliest could go wrong with the process?

MEGHAN FITZGERALD: Yeah, well, listen, today is historic. We haven't seen a rollout like this since polio. And I think the optimism is really for next year, because I think what can go wrong is what's happening right now, and that is the near term-- that we're at 2,000 deaths a day. We could have 500,000 deaths by March.

And I think the hurt that is on the health care system right now, the very system you need to see these patients administer vaccines is at a breaking point. 200 ICUs have just hit capacity, and now you see places like California shutting down, where small businesses are really cratering. And remember-- California's 15% of GDP. So I think we have a bit of a dig out before the vaccine saves us, which is likely not well into next year.

- And I guess following up on the capacity constraints right now in the health care system, we all remember the excitement-- I guess, terror, drama-- of when the-- I forget-- the USS Comfort pulled into New York-- I think that was the one that came this way. And as we're setting up field hospitals-- there was one right outside my door here in Central Park-- and it seemed like, OK, it's all hands on deck.

But I think if you go nationally now, the situation might be more severe, and yet there's no ability for regional sharing, right? Doctors in New York are needed in New York. They can't go to California or Texas. Is that an additional stress that maybe isn't being thought about enough right now?

MEGHAN FITZGERALD: Yeah, absolutely. A third of Americans live in a location where ICU bed capacity is almost at the breaking point. A third. And once you hit that breaking point, to your point, we can't bring in more staff. We can make more beds, but you can't develop a respiratory therapist overnight. So that's a problem. Also, there's been areas where one nurse or doctor gets COVID, and then suddenly, we're sending everyone else home. This just happened-- 70 people were isolated because one health care worker got the virus. So the health care system is probably at its most fragile state when you need them most.

We also know that there's some side effects with the vaccine, so suddenly, being able to vaccinate your entire ER staff is probably not possible. You're probably going to have to stagger the vaccinations. Friends I know said they probably wouldn't take the vaccine until they have a day off in case they wind up getting the fever or a side effect. So I think it's go time right now over the next six weeks not to lose sight of all the tools and tactics that we have at our disposal that have nothing to do with the vaccine around isolation, wearing a mask. You don't really think about this until you ride up in an ICU and you realize they can't accept you.

- Meghan, this is-- the vaccine distribution, really, you talk to a lot of folks, and this could be a once in a decade situation. How are you investing off of this type of situation?

MEGHAN FITZGERALD: Yes, I think anyone moving a vaccine, making a vaccine, administering a vaccine is going to benefit. And as you said at the open of the segment, it's likely not until next year where you start seeing CVS, Walgreens, and others benefit. Right now, it seems to be pharma and the contract developers that are really seeing some benefit, because they're making the raw material and they're putting the vaccine together.

As that vaccine moves through the channel and hits different spots, I'd imagine those segments will start to do well, and they'll start to make money off doing this. We're talking about a billion vaccines, and very few people have the ability to make and move them.

- Meg, let's talk about the flip side of that. What is still not going to be doing well after this? And I'm thinking of the ripple effect on the hospital and medical industry. Even when the vaccine is widely deployed, what's going to be the remaining sort of financial impact on a lot of these medical institutions? And is that going to be a more years-long recovery process?

MEGHAN FITZGERALD: Yeah, I think right away, we're looking at a shortage of health care workers. We could have 100,000 primary care doctors needed by 2025. This year, we lost 1,300 health care workers to the virus. That sends a message to the system about the dangers of doing this job, and what it costs to be a health care worker, and the values put on it. So I think we're worried about a shortage.

We're also worried about rural hospitals. We lost 130 rural hospitals to bankruptcy in the last decade. We lost 15 in 2020 alone. So I think the frontline defense to this pandemic-- that the path to economic recovery goes right through the US hospital system. And I think we need to worry about ensuring that they stay in place, they stay healthy, they stay viable in the areas where they're most needed. If you live in a rural area, the hospital is often all you have in terms of where you get your health care.

- Yeah, that's a great point. Meghan Fitzgerald, it is always great to get your perspective. Health care policy professor at Columbia University and author of "Ascending Davos." Thanks, Meg.