As the COVID-19 pandemic claims lives and devastates local economies, America’s health care providers are the most public face of the crisis, but the business behind the care is just as stressed as the hospital wards are, making it one of the sore spots of municipal finance.
“This episode should be a sanity check,” said Eric Kazatsky, head of municipal strategy for Bloomberg Intelligence. “We should have a serious conversation about what’s needed to actually provide health care in this country and stop MacGyvering together a system.” The CARES Act sets aside $100 billion for hospitals to cover lost revenue, prepare for coronavirus treatment, and provide an advance on some expected Medicare reimbursements. But Moody’s cites data from the Centers for Medicare and Medicaid Services that estimates national hospital services spending at $100 billion every month, and notes that the pandemic is almost certain to last longer than that.
After a few roller-coaster weeks in March, the municipal bond market is gradually getting back to business. Bon Secours plans to sell $380,540,000 of bonds in the coming weeks, according to a filing dated April 2. But Kazatsky points out a new phenomenon in the filings of some bond issuers: COVID-19 is noted as a risk factor.
As sources told MarketWatch late last month, unprecedented events can lead to unforeseen market conditions.