Joshua Jennings, M.D. Cowen’s Medical Supplies & Devices analyst, speaks with Omar Lateef, M.D., CEO of Rush University Medical Center. Rush University Medical Center is a leading academic medical center in Chicago, IL. Dr. Jennings and Dr. Lateef discuss the impact of COVID-19 on the medical center, changes in procedure volumes, and potential paths to recovery.
Press play below to listen to their conversation.
Joshua Jennings, M.D., Medical Supplies & Devices Analyst
Omar Lateef, M.D., CEO, Rush University Medical Center
Dr. Omar Lateef, became the CEO of Rush University Medical Center in May 2019. He was the chief medical officer of the Medical Center and of Rush University System for Health from January 2015 and June 2018, respectively, through June 2019.
As Chief Medical Officer, Lateef helped design, implement and oversee initiatives related to clinical quality, patient safety and performance improvement. Under his leadership, Rush system hospitals have performed exceptionally well in rankings by the Centers for Medicare and Medicaid Services (CMS), U.S. News & World Report, the Leapfrog Group and Vizient, which in 2019 ranked Rush University Medical Center first among 93 participating academic health systems across the nation in quality and accountability.
Lateef is a recognized leader in the measurement of health care quality, and has worked with physicians and analysts at Rush and from academic medical centers across the nation to evaluate the driving factors and methodology for quality rankings by CMS, U.S. News and others. Lateef and his colleagues have evaluated and recommended changes to the rating systems to confirm that they are accurate and a fair reflection of quality. His work to ensure that key national measures are transparent, measure what they are intended to measure and have no unintended consequences has profoundly impacted how health care quality is viewed and reported at Rush and across the country.
Lateef, who joined Rush in 2002, was appointed associate chief medical officer in 2009 and vice chair of the Department of Internal Medicine in 2012. He also served as program director for the Pulmonary and Critical Care Fellowship Program and as director of the medical intensive care unit.
A former associate dean of medical sciences at Rush University, Lateef is currently a professor of pulmonary and critical care medicine. He has won numerous teaching awards at the University and led educational programs that ranked repeatedly among the top five in the country.
In 1995, Lateef earned a bachelor’s of science in religious studies from the University of Florida – Gainesville. Four years later, he received his medical degree from Des Moines University, after which he completed his internship and residency at New York University Downtown Hospital. He completed a fellowship in pulmonary and critical care medicine at Rush in 2005.
Lateef has published extensively on scientific and ethical issues in critical care medicine and spoken internationally on improving health care and its delivery. He is a member of the American College of Chest Physicians, the American Thoracic Society, and the Society of Critical Care Medicine, and a fellow of the American College of Physicians.
Speaker 1: Welcome to Cowen Insights, a special look at the Coronavirus and its effects on sectors across the economy, as well as the policy arena. You will hear the latest insights from leading experts about where things stand and what’s around the corner.
Speaker 2: [00:00:30] Good afternoon, I’m representing Cowen’s Medical Device research team along with Brian Kennedy, Eric Anderson, Neil Chatterji. We appreciate everyone who’s dialed into this call today, which is part of the Cowen COVID-19 virtual conference series. And we’re very thankful to Dr. Omar Lateef, for taking time out of his busy schedule to help us understand some of the dynamics hospitals are facing during the COVID-19 pandemic. Dr. Lateef is the Chief Executive Officer at Rush University Medical Center, a leading Academic Center in Chicago, Illinois, Dr. Lateef, we’re truly grateful [00:01:00] to have you here today. So maybe just a quick focus of the call, the medical devices industry is facing a massive headwind from COVID-19 related policy decisions, to postpone elective procedures.
And we’re going to focus the majority of our discussion on the recent trends and what needs to happen for elective procedures to open back up. So Dr. Lateef, maybe to start, it’s helpful to just hear about Rush University Medical Center. And any, I guess trends you’re seeing here with just COVID-19 admissions, [00:01:30] maybe some high level description of Rush University Medical Center, number of beds, number of ICU beds, or anything that you think would be helpful to start this call.
Dr. Omar Lateef: Sure. I’ll talk broadly for a second about COVID-19 in Chicago, and then I think it’d be better to talk about it in Chicago, New York, Seattle, and then what will happen in the rest of the country to really paint an accurate picture. Chicago started a stay-in shelter, we had the benefit of learning from three cities that had more data than any city in China. That [00:02:00] was Milan, Italy, Seattle, Washington and New York City. And so given that we watch the trends and the dynamics of what happened in those cities, and the numbers of patients overwhelm the healthcare system, each new city was able to call those hospitals and say, “What would you do differently?” And that’s an example one of the things that we had done. And so, four weeks ago, we started to worry when we had just a handful of cases in Illinois, about what would happen to not only our hospital, but our [00:02:30] community, our city and our state.
Rush has 780 beds. And we have just over 120 ICU beds. We were hearing stories of hospitals with 900 beds treating 1600 patients in New York and the Bronx, this was a particularly scary thing. There’s three limitations that are created in the healthcare structure with COVID. They relate to bed, supplies, and staff. And if you think about things like for example, [00:03:00] elective surgery, those use supplies and staff as well as some space. And so it was a concern. So we decided very early on, we would set up a command center and look to how would we optimize our bed supplies and staff, if Chicago was to turn into New York City. We also lobbied very hard against the local and state government to implement a stay-in shelter order for the city and the state. And that was largely [00:03:30] political. But we believe very strongly that, that was a way to make a difference before the volumes became high.
So we were successful collectively, as a healthcare community of doing that. We have a governor that was extraordinarily supportive of the physicians in the state and recognize that early. And as a result of that, the doubling times in Chicago, four days in a row have decreased. Now our rate while we’re still on the increase, stops at around… It’s doubling every six days, there was one point where it’s doubling every two days. [00:04:00] So that doubling time, they give you some predictive fear over when you’ll overwhelm your health care structure. So you can’t make decisions about when life gets back to normal based on the doubling time rate, you can make decisions on the rate of lowering.
So when you stop not only increasing new infections, but the new infection starts to decrease, then you could map out a trajectory of when is it safe to reopen your bed, start using more [00:04:30] of your supplies and start enacting more of your staff, so you’re not keeping them on the bench in case they get pulled out. So a broad overview of Rush is that we are sitting where a nonprofit sitting in the west side of Chicago. We have a world renowned orthopedic surgical group that does gigantic number of elective surgeries, we’re a part owners in outpatient surgery centers and have mutual affiliations with those and the providers that work in those. [00:05:00] We’re a profitable business, we’re one of three hospitals in the country are below zero in their operating margin. We are above zero. And we were actually on budget, which is not an aggressive budget, but we were doing relatively well against that budget, which shows a modest increase. And right before COVID, we started construction on a $450 million new ambulatory building across the street. So this has been devastating to our institution and our city.
Speaker 2: I appreciate that. And I [00:05:30] appreciate that intro. If you’re looking at the curves as they stand now, do you see a point where there’s a stabilization in hospital operations at Rush University Medical Center?
Dr. Omar Lateef: Yeah.
Speaker 2: What type of timeframe are you thinking about today?
Dr. Omar Lateef: So it’s not possible or responsible, as hard as it sounds to predict. We could predict when we’ll run out of healthcare resources much easier than we could predict [00:06:00] when we get back to normal. And the reason is because we’re an outbreak away from shifting back on the curve. And so when I say we’re an outbreak, like the county jail, just had an outbreak over the last week. That outbreak is 5000 prisoners 2000 employees in a fixed space, where you cannot social distance them in any capacity. So depending on what happens with that outbreak, and the reach that outbreak has, that alone [00:06:30] could change the trajectory of the city.
So it’s much harder for me to tell you what’s going to happen in Chicago. But I can tell you based on what happened in Wuhan, that the entire restrictions got lifted in a four month period from start to finish. They are draconian and aggressive. And not like us. That was where we still have eight states that have not done anything to slow the spread. And those states will continue to spread. The other reason I can’t tell you with great… So there’s this mix [00:07:00] of politics in healthcare that’s pretty unique around COVID. Where elective surgeries were shut down politically. So I could make a decision that says, “We want to get ramped up again.” But we really need another executive order to lift that executive order in the state.
Speaker 2: Understood. Maybe we could just briefly review, the Rush University Medical Center’s current elective procedure policy, or the executive order from the state, I guess is more appropriate, after your last [00:07:30] point.
Dr. Omar Lateef: Yeah. So we stopped. At four weeks ago, we were an institution that recommended stopping elective surgery based on lessons learned in New York and in Seattle. When we asked their executives, what would they have done differently, they all said that they would have stopped elective surgery, flexed those beds in the operating room as makeshift ICU rooms, keep the mechanical ventilator equipment backup for COVID positive patients, and keep the staff [00:08:00] at home so they wouldn’t get sick in case we needed to pull them. So we stopped. So elective surgeries and the definitions, I think is what you’re really getting at, is something that none of the societies, and for intentional reasons what out of their way to clarify. So the American College of Surgery, the ACS recommended against elective surgeries four weeks ago, but they also said, they defined elective it in a very loose way. And they left it up to the physician [00:08:30] provider to say that this, so for example, if you have a breast mass, the data may say that you could wait three weeks without increasing risk. But a patient may not want to wait. So that was not an elective surgery.
So there are ways within the definition to get jump started sooner rather than later. What I can tell you that we all live in fear about, what I live in fear at Rush about is if we start elective surgery and a COVID negative patient comes in and leaves COVID positive, what happens to us. And so that’s a real fear [00:09:00] with community spread, it won’t be our fault, but we will get vilified all over the national and international media for that. So there’s a lot of reasons people are scared to jumpstart elective surgery. The other thing is our burn rate right now with cash is nothing that’s ever been seen before in healthcare in this country. What generates revenue for us, the machine that helps Rush is elective surgery. So it is hips and knees and joint replacement for our orthopedic [00:09:30] group. It is people that they need some mild base work done through EMT or plastics.
And so when those are stopped, we have just a one way outflow of money. But we’re equally scared to get it restarted without the community supporting us. Right now, it’s been a vindictive society against healthcare around, are we protecting our employees? Are we giving hazard pay? Nobody can do enough. So the minute we start elective surgery, [00:10:00] we put more people in harm’s way. So I don’t think New York and Seattle are remotely close, and we will follow after them.
Speaker 2: Gotcha. Maybe we can dig a little bit deeper there in a minute. But just wanted to maybe understand what type of procedures are still being performed. You mentioned that there is so much wiggle room in the definitions, but if you would-
Dr. Omar Lateef: Heart surgery, so here’s what I would say. So urgent [00:10:30] and emergent surgeries are being done. Urgent, if the provider feels like they can’t be put off or it’s unsafe. So that would be heart surgery, cancer surgeries. Those are the big surgeries that we’re really saying, “Look, if you’re going to die, if you’re a ticking time bomb with a heart cancer grows, nobody likes to wait,” those are the ones that will get jump started much sooner than other places. Now Rush, our volume in this 20% of all COVID positive patients in the county [00:11:00] of Cook are at Rush. And 10% of the entire state’s COVID positive patients are at Rush. So we’ll lag behind other people until we get rid of these patients.
Speaker 2: Understood. And what do you think the percentage of elective procedures at your Rush University Medical Center have been postponed or canceled? Is that a figure you can help us think about in the last four weeks?
Dr. Omar Lateef: Yeah. It’s 100%.
Speaker 2: So the urgent or the urgent slash emergency immediate procedures are not in that [00:11:30] bucket?
Dr. Omar Lateef: Correct.
Speaker 2: When you say heart surgeries, does that include transcatheter aortic valve replacement procedures? Is it include is that kind of CABG like procedures or-
Dr. Omar Lateef: So CABG is what includes, TAVR we would consider elective.
Speaker 2: Okay. Got it.
Dr. Omar Lateef: Now, that said, If a provider called and said, “I would defer to the provider.” So if a provider called our command center and said, ” [00:12:00] If I do this valve, this person will be able to breathe,” we’re not going to say no. But it’s hard to group a TAVR in that bucket.
Speaker 2: Understood. And how are those decisions made? Again, so do you have an executive team? Is it through the department chair? Or Is there a medical team that’s where these decisions are made in terms of what-
Dr. Omar Lateef: Yeah. So we’re deferring to our surgical leadership and evidence based guidelines and society guidelines. And interpretation of those guidelines goes with the department [00:12:30] chair, if there’s any concern, it’s a conversation with our leadership team and our every hospital has set up a command center. So the command center is being run by an administrator, who in consultation with a medical group will make a decision. Ultimately, the dean and the chair are going to decide. But we have so much deference to the provider, if a provider calls, if a doctor calls us and says, “I need to do this to save someone’s life.” No one’s going to say no.
Speaker 2: Understood. Gotcha. But just to be clear, if I just [00:13:00] run through a couple of procedure categories, which are mostly being shut down, unless maybe if there’s any exceptions, but total knee replacements and total hip replacements?
Dr. Omar Lateef: None. Shut down.
Speaker 2: Spine surgeries?
Dr. Omar Lateef: Shut down.
Speaker 2: I see, we talked about TAVR. Percutaneous coronary interventions?
Dr. Omar Lateef: We would do that.
Speaker 2: Would do that. Okay. If it was like a STEMI, or something along those lines?
Dr. Omar Lateef: Yeah. Of course.
Speaker 2: You guys have a transplant [00:13:30] program?
Dr. Omar Lateef: Yes, we would do those.
Speaker 2: Would do those. Okay. And then about any neuromodulation, spinal cord stimulation, all those things, I assume are being shut down.
Dr. Omar Lateef: Yeah. We would shut them down. And we would do any spinal procedure if there was an abscess or infection or acute need. But we would not do with chronic pain back surgery right now.
Speaker 2: Understood. I won’t belabor that. If we think about just how you communicate with patients, when you [00:14:00] have these procedures postponed. Have they been rescheduled in months ahead, or are they just postponed indefinitely?
Dr. Omar Lateef: Both. We don’t know when this is done. We assume the worst case scenario and over prepared in the city as much as we can. We figure history will regard over preparation as a negative thing. So it’s hard to pick a date. We have some of our providers that have gone ahead and picked [00:14:30] a date. But for the most part, we’re telling people, “We’ll call you soon as we can, stay in touch.”
Speaker 2: Got it. And there has been this intense focus in the investment committee on when and how procedures can open back up. So maybe we’ll just try and dive a little bit deeper. I know I understand, there’s a lot of unknowns, a lot of variables that are-
Dr. Omar Lateef: No, but happy to explain. Yeah. Happy to explain why that’s so hard to answer.
Speaker 2: Maybe just the first question is your hospital, is your team, your executive team or departments [00:15:00] beneath your team, are they currently formulating strategies to reopen elective procedures? Is still something that’s kind of on the docket, but not fully in place?
Dr. Omar Lateef: No, we have a group in parallel working on our post COVID world. For sure. Yeah. So I would say our executive team is talking about, when do we reopen clinic appointments? When do we reopen surgeries? And how do we communicate that?
Speaker 2: Great. And then if we think about the, what do [00:15:30] you need to see? Are there any metrics or signals that you’re looking for that will catalyze the decision to reopen lecture procedures?
Dr. Omar Lateef: We need two things to happen, actually, a handful of things to happen. One is we need politicians to lift the executive orders. The second thing we would need are statement consensus statements. Now, these aren’t absolutes, but these are the things that will certainly help. We need [00:16:00] the organizations that issued consensus statements like the American College of Surgery to stop doing elective surgeries to remove that. Almost like right in all clear, so we get the medical societies on our sides, so we get the politicians on our sides. And then we need to ensure we have an ample amount of supplies, beds and staff. And so we’ll know that last category supplies beds and staff, once we are on the downside of the [00:16:30] curve, below the line for medical resources.
Speaker 2: Gotcha. And I guess, if you were to put yourself in the president of the American College of Surgeons’ shoes and try and decide when to issue that consensus statement, I guess. What do you think they need to see?
Dr. Omar Lateef: So this is a great question. I think we would be close [00:17:00] to doing that if there was a wall around New York, and we knew no one else would come in. If there was a wall around Chicago, and we knew no one else would come in. But the reality is we have open borders, and we have a different time schedule of this. Every city has their own curve. And the problem with the American College of Surgery is how can they issue it all clear, when New Orleans just is experiencing their uptake, right now? Ours was a week and a half ago. Florida is just seeing there’s now. And [00:17:30] we have eight states that have done nothing. So they’ll experience your uptake in two weeks after New Orleans. So what you’re seeing in New Orleans is the impact of Mardi Gras, right? They had politicians that said, “This is nothing, people are making this up, don’t listen to the doctors, let’s party like Mardi Gras.”
And now there’s people like literally dying in hospitals that should not have died. So I would say that because everybody’s on a different trajectory, it’s going to be exceptionally hard for the society to lift those guidelines. Now, in China, this [00:18:00] is what makes it so unique. There was no one allowed in and out of the Hubei Province, right? They were just that was it. It was draconian, this is where you are. But that allowed them to reopen the world in a very staged manner. And factories opened at two months. So they were down on the curve in two months, very similar to Chicago. I think we’re going to roll over that end, by the end of April. Mid to end of April, I think we’re going to be coming down on the curve.
At that point, that’s when you start kicking [00:18:30] your models into high gear and say, “All right, if we start coming down on that April 14th, then by early to mid May, we should be back, right? At full capacity.” But the problem is, if Florida goes up on their curve at the end of April, nobody really lives in Florida, they’re all going to go visit New York and visit Chicago, we’ll have a second wave. That’s what’s actually happened in Hong Kong and in China, they’re having a second wave from people visiting. So America [00:19:00] is wide open. So I don’t know how a surgical organization or a medical group is going to feel comfortable until a vaccine is out in December or January.
Speaker 2: Okay. And maybe if we just started, I hate to give hypothetical questions of but I guess I find myself doing it all the time. But you just mentioned about putting a wall around New York. Maybe there’s a wall around Chicago, you guys get through the peak. And you’re exiting April in pretty good condition with your [00:19:30] thinking about your PPE supplies for one and your provider forces there. I guess, how would you make decisions around getting elective procedures done in your hospital, assuming that you didn’t rely on the consensus statements in the executive orders?
Dr. Omar Lateef: Sure. Yeah.
Speaker 2: It’s a hypothetical question. But in terms of thinking just strictly about having COVID patients in the hospitals, they have been epicenters of COVID now that there’s so many patients in there. Is [00:20:00] any thoughts in terms of a strategy that would allow you to open up again in December?
Dr. Omar Lateef: Yeah. Absolutely.
Speaker 2: If there’s a wall around Chicago.
Dr. Omar Lateef: Yeah. No, absolutely. So look, two things have to happen, we have to win the hearts and minds of the communities, which is a hard thing to do. And it’s very unique right now. So that people weren’t scared and doctors weren’t scared. So if I felt like the environment in Chicago changed from an us versus them, like the health care workers aren’t adequately protecting themselves, and they’re not [00:20:30] good, and there’s some sort of negative vibe circulating around, that has to go away. That’s going to go away, either when we get busier, or it’ll go away with time. So that’ll happen at the end of this month. What I’m thinking is that by early May, we’ll have a downward trend, enough data to support we’re adequately know how to treat the patients that are there, that we could safely do elective surgeries.
Speaker 2: Okay. And would that entail, [00:21:00] my guess, just thinking about risk and not perception from patients, but just risk to patients, if you have COVID patients in your ICU, on the floors, is that too big of a risk to start introducing elective procedures where patients will need to be hospitalized? Or will you have that-
Dr. Omar Lateef: Yeah. So that’s not a medical risk, but no patients going to want that. So who’s going to come in and get their knee done, if there’s COVID positive patients on the floor. [00:21:30] Look, at the end of the day, until there’s no COVID at Rush, who’s going to want to come into Rush tomorrow to get their knee operated off? The irony is a hospital that step up to do the most will have a longer lag and get hit the hardest.
Speaker 2: Can we do that one more time, Omar?
Dr. Omar Lateef: Yeah. So the hospitals that are volunteering or stepping up to take patients, to transfer in patients to fill themselves up with COVID patients, right? They’re going to feel [00:22:00] a bigger broth and a longer layover because it’s going to take a long time to place those patients and get them out of your health care system. And as long as in your health care system, that will invariably, it may earn pride from people and say, “Wow, Rush is great. They have the most number of intubated patients in the entire country outside of the city of New York,” but that just loses more money for us. And at the end, no one’s going to want to actually come here for an elective procedure, while those patients [00:22:30] are still here.
Speaker 2: Is there any kind of middle ground where you can create COVID ward or COVID floors? Or is it, anything along those lines that you can-
Dr. Omar Lateef: Yeah. So we thought about that, and we did that. We split off our ER to have a COVID and ER for respiratory symptoms and a regular ER, but you don’t know who has COVID, you can be asymptomatic and spread it. So you’re going to spread it in the community the same way you’ll [00:23:00] spread it in a hospital. People will be okay with community spread, they will not be forgiving of hospital spread. So the answer that question is no, there is no model in US healthcare, where one floor is going to protect you from another floor because all the people staff, they cross they go back and forth. If we could designate one hospital in each city, a pure COVID hospital, then the other hospitals could do all right, but we’re not going to get there because who’s going to volunteer to just hemorrhage money? And who trust the government [00:23:30] to pay him back?
Speaker 2: That’s a good point. We can dig into a little bit later to this in terms of packages is doing for hospitals, and current financial stresses you’re experiencing. But maybe to stick on this topic quickly, what about, you have this orthopedic center that you’re building, but is there any release valve potential for inventory surgical centers that it sounds like there are numerous centers, converting to COVID treatments areas. But down the line-
Dr. Omar Lateef: What [00:24:00] you guys are asking is yet to be written in our history as a country. This is a first time in the modern era, we’ve had this international pandemic. And what you’re asking you, what are the factors that are going to make you feel safe to at least, one is reopen your hospital but to reopen an outpatient facility that does knees? And the answer is there’s no data that informs that. But the smartest infectious disease doctor in America, Fauci is pushing for more [00:24:30] regulations, not less. So my feeling is that it won’t be till we get it off clear from the government.
Speaker 2: Gotcha. And maybe I know you’re pretty clear with that last piece, but just to push it a little bit further. Do you see an era, in front of a vaccine, where patients could be tested to see if they have antibodies, maybe rapid testing, the PCR testing, to see if they’re actually actively infected that can turn around very quickly? Maybe-
Dr. Omar Lateef: Everything you said [00:25:00] would make that work. But nothing that you said is really available to people.
Speaker 2: Gotcha. Until a lot of policy decision making-
Dr. Omar Lateef: Oh my god, look, we’re still backwards. Wait, Vietnam has done more testing in the United States, right? So just delay that it is an issue. That’s not as of today. But that was as of two weeks ago. So we’re doubling in volumes compared to the rest of the world, right? Like us versus the world, despite our population [00:25:30] being not remotely where some of these other countries are, yet other countries have done more testing than us. And so your last question is, yeah. But if we can test everybody, and then we can know that this person had it in their clear, this person doesn’t have it, they’re negative, they should go get surgery. But we can’t even test doctors in the ER right now at NYU.
Speaker 2: Got it. So a lot of-
Dr. Omar Lateef: These are the biggest heroes in the country, that are the doctors and nurses and respiratory therapists, the frontline in New York, [00:26:00] where everybody has this, and we can’t even test them in a timely way. So my feeling is, we’ll do a better job with stay-in shelter, orders and social distancing than we will with being able to test the hell out of everybody.
Speaker 2: I still have one more question on this potential to open up elective procedures, that your hospital system. Do you have multiple hospitals within the hospital system, that Rush University Medical Center is a part of?
Dr. Omar Lateef: Yes.
Speaker 2: And [00:26:30] if hospitals are open. Could you transfer… I think you’re opening up some hospitals that may have been closed, is that correct?
Dr. Omar Lateef: No, there’s a conversation in Chicago to do that. That’s at the city and federal government level, not ours. But I would say that it’s incredibly unethical right now, to within a system, pick a hospital to go make money, and then put all the COVID patients in another. Right now every bed has to be saved, [00:27:00] in case we turn into New York.
Speaker 2: Okay. And then you’re saying once you once Rush University Medical Center hits their peak, you manage through that peak, you start to see declines in new diagnoses and hospital admissions and deaths, etc. Then there’s this second wave potential.
Dr. Omar Lateef: Right. Yeah.
Speaker 2: Can we talk a little bit more about that? And just how long will that be in play? Is this a second wave just over the summer where patients-
Dr. Omar Lateef: [00:27:30] Nobody knows how long the second wave will be. So here’s what we know. COVID-19 will be part of our society forever now, just like the flu is, just like every other disease that comes out just like SARS, and MERS are, people will get it over and over again now. It takes months to develop something called herd immunity. And it takes months to develop a vaccine. When you get those two things, life in America will be exactly like it once was, [00:28:00] before we get those two things, people are going to feel guilty giving each other a high five, let alone a hug hello. So herd immunity is when enough people get it, they develop antibodies for it, that they no longer are super spreaders, the overall progression of spread of the disease goes down. That’s what’s in China. Enough people have gotten it enough people, and they’ve stopped news spread so that there’s enough immunity there. So if it does happen, you don’t have one person go to a party and infect 37 [00:28:30] people because 20 of them can’t carry it.
Speaker 2: Gotcha. And just to be clear, although I have to recognize that you have been very clear with your answers. But just because this is such a crucial kind of piece, I think for the next 12 months, in the medical device industry. But what you’re saying is that Chicago could get through this peak, you could start to see improving trends, you could start to see hospital resource utilization [00:29:00] come under that or stay under that kind of peak capacity line. And still have COVID patients in the hospital. And it’s still challenging to determine how elective procedures will get restarted. But you won’t have any issues with personal protective equipment, you won’t have any issues with kind of staff availability. So it’s really just the sentiment and the risk of patients catching COVID coming into the hospital, and also patient perception of not wanting to come to the hospital.
Dr. Omar Lateef: [00:29:30] Correct.
Speaker 2: Gotcha. So and you mentioned just on the vaccine side that, that development we could start to see a vaccine in play maybe by early next year. Is that the bogey that you’re thinking about and your team’s thinking about in terms of when we could start to see herd immunity and then elective procedures could be reinstituted? I know you’re waiting for these executive order decisions and consensus statements as well. But is that your [00:30:00] baseline forecast?
Dr. Omar Lateef: Yeah. You need data. You need data to the virus will decide, I guess is the honest way to say it. Like you need data to say when the virus is starting to go down in the neighborhood, then you can have the conversation. But right now you can’t even have the conversation about elective surgery when in Albert Einstein in New York City, there are 1600 patients in the hospital and they have 900 beds. How are you going to do a knee there?
Speaker 2: Gotcha. [00:30:30] Understood. Then just to talk about just how long can Rush University Medical Center continue going on without elective procedure revenues just from a financial standpoint. Are these stimulus package that’s in play, or future stimulus packages, are they going to be able to support Rush University Medical Center? Or how would you have us think about the sustainability of hospital operations?
Dr. Omar Lateef: [00:31:00] So this is like unchartered waters in the modern day, right? Like we were a profitable hospital a month and a half ago, now we’re losing $40 million dollars a month. Is it sustainable? Well, you go and say two things. Hospitals have cash on hand, right? So let’s say one hospitals, 200 days cash on hand. You could get through 200 days, but nobody’s cash on hand is actually in cash. [00:31:30] It’s in the market. And I don’t know what your thoughts are. But I certainly don’t feel like cashing out $200 million in the market, or $700 million in the market or a billion dollars in the market right now. So you’re seeing hospitals get bridge loans.
One of the things that CMS did was give all hospitals in the country and advance payment on future earnings, which is basically a zero interest loan. And so I believe that so we don’t have a choice but to sustain us. And we don’t have a choice but to trust the government. So [00:32:00] patients are coming every five minutes. And we young people are dying in our hospital without an exaggeration, like there is no choice. You have to function like this. So we’ll stay open until our suppliers stop giving us stuff. But my feeling is the governor will order them too. We have money at Rush, there are hospitals with two days cash on hand before this started. They’ll just not pay anybody and keep going until they can’t go anymore.
Speaker 2: I [00:32:30] guess, the hospital association or should we be thinking about numerous hospitals that are smaller than don’t have cash on hand, potentially going under and they’re going to need full support from the government?
Dr. Omar Lateef: Yeah. I don’t understand how the safety net survived it. I’m worried about surviving it dude. I’ve been the CEO for eight months, this job was supposed to be greenfields and goalposts. We had an international pandemic. So now we’re losing $40 [00:33:00] million dollars a month. And so we’re going to start into budget meetings now about next year’s budget. We have no idea how to get there, how to recoup hundreds, and we’ll lose more than $100 million when it’s done.
Speaker 2: Gotcha. Silly question after that statement. But if we could just talk about your capital, capex spending, and just any capital, and I guess budget reorganization, you guys are doing acutely. Just to start.
Dr. Omar Lateef: [00:33:30] So he so here’s the thing, right? When you’re losing $40 million a month, the idea of cutting quarters and cutting salaries so you can save $2 million when people are scared to come to work because they might die? Doesn’t seem to make sense. So what I would say is, that’s our view. We know there’s other hospitals that are cutting salaries that are cutting losses. I just don’t see that personally as a right move. And I’m not going to do it until I absolutely have to.
Speaker 2: Gotcha. Are there I guess [00:34:00] technology purchases robotic systems, imaging systems?
Dr. Omar Lateef: Yeah. Anything not COVID related, we’re going to push right now. So we don’t need it for COVID, we’re certainly not going to do a remodel of the OB floor. We’re not going to buy the new robotic equipment. We’re not going to get the newer neurostimulator that because we need money to continue our operation.
Speaker 2: And then you talked about maybe being down or losing 100 million during this crisis. Roundabout figure, not going to hold you to [00:34:30] that obviously. But just how do you see your capital budget for those types of technology purchases or build outs looking like in 2021?
Dr. Omar Lateef: Look, at the end of the day, the post COVID world is going to be different from the pre COVID world. So I don’t know if people are going to need the same type of elective procedures. It may be that 25% of our society has decreased lung function, and we’re going to need to do more bronco thermoplasty. [00:35:00] So we just don’t know what that world is going to look like. And without honestly getting on the ground in China, I don’t know how anyone’s going to figure that out, there’s just no data to predict it. So I don’t want to lie to you and tell you our capital spend is going to be the same that it was. Even if the government gave us all our money back, we’re going to have to adjust our entire strategic plan and direction based on this.
Speaker 2: Gotcha.
Dr. Omar Lateef: Chicago will have changed, the makeup will have changed.
Speaker 2: [00:35:30] Understood. Maybe we could think about or talk about theoretical recovery period. And just with elective procedures being, those being typically profit centers, depending on which we were to go. We would examine, specifically, but in a recovery period, how do you see that shaping up just focusing on elective procedures? Will there still be a sizable patient backlog? [00:36:00] Is that what the current expectations are?
Dr. Omar Lateef: That’s the hope. The hope is that everybody will have waited, have faith in us and come right back. So that is the absolute hope, then what we’ll do is, we’ll take our staff and say, “Let’s work overtime now and see how much we can recoup from the day’s loss.”
Speaker 2: And what do you think that could look like? And we’ve seen, I think some specific examples that were very short term, though. I think that we’ve heard some data points out of Florida, [00:36:30] the southeast after hurricanes a couple of years ago, where hospitals trying to recoup lost revenues. They went into overdrive and ramped up their procedure volumes by 150, maybe 200% from instances. How feasible is that? Assuming that the backlog is still there, and these patients-
Dr. Omar Lateef: I hate to be cliche, but I love cliches. Necessity is the heart of all innovation and invention. And look, [00:37:00] if it were out $100 million, and people want to get knee surgery, I’m pretty sure we’ll find out a way to operate at 2:00 AM on them. I just don’t believe that the… See, you can’t look at the hurricane models as COVID. Because this is something that wasn’t a natural disaster where everybody is the same as they were before. These people have a different health situation than they had before. And the unique fear of hospitals, people are scared of hospitals. Look, my neighbors don’t want to be [00:37:30] around me right now. I’m a critical care doctor. I work in ICU, like they don’t want to hang out.
Speaker 2: Oh, boy. Yeah. Sorry to hear that. But the perception is-
Dr. Omar Lateef: It’s all good. I’m incredibly good looking. So I feel like that’ll come back soon.
Speaker 2: I appreciate the little levity there with what’s going on. But no, that’s funny. Maybe just to think about when they’re is a will, there’s a way in revenue [00:38:00] hold or in those losses you’re trying to fill with revenue. What are the logistical hurdles in terms of a ramp up to look at a productivity ramp to 150 to 200% to get work through that backlog? Are there hurdles-
Dr. Omar Lateef: Nothing, there will be no hurdles at that point, like we will remove those obstructions. But in general, it’ll be the same thing. Oh, our availability, scheduling clearing people. How soon can you get someone cleared? What are the new guidelines for post? [00:38:30] It’s not like we have a surgical, how do you clear people for surgery post COVID? Like if you had COVID in your lungs, you didn’t have pneumonia. Did you have pneumonia? Do you need an ACO? So there’ll be some clearance issues, but I don’t see anything that’s going to stop people from ramping up. Because the losses are going to be so great. I actually think they’ll be a fight to get those patients back.
Speaker 2: Gotcha. A fight in terms of them wanting to come back, getting elective procedure done? Or could there be a competitive risk to it that there’s less [00:39:00] backlog is full, there could be other hospitals vying for? Gotcha. And if we do see a recovery, and when we see recovery, will there be specific procedures prioritized? I think-
Dr. Omar Lateef: No, I don’t think so. I hear what you’re saying. I think we’re going to get them all in. I don’t think we could prioritize a TAVR over a knee. To each patient, those are value added phenomenon. I think we just have to get people. And I think maybe we could put Botox on the backburner, but we’re not going to make a list. [00:39:30] But no one is, no one’s going to make that list.
Speaker 2: And how do you think about just your staff and just the physical emotional stress that they’re under? And then in the recovery period, will they be ready to go?
Dr. Omar Lateef: Yeah. So this is an interesting question. There are different groups and people have to start to understand that the staff right now that is dying, is the emergency room, the frontline respiratory therapists, critical care doctors and hospitalist. So people who do elective surgery, OR staff, anesthesia, recoveries. [00:40:00] They’re not the ones at the frontlines right now, many of them are home. So my hope is to flip this, push them hard, the same way, we’re being pushed hard right now and get as much back as we possibly can. But they’re not the same groups. So the emotional burden in that there’ll be plenty of time for those heroes to be celebrated, and these others to get back on their horse to do elective surgery. But I’ll just tell you, our orthopedic surgeons aren’t treating COVID.
Speaker 2: Gotcha. And it [00:40:30] doesn’t sound like from where the curve sits today and what you’re experiencing in Chicago that they will be pulled to the frontlines.
Dr. Omar Lateef: So look, I’m an optimist. We’re working with the city and the state, they’re certainly not going to agree with what I’m saying. Because you can’t as a politician, say things are getting better because you risk them getting worse. I can say as a scientist, the doubling times are decreasing. And we have to do some work on optimizing [00:41:00] our internal hospital volume.
Speaker 2: Gotcha. How are you thinking… I wonder if this an economist question to a degree, but with unemployment levels threatening to be higher, as compared to this year, and then the next year. How does Rush University Medical Center think about the impact there, the future procedure volumes in that recovery ramp? The potential recovery ramp, I should say?
Dr. Omar Lateef: [00:41:30] That’s such a scary question even get into. I would say that the numbers right now, when you go from zero to all of a sudden driving 100 miles an hour just getting the old patients cleared, it’s hard to know what a 4.4%. So I don’t know the popular… So history will dictate the answer to that. And here’s why. You can’t look at unemployment from this the same way as you look at regular unemployment because there’s certain jobs that are still there that have health benefits. And there’s certain jobs where people [00:42:00] are unemployed. What’s unclear is if the people that are unemployed were part of the population that was getting elective surgery. Does that make sense?
We don’t know it, like who’s getting unemployed now? What are the types of jobs? So are waiters and waitresses and restaurants who are getting employed, were they the ones who are on track to get elective surgery? Or were retired people who are golfers more likely to be on track for getting elective surgery? So I don’t know that the unemployment rate is going to affect them. I know it’s [00:42:30] vogue to say that the unemployment rate will slow the recovery. I’m sure it will. Again, as you said, I’m not an economist, but look, a huge percentage of our elective surgery are Medicare patients.
Speaker 2: To me, this is not an economist question, but one for a lawyer. But just thinking about these delays in elective procedure, postponements and executive orders from the governor of Illinois and societal consensus statements or guidance. But are there medical legal considerations your [00:43:00] team is dealing with now just in terms of postponing a TARV, and the patient experience has a mortality event? And is that an issue or risk?
Dr. Omar Lateef: No. Of course, it’s an issue and risk. But I think there’s only so much that can keep you up at night. Right now, a 27 year old doctor, who is a resident died in a hospital in New York last week and from COVID. So I would say that there’s enough to keep you up at night, where are you worried about someone that should have had something? I’m sure we’ll get sued. I will [00:43:30] say that the governor issued all COVID related issues non released and the state of New York released malpractice liability gets that you can’t go sue a hospital right now because of international pandemic. That doesn’t mean people won’t. But they’ve issued executive orders to that decree last week.
Speaker 2: Maybe we should just quickly flip back to the capital budget and thinking about currently, think ventilators are potentially [00:44:00] a priority. Or maybe you don’t have any ventilator requirements or needs. But what capital purchase are being prioritized now and will continue to be over the coming months while we have this elective procedure, shut down?
Dr. Omar Lateef: Beds and personal protective equipment. Everything to do with COVID, ventilators, ventilator parts, critical care, infusion pumps, IV tubing. We’re getting screwed on every single one of those. I can’t even explain what it’s like [00:44:30] as a hospital executive to be paying 700% what you would normally pay for a mask when you’re trying to do something good for society or IV pumps not to get discounted because the number of critically ill patients you have is greater than ever. And we had to buy more infusion pumps, we’re paying over top dollar. But that’s the equipment we’re buying right now. I get it, the world’s a business. It was a good way for me to learn.
Speaker 2: Gotcha. And then just in terms of, so you’re buying more pumps?
Dr. Omar Lateef: IV pumps, IV [00:45:00] tubings, ventilator parts, ECMO circuit, dialysis machines, anything to do with complex critical care, we’re purchasing more. Ultrasounds.
Speaker 2: And how does it work with when you have… The defense production act may not be the right term. I’m sorry. So I’m just blanking on right now. But that Trump’s instituted and then these manufacturers make these say ventilators GE. And then are they able to sell them in the free market? [00:45:30] Or do you know how that works? And how access to cheaper-
Dr. Omar Lateef: We don’t know how it works. It hasn’t been clarified. Our belief is that the federal government in the normal circumstance would disperse those to the state and then the state would give those out of the need basis, and the finances should be sorted out by the government. We just don’t know in this time, if that’s what the government will do. And I think anybody who says it will be guessing because they haven’t clarified that.
Speaker 2: Maybe we could just [00:46:00] quickly just to recap, I guess the progression. We’ve talked to, we’ve heard, and had some other discussions over the last couple of weeks, and there have been some that have forecasted. Once the infectious peak hits, say in New York hospital admissions and may lag the infection peak, and then by about a month, and then once that tails off, say in the New York area, maybe in June, that elective procedures could start [00:46:30] to gradually be reinstituted. It sounds like that from your standpoint, and I don’t want to put word in your mouth. But my interpretation of some of your comments is that, that sounds to you like it may be a little bit aggressive. But maybe you can maybe walk us through a timeline of when you think, and I think you’ve already-
Dr. Omar Lateef: So I’m going to give you my honest answer. I’ll give you my honest answer. And it’s the same answer I gave to CNN and to the people on Morning Joe. I think it’s irresponsible [00:47:00] to say that because I would say, I don’t actually think that’s an aggressive. I think that’s a fairly reasonable prediction, if there was a wall built around New York City, and all you did was base it off of what was happening in New York City. The problem is, Florida had their beaches open last weekend, and people were hanging around on those beaches. And last I checked, a lot of New Yorkers hang out in Florida. And so what will happen is they’ll have a continuous reinfection with a continuous surge [00:47:30] over and over and over again.
So that’s going to happen until all the states or the country starts following the same rule. So my fear around New York, I think Chicago will recover even though it’s so much later than New York before New York for a variety of reasons. One of them is because New York has just a widely open community that’s going to continuously be reinfected. So do I think it’ll be open by the end of June? No, I think that their internal cases will continue to decrease [00:48:00] by the end of April and throughout May. But I think unless the country gets serious around this, then they’re going to continuously reinfect everybody. The last I checked, there were eight states, many in driving distance of Illinois, that don’t have restrictions in place.
Speaker 2: That’s right. Great. And so just to with the kind of second wave, I think as you were referring to in Japan and Tokyo [00:48:30] and Hong Kong, or Tokyo, in Japan and other cities in Japan, in Hong Kong, or potentially, in China experiencing this kind of traveler induced to second wave, travelers coming into the country or the cities. And being COVID positive and transmitting there. Then there’s, I guess the other kind of maybe bigger second wave to consider is just what’s going on down in the southern hemisphere, the cases are shooting up in Africa, and then the potential for kind of another seasonal wave in the winter that strikes [00:49:00] the United States. Is that something that’s on your team’s radar? And so I guess the question is, if there are centers or a military surgical centers or whoever decides if the state governments and the local policy decision makers start opening up like the procedures. How big of a risk to open up and then if there is a second seasonal way of in the winter months shut back down again?
Dr. Omar Lateef: That’ll happen. I think that’s what will happen. I think what we have to [00:49:30] open up because we can’t survive, right? So we’ll open up when the numbers get there. But if there’s a second wave, we have to be responsible and close it down.
Speaker 2: And then just in terms of what is the biggest thing that hospitals need from the government and any next legislation. Like money is probably on the top of the list and funding. What if you could lobby, what else would you specifically ask for?
Dr. Omar Lateef: So what would I personally asked for. [00:50:00] Look, it goes down to something as simple as bed supply, money. Look, we’re offering care, we’re not getting paid, we bail out just like everybody else.
Speaker 2: Gotcha. That’s number one, two, three. You guys can make decisions on that. Any policy decisions? It sounds like, again, I don’t want to put words in your mouth. Any policy decisions that you would ask for if you had a direct line to the administration on a national level?
Dr. Omar Lateef: [00:50:30] No, I’d rather not get into that. Here’s what I would say, as it country, we need to do a better job thinking in terms of how do we work as a healthcare system across the country and not each individual hospital take care of themselves. And until we do that, we will have a dysfunctional healthcare system where some people will have extra PPE found in warehouses in a couple of months. And my guys are on the frontlines seeing more patients than anyone in the city with like not the right equipment on. [00:51:00] So until we, as a country, change our approach, and remove politics from healthcare, I can’t imagine getting better. But there’s no ask in there, aside from, let’s share resources as a community so that everybody can get better.
Speaker 2: Gotcha. I’ve got a specific question from the audience just on the care of COVID patients. Has your center have been experiencing, patients cases where pressure [00:51:30] settings on ventilators need to be turned down? And heard there’s study being done at Rush concerning measuring interleukin levels to weak patients who may deteriorate and go on ventilators.
Dr. Omar Lateef: So in six months, the entire world will have protocols on exactly what to do with what ventilator setting and what person looks like. Because all the data that we’re accumulating now we’re putting in organizing and trying to get it out and share. Unfortunately, since it’s in New York now, [00:52:00] and it’s in Chicago now, we don’t have the ability to real time share data to say this is a group that’s getting better or worse. We’re doing many clinical trial, we’re doing tons of clinical trials right now, given our volume is so high. The question specific to ventilator settings are that, we’re absolutely turning some ventilator settings down, and we’re keeping some ventilator settings and turning them up.
And the reason is that managing ARDS is a lung disease caused by [00:52:30] COVID is complicated. And following the guide, you put too much air in your lungs, you can pop them. And so a lot of the transfers that are coming in from the community, the first thing we do is lower the pressure. Will you believe overall that we’ll have a better understanding of which patients deteriorate compared to after we could organize the data? But unfortunately, we don’t have the experience of China organized and presented to us yet.
Speaker 2: Gotcha. [00:53:00] And then what another question that’s come in is, is COVID mutating such that more young people are dying? Are you seeing more way more cytokine storm or storms than you expected to?
Dr. Omar Lateef: Yeah. So the cytokine storm is that, so we’ve always known for years that… So two people can get the same bacteria, they can get streptococcus in their throat, one will be fine. And the other [00:53:30] goes on and develops the severe pneumonia, ARDS is in an ICU. We see this all the time. And so the way that’s been described in healthcare is something called the surge response or systemic inflammatory response syndrome. Some patients for reasons we don’t understand, mount a massive immune response to the same infection while another person can shut theirs off and just recover. So this disease is very similar to every other disease, we [00:54:00] just don’t know which people develop that massive inflammatory response.
The inflammation in your body, one of the soldiers of inflammation are called cytokines. And so that cytokine storm just means you have a massive inflammatory response. So the question that that your reviewer is probably asking is, how do you know who’s going to have that response? We don’t know yet. But we will know like we do and other diseases and a lot of it has to do with genetics and a person’s predispositions [00:54:30] and how they respond to disease. But we can’t typically look at somebody today anywhere and say, “You’re going to do worse with COVID, you’re going to do better.”
Speaker 2: Understood. And then one last one, if I may, can the shortage of hospital ventilators could transport ventilators be used?
Dr. Omar Lateef: Yes. So what you’re seeing now is every type of ventilator, some who worked better than others are actually being used. You’d prefer to use the ventilators that are designed [00:55:00] for ARDS that we use every day. But this isn’t it. This is like an analogous, not in Chicago yet, but certainly in New York, this is like a war zone in many of these hospitals. They can use whatever they can use. So a travel ventilator will work. Now, it won’t work as great, and it won’t optimize your lung function as good as one of the standard ventilators that we’re used to using. But it certainly can be used. So the answer is, yes. There’s a lot of heroic things that can be done.
But really [00:55:30] the take home messages, if we just stop spreading the disease, and anyone sick stays at home, and everybody washes their hands, you won’t need to because it’s not too late as a country to shift under the curve. But if we have Mardi Gras, again while there’s an epidemic going on, then we will run out of ventilators. And we will need to use travel ventilator. So I think that my message is as a society, I don’t judge society, I’m fine with either one. [00:56:00] As a doctor, I can tell you, we’ll run out of ventilators if we don’t stay in shelter.
Speaker 2: Gotcha. And then last question, will Rush test his employees later this year for COVID-19 antibodies?
Dr. Omar Lateef: Yeah. So it’s not just rush. As a society, we have to test everybody. So what we need to know is we need… Testing, we could have spent the last entire hour on our testing failures as a country, as a city as a state, whatever, blame everybody you want to it doesn’t really matter. The reality [00:56:30] is in New York City, if you’re symptomatic, they’re just calling you COVID saying going home because they don’t have enough test. Testing is getting off and ramped up and then having antibodies is helpful to know. So the question I would ask is we’ll test people but we have to have a reason.
We’re not just going to test all employees and say, “Oh, yeah. You have COVID antibodies.” The same way we don’t test people to find out if they had chickenpox as a kid. If a person wants to get tested and goes to their doctor, they’ll absolutely be able to get a test. We’re not going to mandate understanding a person’s immune response [00:57:00] so that we can change their work schedule. We will be respectful of all our people here at Rush and have an interactive discussion on the benefits of doing it.
Speaker 2: Excellent. Well, Dr. Lateef, thank you so much for spending a full hour today. I know you’re busy as heck and good luck to you out there in Chicago. And thanks for all the work you and your hospital is doing to take care of the city.
Dr. Omar Lateef: No problem. Thank you.
Speaker 2: All right. Take care.
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