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"Contact tracing is going to be a public health requirement": Atlantic Health System CEO

Brian Gragnolati, Atlantic Health System CEO & President and Former American Hospital Association Chair joins Yahoo Finance’s On The Move panel to discuss the demand for coronavirus testing in the U.S. and assess the outlook for hospitals during the pandemic.

Video Transcript

ADAM SHAPIRO: Part of the key to reopening the US economy is testing. And to help us understand how hospitals are going to play a role in testing Brian Gragnolati, Atlantic Health System CEO and president is joining us. He's also the former American Hospital Association chair. And our specialist on COVID-19 and coronavirus, that would be Anjalee Khemlani is here. Anjalee, I'm going to turn it over to you because you understand these issues best. Anjalee?

ANJALEE KHEMLANI: Thanks, Adam. And thanks for joining us, Brian. I definitely want to hear your thoughts about, you know, what's going on right now as it stands when it comes to the testing supplies because that has been, I feel like, one of the biggest issues when it comes to how this is all rolling out. So what have you been seeing right now?

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BRIAN GRAGNOLATI: Sure. Testing was a problem. Testing remains a problem. And if we don't get it right, it will be a big problem as we try to continue to bring this economy to life. And I can give you a little context for that. So you know, we've been at this since early March. At our peak here at Atlantic in our hospitals, we've had 900 patients at any given time. We're down to 300 at this point. So we're feeling as though we're seeing the light at the end of the tunnel. But nonetheless, that's still a tremendous number of patients.

And oftentimes those patients, we're not able to get test results on for several days. Now we're down to about 24 hours. But it needs to be able to be done immediately at a point of care if we're really going to be effective in moving this forward and be able to do the kind of contact tracing that's going to be required when we see flareups, because we need to remember, this virus has not gone away. We don't have a silver bullet drug to care for it. And we don't have a vaccine.

ANJALEE KHEMLANI: Right. And one of the things that I think has come back into the discussion is whether or not health systems are able to handle this, you know, whether you're talking about larger or smaller. And what does that look like playing out across the board? Is it possible for some of the smaller health systems to, in fact, ramp up with contact tracing efforts, et cetera?

BRIAN GRAGNOLATI: You know, at the end of the day, contact tracing is going to be a public health requirement. So there's going to have to be, in each state and in each county and each municipality, a public-private partnership that allows that to occur.

So I'll give you an example. Just this morning on our command center call, we were having a conversation about an area at one of our hospitals was seeing an increase in cases after having gone through significant declines. The most important thing for us to do is to then use our data analytics to try to target where those increases are occurring to see if there's a pattern in a particular neighborhood. And we have the ability to do that and then work with public health officials to get on that area, do the contact tracing to see if we can really tamp out that outbreak.

Because imagine this as a forest fire. And we're at the point now here in New Jersey where the fire is no longer raging. But we're still going to see hot spots. And we've got to have that partnership in place.

And I believe that most hospitals can work in that kind of a partnership. But certainly, the large health systems, we have that capability. And we're here to help those who may not be part of our health systems.

ADAM SHAPIRO: Brian, the Trump administration announced, what was it, $11 billion to help get these tests where they're needed. How does this work? Help us understand. Does the Atlantic Health Systems procurement office speak with Jared Kushner's office, or do you speak with someone at the New Jersey level? How do you get the tests?

BRIAN GRAGNOLATI: Yeah. I think what you've heard from the Trump administration on many issues is really pushing a lot of this down to the state level. And Governor Murphy has done a really good job in the state of New Jersey engaging the health care community in these efforts. And so we really work very closely with the health commissioner and her team as we roll these out.

As a matter of fact, I sit on an advisory committee. We meet twice a week with the health commissioner and her team. And this topic of how do we move forward is front and center on the work that we're doing.

So I think you're going to see that work really come through the states. The federal government has got to be there to use its powers under the Stafford Act and other things to be able to get the production necessary to get these tests available. But really, I think it's going to be deployed on a state by state basis.

JULIE HYMAN: Brian, it's Julie here. I want to ask you about the financials of all of this, because of course, in many hospitals in many states around the country, elective surgeries have been postponed. And in most places, they still haven't picked up again. That's the major source of revenue for your hospital system and for other hospitals around the country. So what does the financial standing look like for you guys. And in particular also for places like rural hospitals that don't have a lot of resources.

BRIAN GRAGNOLATI: Yeah, so this is a tale of two cities on that topic. There are those of us who are in a surge area, where we are seeing a tremendous level of activity with COVID patients. And there's a huge cost to that. And the revenue does not nearly match the cost associated with that care. But nonetheless, it is a level of clinical activity. At the same time, we had to really dial down on those non-emergent cases.

So our revenue here at the Atlanta Health System over the last months is really down about 40% because of all of that, yet our expenses are up. So that's really created a lot of negative pressure on our financials. Now, for many organizations that has been just absolutely devastating. And they've had job losses, furloughs, and things like that. For larger organizations, we've been able to carry those expenses to date.

And that's why we really need these financial subsidies coming in from the federal government in order to be able to continue to do that because make no mistake, we have a lot of activity in our organizations. But across the country when I talk to my colleagues where they haven't had large COVID outbreaks, they have a lot of empty hospitals and a lot of capacity.

So it's really a tale of two pieces. And the funding needs to be nuanced to deal with both the cost of high COVID but also the loss of revenue. And that's really what some of the stimulus money has been identified for. And some of it is starting to come out. But we still need more.

ANJALEE KHEMLANI: Brian, I hear you talking about all the efforts from the federal level. But it seems like more is still needed. You've had former health officials like Andy Slavitz saying things like, you know, the plan for the federal government is that there is no plan. And so I'm curious on your thoughts about that, having been, you know, in the chair for the American Hospital Association. What are your colleagues saying about the federal level plan right now?

BRIAN GRAGNOLATI: So on one hand, people are very encouraged that the government has really tried hard to get money out quickly. You saw that in the first funding tranche. But you also saw a lot of criticism associated with that because it didn't necessarily get to the-- funding to the areas that it needed. So the second bill that was-- or the second tranche of funding that came out was really to fix the things that didn't work in the first level of funding. But again, the high, hot areas where there were high COVID activity was not addressed.

So the third funding that's come out now really addresses some of those needs. But it only went part-- partially there. And we're really working hard with the federal government now to have them to continue that funding because we really need it. So-- so the-- so the bad news is we didn't really get everything we need. The good news is that there's active conversation about this. And certainly our elected representatives are working very hard to make sure that New Jersey gets what it needs.

ADAM SHAPIRO: Brian Gragnolati is the Atlantic Health System CEO and president. Thank you very much. We hope you will come back. And we will be right back after this.

BRIAN GRAGNOLATI: Thank you.