Largest NY Hospital System Sees Return of Patients, Surgeries

next interview. Michael Dowling as President and CEO of north Well Health, New York State's largest healthcare provider, twenty three hospitals, more than thirteen and a half thousand affiliated physicians. And of course you will have seen Michael Dowling next to Governor Cuomo during the beginning part of this pandemic. He's been his advisor and is advising him specifically on reopening plans and so on. Michael, the gratitude of the state and country is with you. But as much as you've done,

we're only part way through this whole story. Are you preparing for more cases now that New York has started to reopen, and of course as we see protests continue, Yes, the numbers of cases have dramatically dropped, and we're only seeing right now very very few new cases. Two days ago across our whole health system, we only had nine

new cases. But given the reopening and giving all of the protests that recently occurred, um we are watching it very very closely to see whether or not there will be an uptick in cases over the next couple of weeks. We have not seen anything yet, but we are we are observing it very very closely, as I said, just in case that might happen. And of course we're also making plans, um uh for the potential that you could have an up surge sometime in the fall during the

flu season. So we are we are prepared. I mean, we've handled the situation up to this point, I think quite well. We've learned a lot, and we definitely are prepared for anything that might hit us in the future. We hope it doesn't occur, and we hope that people you know, comply with the social distancing and wearing masks and do it do the right thing for the good of the community. And if they do that, then I think we will be in a pretty good in a

pretty good situation. But we are prepared. Going back to your question, Michael North, while health Hospitals have treated more COVID nineteen patients than any others in the United States. What I want to ask you is how are your people doing? How And maybe kind of get to look back a little bit now and some of those crazy days and crazy weeks where your hospitals and others in the city, in the state were overwhelmed with patients. As

you look back, how is your staff doing. The staff is doing very very well, empeed And I I do spend myself. I spent a lot of my time out on the floors of the hospital. So I am in the direct contact with staff and all of our facilities on an ongoing basis. Them allow is very very high. Um. It is extraordinary how people came together, work together, supported one another and stuck with it during the whole period

of the severe cases we had. UM. Now, we we do have a lot of support programs for staff, of course, and while doing a crisis, everybody's a drillin is going and they're working very hard. But it is possible that as it slows down now that we're going to see some of the residual results of the circumstance that they were in. And so we're holding you know, meetings on mental health issues, behavioral health issues, stress reduction issues, etcetera.

Just to make sure that we can accommodate any needs of the start have. But overall, among the physicians, the nurses, the social workers, etcetera, extraordinary resilience and unbelievable positivity even in the midst of a situation like this, especially since many of them themselves, you know, had six family members family members who died. I've come across a number of employees, including yesterday, were a nurse she actually took care of her brother who actually died on the floor of the

same hospital that she was practicing. Again, um, but overall quite positive given the circumstances. And it says something it's shot them about healthcare workers. Yeah, it leaves you dumbfounded when you listen to some of those stories, Michael. But the other part of your problem is that with twenty three hospitals under your umbrella, seven fifty outpatient facilities, you've lost a lot of revenue during this time as well.

And of course no one likes to talk about, you know, profit and making money during as tough a time as we've had. But you're going to have to look after conservations and patients who need you know, surgery immediately and so on. How do you do that when you've lost one and a half billion dollars in revenue, Well, you focus on if you focus on your stay positive and you stay up beat. I mean we we we had

a circumstance to deal with. We dealt with it when not only lost revenue, but we had to spend an awful lot of new money is to just accommodate all of the new cases, and we retrofit many of our hospitals. But that's an the lens by which you look at it. During a crisis, you do what you do because it's the right thing to do, and you take care of the community. And now that we are coming out of it, at least for this stage of it, hopefully, and it will be the end stage, we are rebuilding back and

we're transitioning, we're bringing back business. We're focusing a lot on the cases that were deferred that can't be deferred any longer, otherwise you can have some other serious negative effects. So give you an example. Two days ago, I mentioned that we had nine COVID patients into our facilities, but we had seven hundred and twenty intatient admissions on that very same day across our health system. So patients are coming back, surgery is being done, and we're going to

build back up. And I think we're going to build back up in a stronger and will be in a stronger position in the future that we were in the past because we learn some lessons. We have to rethink our organization right now, become more product productive, become more consumers focused, become leaner and uh and use technology and awful lot more about our normable lessons that we learned here. And of course we did get some support from the federal government. So when I look forward a year from now,

we will come out of this. Okay, Um, you know, circumstances, yeah, show you you know, put your into a negative circumstances for a while, but you look forward and you're going to come out of it healthy, strong, and better. I believe sometimes, you know, going through a bad experience weakens you up and gives you a new perspective, gets you to think about what's important and how to build your

organization for the future. So I'm optimistic, um, And you have to be optimistic because it also is in a leadership in any organization should be optimistic at a time like this, because that's the message that you sent to your staff as well. So I thought, absolutely, Michael, just about thirty seconds left. How about some smaller market hospitals. I've seen some news reporting that, boy, a lot of the those types of facilities are really gonna have a

hard time staying afloat what is what? What's your understanding there? Yes, smaller hospitals that are stand alone hospitals that are not part of the larger system, that don't have some of the you know, capabilities that places like us have. But we'll have a most more difficult circumstance. You will have some places across the country, my guests, that will close. You will have some places that will will will allie,

we create alliances with other large entities. But there's going to be a shift and a change in healthcare now, and I think some of that is for the good. Some of the things we were always doing one way we would now do a different way. Especially do you telemedicine and telehealth, etcetera. So yes, um, you'll see some positives coming out of this, But like everything else that happens in circumstances like this, you're going to see some negatives as well. Michael Dowling, thank you so much for

taking the time to speak with us. We really appreciate hearing your perspective from really ground zero on the very front lines of dealing with this COVID nineteen and you know, our our thanks to you into all the staff of your hospitals. Michael Dawling, President, chief executive officer of north Well Health joining us. Just some extraordinary commentary, Vanni. You know, think about the no hospital system in the country handed

more COVID nineteen cases than north Well. Yeah, and saved the state and the rest of the country from you know, a lot of tragedy as well. But I'm sure that one anecdote he told he probably has hundreds more. And you wonder what it's like to lead an organization like that at a time like this. It is time to check in with Bloomberg Opinion. We're joined now by opinion columnist Sarah Holzack. Sarah, thank you for joining a great

opinion piece today. On retail. We've known for some time that retail will be challenged, but there are more challenges facing retail. As the protests got underway and each of the brands were called out to have a response to what was going on in the environment. So where do we stand now with retail? What are CEO is telling you? Yeah, I think the key thing that I've been thinking about is that the clothing category in particular is in dire

straits right now. Um, it's just a corner of retail that was more overstored than any other and already so many of the brands in that space were in a beleaguered position before the onset of the pandemic and the recession. The likes of Victoria's Secret, Banana Republic Gap Chico's expressed these are brands that for years have been struggling to connect with customers based on their fashion alone, and now when you add these other problems on top of it, it's going to be a very very dark time in

this segment of retail for months and perhaps years to come. So, Sarah, as we think about the clothing aspect of retail again, as you mentioned, there's a lot of the fashion aspect to it. How has kind of the pandemic and changing consumer behaviors about how they actually purchase clothing, How has that changed our people more comfortable spending on fairly moderate

the big ticket items strictly online. Yes, so I think that what this has done has basically meant years worth of online adoption was compressed into a matter of months um, and so people are getting more comfortable with purchasing clothing online. I've seen UH surveys that show people plan to keep buying clothing online at the rate that they've begun to now during this time of lockdowns, and that creates a unique challenge for the clothing segment that's not faced elsewhere.

And that's because re terms of online purchases and this segment tends to be extremely high. We all probably know this from personal experience. You buy multiple sizes of a given pair of pants or multiple colors um, and having to foot the bill for return, shipping and restocking um is a really tricky profitability problem for these clothing retailers that just simply is not faced by retailers of electronics, toys, groceries,

that kind of thing. So one of the reasons that people still do go into break and mortar stories is to avoid having to do that Sarah, to try on different sizes and to just try on something so they won't have to send it back. How will stores change their fitting room policies post pandemic. Yeah, so we're seeing a number of different approaches on this front. Coals and t J Max, for example, have their fitting rooms closed

all together right now. Nords from its taking an approach where it has only a limited number of them open and they're cleaning each fitting room in between each patron um, and again you can see how this just compounds the problem of fitting rooms are a key reason that you go to do brick and mortar shopping in the first place for clothing stores, and when that option is not available to you, or when it's suddenly become a lot flunk here, you can see how that might keep people

away or keep people from purchasing as many things as they might have if they were able to try them on. So, Sara, one of the things that we've heard about within retail generally speaking, is this omni channel approach to retailing. You know, the bricks and mortar plus the online being able to you know, maybe pick up something that you ordered online. Is that still seen as the best strategy for a

lot of these retail segments. So I think curbs I'd pick up the getting a huge boost in the grocery category right now, and I think a lot of people are trying that for the first time and reach other's like Walmart and Target have long said that these services have extraordinarily high net promoter scores that once people, once they can get people to try them, uh, they really do stick with them and recommend them to other shoppers.

So this moment of trial for curbside pickup in the grocery space in particular, I think it's going to be sticky and powerful. Um, these experiments that say a Bloomingdale' is doing with curbside pickup, I'm not sure how enduring that's going to be after the pandemic, because again, this seems like a situation where either you'd want to go to the store, try the clothes on, have that sort of social experiential moment, or you'd want to shop online.

And I don't think curbside will be have lasting impacts there. Sarah, Obviously, you know a big story is rent and Gap is suing it doesn't want to pay rent and so on. What are people like MPG group and so on saying about who will up on the hook for rents? Yeah, it's a tricky question and I think it would me everyone's watching that particular lawsuit you mentioned very closely to

see how it shapes out. Um. I think it's interesting to note that different retailers will have different advantages that they can bring to these lease negotiations. If you're someone who's a key traffic driver to a shopping center, so Apple, for example, uh tends to drive a lot of foot traffic to a mall. Or if you're a grocery store which has been opened this whole time and is a basics retailer, you have a lot of leverage in these

negotiations with the mall operators. If you're one of these leaguer clothing stores we were talking about earlier, a Victoria's Secret and express Uh, you know, Victoria's secret is closing a quarter of its North American fleet. That does not really put you on good footing to be able to renegotiate that our terms for your leases. And so I think that is definitely going to play a role and who the ultimate survivors are after all of this tumult. Sarah Hals like, thank you so much for joining us.

We're always glad to get your perspective and all things retail Cheach retail colms for Bloomberg Opinion. You can read more of Sarah's work and other stories from Bloomberg Opinion at Bloomberg dot com, slash Opinion, and on the Terminal by typing o p I n go So, Fannie, I think it's just more tough times for the retail retailers out there. It's gonna be really tough coming back from this pandemic, right, I mean, there were so many of

them on the brink of bankruptcy. Anyway, if you listen to somebody like Howard Divito, Wits or whatever, he will tell you that, you know, they should have been bankrupt a long time ago, some of them. And obviously, this pivot online, as you said, Paul, is just going to accelerate and has been accelerating in the pandemic. So obviously, as we saw online shopping boosted massively, it doesn't mean that the brick and mortar stores will be able to stick around. And we are back looking forward to our

chat with the illustrious David Kotag. Next. David joins us from Cumberland Advisors, where he's the chief investment Officer, chairman and of course just a friend of the show for decades. I would have to say, at this point, David, you've seen money markets sell off. David, is this a sell off based on panic, based on fundamentals, based on what FED chair Paul said yesterday, or all of the above? Oh, Vanni, thank you very much and nice to be with you

and Paul, all of the above. In an extraordinary environment with a VIX, which is an indicator of volatility and risk that's contemporaneous with the markets, that has been at such a high level reflecting that volatility. You think about what we've done in three months. We went from thirty three hundred on the SMP back to thirty two hundred, and now we're somewhere around thirty one and in what looks like a very free fault. Temporarily, it's a wild time.

So we're it's explainable by what you're just outlined, and there will be more, but I'm afraid to say so today, but we got another very difficult drobbles claims number today. We had FED chairman Pal yesterday calling out that a rebound in this economy will take longer than perhaps people anticipated. As you look across the credit spectrum, are you starting to see significant credit quality problems that are going to be an issue for investors going forward. Well, we worry

about the credit problems, Paul. We have seen. We saw the credit spreads blowout at the end of March, and then the FED activities started to narrow them, and they narrowed wherever the market believed the FED would provide market function support and not only functioning, but liquidity to continuously functioned. So there is confidence restored in those credit spread and other credit spreads much less so. So there's a sort

of a division. And I think in the market, I would draw the line at what was previously investment grade of any type. The FED is intent on trying to keep that a functioning market. If it was below if it was a junk credit, and the junk credit last fall, the FED is not going to go bail it out, but they do want market functionality. And I believe that's how you divide the credit analysis in a general thematic way.

David Square off for me, the idea that this will be the shortest recession of all time with the data that we're seeing and what the FED chair said yesterday about unemployments still being just below time present by the end of the year and F one C member is not being able to forecast an interest rate increase until

at least well. I can understand what j Pal tried to convey because he's feeling this so many unknowns, like how long the virus, how much damage does it do, When do we have curated treatment, super people have safety if they get sick, and when do we get a vaccine in mass distribution. We don't know that everything is being worked on. Everybody's hopeful, but we have no idea as to time. So he has to give himself a time cushion, and that would probably be a safe two years.

The second thing he has to do is say, we don't know how deep and how much the damage will be. We're trying to buffer the damage. We're trying to bridge across the valley, and we cannot know how why the valley is and that was the nature of his message. I think the FED in the pal are doing a terrific job confronting something that is a once in a hundred year type of an event. So I believe they were candidate. They said what they did, They said, take

this very seriously. Where markets were on this euphoric rise based upon opening up is an access market swing to access in both directions, and they did it over the last period of time, and now they're correcting the excess. If the sell off gets to the point where we think it is, it will present an entry opportunity again, because in the end of this there is recovery, and after the recovery there's a reconfiguration of economics. People forget,

if I have another minute, Bunny and Paul. People forget there's a survivor bias under way here. Look at the SMP five index, for example, Macy's used to be in it. It's not in it anymore. It's still a five hundred index, but it's reconfigured by definition to capture and adjust for

the changes. So, David, given that time frame that Chairman Pal suggested yesterday, perhaps a two year kind of time frame here for trying to get to the other side here, how how are you positioning your portfolio right now, given that again this may be a little bit longer to recover. Well, the first is today in the stock or FOLI we have a cash reserve, we have had it for a while. We will deploy it and reduce it on entries that appear inviting and we will raise it if markets go

to access. Our biggest overweight in the United States and the US portfolio is the health care sector. We think when this is over, Paul, the healthcare sector in the United States will amount to the GDP of the country. That will be an all time record high American healthcare country. Companies in partnership with others around the world, are doing a stellar job in cooperatively developing what the tools will be to deal with the pandemic. It's this is how

our biggest overweights there. We're worried about the geopolitics of the world, so we have an overweight the defense sector. I wish it weren't so. And we have a position which I really like because I think some changes are going to happen, and that's in water, wind and solar. We are overweight that package. We think there's going to be some reaction around the world. I wish there would be more to the change that's necessary to address climate change.

That's a hopeful estimate, but we've got some money on it is happening. David Kotalk, thank you so much for joining us. As always, we appreciate your thoughts and commentary and your experience, the benefit of your experience. David Coo Talk, chairman and chief investment officer, a couple of advisors joining us at once again with his Sage Advice and Ronnie looking at the markets here. Uh, you know, continued weakness here.

I think it's continuing the third day we've seen the sell off here, we're now uh four off on the Dow. Uh So again the market reacting to a confluence of events from the last several days. Yeah, and I mean, let's not overplay it right now because we had actually been out records before this, which was really sort of the stunning thing. But still for the year now the

Dow was down about ten percent based on today's numbers included. Well, we certainly have equity markets trading off substance substantially today. The question is simply, is this something that is to be expected given the huge rebound we've had off the bottom source, it's suggesting something more. To get some color, we welcome Barry Ridholt's, founder of rit Holt's Wealth Management, is also Bloomberg Opinion calumnists and host of Masters in Business.

So Barry, what say you about this market today? Yeah, this is kind of fascinating when you look at um the after the fact explanation, and we love to do that, We love to create a narrative about that. You had fed chair and Pal's comments about keeping rates low until two and I think he threw a little bit of cold water on the u V shape recovery expectations in the economy. This is going to be a long slow recovery,

especially in the labor market. But also given all the reopenings of various states that we've seen over the past two weeks, the spike in new infections is definitely um startling people. It probably shouldn't, but uh, if you back out New York, New Jersey, Connecticut, in Massachusetts and look at the rest of the country that seems to have ramped up infection rates later than the Northeast, we are

not doing a great job here. We're not doing a great job on flattening the curve elsewhere or testing and contact racing, and so we may see a reopening that stumbles and we go right back down to lockdown. If that's this gets much worse, and I think the markets are looking at that as well. Sorry, markets haven't really cared though about what good or about of a job

we're doing on the pandemic. They only care if businesses are open, and they haven't seemed to be even worried about demand if businesses do open until literally today, Are you saying that suddenly markets change their mind about that, Um, you know. I don't think it's that the markets did not care about the lockdown or or or about how well we're doing. I think they were looking over the valley of the shutdown towards a treatment of vaccine contact tracing.

I think they were very optimistic about our ability to manage this competently and allow if you look at Singapore or South Korea, you look at some of the other countries that have handled the shutdown and reopening well, the expectations where hey, hopefully we can do at least as well as that, and the early data that we're really

just seeing. Remember you're always on a week to two week delay, and today is the eleven, so a lot of states that opened on the first we're just starting to see infection rates and hospitalization rates increase now and over the next few days, we're really going to find out what the opening did. I think this is new data that the market is incorporating and saying, hey, we are far less competent than other countries are in managing this, and there will be an economic price to pay if

we don't do this right. Well, we have Secretary Mnution coming out suggesting that are saying that there will not be another I guess nationwide lockdown if the virus makes a return. So there's kind of a dulling narrative there, Barry. It's interesting, you know, fiscal stimulus has kind of gone into the back burner a little bit. There seems to be a lack of agreement between the Democrats and Republicans

about the next round of stimulus. Is that something you think the market should be paying attention to, perhaps a little bit more so, So let me address both of those issues, Minution and the stimulus in one answer. Um, whether or not there's a national lockdown or not has become completely irrelevant because of the total um lack of leadership on a on a national basis in this it has fallen to the individual states, and we are now

running fifty experiments. What what happens in Wyoming is different than California and Florida and Massachusetts and New York, etcetera. So if if the Treasury Secretary is focused on a national lockdown question, he's missing what's actually taking place where boots are on the ground, what's actually happening state by state. And the answer to your question about UM another round of stimulus depends on how bad the sell off gets. I don't mean today, I mean over the next couple

of months. Think back to September and October two thousand and eight, when we first introduced some form of of UM national rescue plan for the Great Financial Crisis. Congress said no, and then the Dow had its worst week in decades, and by that Monday, no, by Friday became yes. Let this market sell off another ten that's good for a trillion dollars. Let it sell down another thirty from here, and you'll see another two and a half three trillion dollars.

Congress and the President react to a variety of signals. Nothing scares the but Jesus set of people like seeing the market lose a third of its value in a month or two. That motivates them. Barry, we have to leave there already. I did want to ask you about the Federal Reserve chairman and concerns about some kind of frosthiness here, but we're going to have to wait for the next time. And anyway, we're seeing us frothiness today. That is very riddles of riddles wealth management, of course

Bloomberg opinion columns. Of his latest columns include talking about market panic, selling, and other behavioral aspects to this market performance, speaking of which we are down three point seven five percent on the Dow Johnes Industrial Average, the SMP down three, and the NAZAC is the winner today pole but it

is still down two. Yeah. Yeah, significant layoff sell off here, and it's barried with suggesting some combination of the Fed chairman's comments yesterday about the longer term trends for the economy, plus some you know, growing news and growing awareness of perhaps a second wave in certain regions of the country. So the market's kind of digesting that new news and will certainly followed up throughout the remainder of the day. Yeah.

I mean, if we're looking at an unappointment rate of just blow time percent at the end of the year, that is not a pretty picture. Thanks for listening to the Bloomberg Markets podcast. You can subscribe and listen to interviews at Apple Podcasts or whatever. Podcast platform you prefer. I'm Bonnie Quinn. I'm on Twitter at Bonny Quinn and on Paul Sweeney. I'm on Twitter at pt Sweeney. Before the podcast, you can always catch us worldwide at Bloomberg Radio. Well. Eh,