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Health service in England is grappling with twin challenges of Covid and clearing record treatment backlog

The number of vacant NHS hospital beds in England is lower than at any time since the start of the Covid-19 crisis, as the health service contends with a wave of infections unleashed by the Omicron variant while attempting to clear a massive backlog of outstanding treatment.

In the week ending April 12, an average of just 4,933 adult general or acute hospital beds were unoccupied across England, according to a Financial Times analysis. This is the lowest level recorded during the coronavirus pandemic, and represents 5.4 per cent of the total.

It shows the NHS has less spare bed capacity than at any time in the past two years and calls into question its ability to meet a commitment to increase non-urgent hospital treatment by 30 per cent above pre-pandemic levels over the next three years.

Nigel Edwards, chief executive of the Nuffield Trust, a health think-tank, said the FT research revealed “an unsustainable level of [bed] occupancy . . . No hospital system can run at that level of occupancy outside of very short periods of crisis.”

The squeeze on hospital beds would inevitably result in patients waiting longer in accident and emergency departments to be admitted, and perhaps being sent to wards without the specialist staff and equipment to meet their needs, he added.

Edwards said that in some instances “it will certainly mean that planned [operations] will have to be postponed or cancelled at short notice”.

The UK government announced in February plans to lift all remaining coronavirus restrictions in England, and the most recent NHS data suggest the latest wave of Covid hospitalisations involving the highly infectious Omicron offshoot BA.2 may have peaked.

But the NHS is under exceptional strain in relation to bed availability, which is recognised as a key measure of the resilience of a health system. Hospitals are considered to work most safely and effectively when more than 10 per cent of beds are available.

The FT research found that only 5.4 per cent of adult general or acute hospital beds were vacant in the week ending April 12, compared with 6.3 per cent at the height of the initial Omicron wave. During the 2020-21 winter, the figure was 9.2 per cent because far more beds were deliberately kept empty to create space for Covid patients.

NHS data released last Thursday showed a record 6.2mn people in England were waiting for non-urgent hospital treatment. These care backlogs have been exacerbated by the pandemic.

Chris Hopson, chief executive of NHS Providers, which represents healthcare organisations, said more than 15,000 patients were at present in hospital with, though not necessarily because of, Covid.

In addition, more than 20,000 patients medically fit to leave could not be discharged because the right care was not available at, or closer to, home, he added.

“That’s placing even more strain on bed capacity,” said Hopson. “And this at a time when the NHS is doing all it can to address care backlogs — so that’s another pressure.”

The issue of bed availability is about much more than infrastructure, he added. “You also need the staff to provide the care.” The NHS had 110,000 staff vacancies, a problem compounded by very high absences, many of them caused by Covid, he added.

Dr Rachel Kaminski, a respiratory consultant at Gloucestershire Hospitals NHS Foundation Trust, said the “vast majority” of patients had come in with ailments other than Covid and had only incidentally tested positive for the disease.

However, they still needed to be segregated which, in turn, was causing delays to operating schedules and prolonging discharges, placing more pressure on a limited bed base, she added.

A senior official at an NHS trust elsewhere in the south-west said local hospitals were being “absolutely battered” by the current Covid wave in addition to a “constellation” of other pressures, including clearing the treatment backlog, difficulty in discharging patients to social care, and an increase in people visiting emergency departments.

The official added that “the risk-benefit of infection control measures” had “completely changed with the latest wave”, and there was an expectation that social distancing and Covid testing rules in hospitals would be relaxed in the near future.

He also said that as a result of clinicians falling ill from the Omicron variant BA.2, the trust was facing “the biggest mismatch of staff to patients that we’ve had at any point during the pandemic”.

Dr Katherine Henderson, president of the Royal College of Emergency Medicine, a professional body, said staff shortages were particularly affecting emergency departments.

She said running an emergency department at the moment was “like flying a plane with half the crew and three passengers to every seat. No airline would take off under those circumstances but we have to.”

Henderson expressed concern the current strain on the NHS could be a “glimpse” of the “new normal”.

“Every single metric in emergency care is worse than ever before and it’s going to take a huge change around to get things better, even to get back to how bad we were in December 2019 — when I was quite firmly saying this is the worst it’s ever been,” she said.

She added that ambulance delays were “the thing that freaks us out most . . . [The NHS has] always been there for you in life and death situations — and now there is a real worry that we’re struggling to get ambulances out to people and . . . to get patients into emergency departments, simply because the system is so clogged up.”

The NHS said that, while hospitals planned ahead to increase winter bed numbers to help ensure patients could be quickly admitted, “having more than a tenth of beds taken up by Covid patients has had a knock on effect”.

Despite these pressures and high levels of bed occupancy “we have managed to admit near record levels of A&E patients and do hundreds of thousands more diagnostic tests than last winter”.

This had been achieved while reducing the number of patients waiting more than two years for treatment which fell for the first time in February, it added.

The NFT bubble is beginning to burst, says the man who was one of the few to see the 2007-2008 financial crisis coming in a book some consider one of the most influential since World War II.

"The NFT thingy is starting to burst," Nassim Nicholas Taleb, author of the 2010 New York Times best seller The Black Swan, tweeted Saturday. "All you need is higher interest rates for things that make no sense to start making no sense."

Taleb cited the recent story of Twitter co-founder Jack Dorsey, whose first tweet sold as an NFT last year for nearly $3 million. It's now only worth thousands, according to a CNBC article published this week.

The tweet's buyer, crypto entrepreneur Sina Estavi, announced last Wednesday that he would be selling the NFT on OpeanSea and would donate half the proceeds to charity, CNBC reported. As of Saturday the highest bid was just over $18,000.

Taleb’s theory about black swans is all about the emergence of ultra-rare events for which the market is unprepared. In 2007, it was falling home prices, and in the 2020s it’s the end of low rates and easy money. The swans may not always be white, in other words.

The Federal Reserve is expected to raise interest rates by half a percentage point in May, part of more aggressive efforts to bring inflation down. U.S. consumer prices rose nearly 9% year-over-year last month, the largest increase since 1981. The market has been bracing for some time for the end of the ultralow interest rates and cheap money that have market pandemic monetary policy. Taleb seems to be arguing that much of this easy money has poured into speculative investments such as NFTs and that activity is coming to an end.

C.Z. Zaho, the billionaire founder of Binance, the world's largest cryptocurrency trading platform, expressed a sentiment similar to Taleb's in a recent interview with Fortune, responding to the 2021 sale of an NFT piece of artwork for $69 million with, "People have have lost their mind."

The recipient of that fortune, an artist known as Beeple—Mike Winkelmann in real life—worried last year that NFT art was in a bubble. He told Fox News Sunday that the internet, in its nascence, was also a bubble—and it eventually burst.

“But it didn’t wipe out the internet," he said. "And so the technology itself is strong enough where I think it’s going to outlive that.”

Zhao also sees the fragility of the market but is quick to point out he's not an art collector.

"Nothing is worth that much, right?" he said, referencing Beeple's mind-blowing sale. "But if you have one person willing to pay for it, if that person suddenly changed their mind, then that is no longer worth that much.”

NFT stands for non-fungible token—a unique, original digital asset that belongs only to its owner or owners. It's a bit like a certificate of authenticity for artwork, music, videos, and even tweets.

NFTs can be sold individually or as part of a collection, as in the case of Bored Ape Yacht Club, a collection of thousands of digital ape illustrations on the Ethereum blockchain. Those who purchase an ape graphic as an NFT gain membership to an exclusive club with members-only perks like access to “the Bathroom,” a members-only online graffiti board. Celebrities like comedian and Tonight Show host Jimmy Fallon and Grammy-winning producer Timbaland are currently using their Bored Ape NFTs as their Twitter profile pics.

A whopping $44 billion was spent on NFTs last year, Fortune previously reported.

This was a very 2022-like week, with the metaverse and crypto leading the way. A year ago, that would have been hard to believe. However, here we are, as a large gaming company looking to build its own metaverse raised billions of dollars, while a crypto company raised millions from large traditional financial institutions as a soap opera swirled around it.

1. Epic Games, $2B, gaming: The metaverse is going to be epic—at least that is what both Sony and KIRKBI—the family-owned holding and investment company behind The LEGO Group—are betting on. Both invested $1 billion into North Carolina-based Epic Games, valuing the gaming giant at $31.5 billion. The deal comes just a week after Epic announced a partnership with LEGO to develop a “family-friendly” metaverse for kids, and the company said the new cash will “advance the company’s vision to build the metaverse.” Founded in 1991, the Fortnite creator has raised more than $7 billion to date, according to Crunchbase data.

2. Circle Internet Financial, $400M, crypto: Crypto may be a lot of things, but boring isn’t one of them. Take Boston-based Circle, for instance. In February, the company—an issuer of U.S. digital coin, a type of stablecoin—announced it terminated its previously announced merger agreement with special-purpose acquisition company Concord Acquisition Corp., but had agreed to new terms that doubled the company’s valuation to $9 billion. That was not surprising as USDC’s circulation has more than doubled since the original deal was announced and has now reached more than $50 billion, according to Circle. But then the company went out and raised another $400 million from big names like BlackRock and Fidelity Management and Research this week. The new SPAC deal was expected to close in December, but could extend to the end of January 2023. While it’s likely Circle would like to access that money in the SPAC deal, let’s wait and see what happens.

3. (tied) Newfront Insurance, $200M, insurtech: Seven months ago, Newfront, ABD Insurance and Financial Services merged to form a $1.35 billion brokerage. It seems that merger went well, because this week the firm closed a $200 million Series D led by Goldman Sachs Asset Management’s Growth Equity business and B Capital at a $2.2 billion valuation. The brokerage is trying to modernize the insurance stack through AI and data-analytics.

3. (tied) Salsify, $200M, e-commerce: We all buy more things online than ever before, and folks that make tools to help retailers improve their e-commerce capabilities are reaping the benefits. Boston-based Salsify was the latest ecommerce software developer to raise a big round, closing a $200 million Series F led by TPG. It follows others this year in the space such as Austin-based Cart.com and Lehi, Utah-based Route in raising big rounds. Salsify—which generated over $110 million in annual recurring revenue in 2021—helps brands customize product information that shows up at online retailers, while also helping retailers more quickly access targeted product information.

5. Pax8, $185M, cloud: While it’s easy for large enterprises to manage their cloud operations, for small and medium-sized businesses it can be much harder. That’s where Denver-based Pax8 comes in. The company, through its thousands of managed services partners, helps simplify the IT process for smaller companies. That business model has made the company a unicorn, as Pax 8 raised $185 million in new equity capital led by new investor SoftBank Vision Fund 2 at a $1.7 billion valuation. Founded in 2012, the company has now raised more than $350 million, according to Crunchbase data.

6. Genies, $150M, internet: Los Angeles-based Genies, which helps people create their own avatar ecosystems, closed a $150 million Series C round led by Silver Lake at a $1 billion valuation. Founded in 2017, the company has now raised more than $200 million, according to Crunchbase data.

7. Be Biopharma, $130 million, biotech: Cambridge, Massachusetts-based Be Biopharma, which is developing B cells as medicines, closed a $130 million Series B led by ARCH Venture Partners. Founded in 2020, the company said it has now raised more than $180 million.

8. Observe.AI, $125M, call center: San Francisco-based Observe.AI, an AI-powered call-center platform, raised a $125 million Series C funding led by SoftBank Vision Fund 2. Founded in 2017, the company said it has now raised $213 million.

9. Filevine, $108M, legal tech: Salt Lake City, Utah-based legal work platform Filevine closed a $108 million Series D led by StepStone Group. Founded in 2014, the company—whose SaaS platform allows law firms to manage documents and collaborate—has now raised more than $225 million, according to Crunchbase data.

10. Natural Fiber Welding, $85M, manufacturing: Peoria, Illinois-based materials manufacturer Natural Fiber Welding closed a $85 million funding round led by Evolution VC Partners. Founded in 2015, the company has raised more than $155 million, according to Crunchbase.

When it comes to the market, there are many differences thus far between the early part of this year and last—perhaps none more pronounced than the dearth of companies going public.

Taking that point a step further is the slowdown in special-purpose acquisition companies, or SPACs. While all the rage the past two years, both SPACs going public and those finding a target to merge with are on the decline—and newly proposed rule changes by the Securities and Exchange Commission regarding blank-check firms could further affect the market, according to those in the industry.

“I don’t want to say it will kill it,” said David Ni, a partner at law firm Sidley. “But it could be a body blow.”

The proposed changes that came from the SEC late last month weren’t unexpected to many in the industry. Just last summer, the agency charged companies and people tied to the proposed merger between SPAC Stable Road Acquisition and space company Momentus with fraud after the deal’s value was slashed.

In general, the commission and Chairman Gary Gensler have been rather public about scrutinizing blank-check companies more closely. “My first response was that I’m not surprised. The SEC has been looking at this for about 15 months,” said Jared Kelly, partner at Lowenstein Sandler.

However, what makes the SEC’s proposal a bit more unexpected is that it comes as the SPAC market has already cooled dramatically. Only 57 SPACs have gone public so far this year. Last year saw more than 600 SPACs go public for the entire year and nearly 250 in 2020, according to SPACInsider. The traditional IPO market has also slowed to a drip, as has the number of targets going public via SPACs.

The plethora of new rule changes may not help.

One of the main proposed changes involves the projections many SPACs make as part of the de-SPACing—when a SPAC vehicle acquires its target company—process. The merged entity can offer projections that go well past a year—even five or six years—and often show growth at an astronomical rate.

“Including projections and forecasts is something that makes SPACs appealing compared to traditional IPOs,” Kelly said.

The SEC proposal includes the removal of the safe harbor for forward-looking statements. In the merger and deSPAC context, a safe harbor protection gives issuers some amount of comfort concerning projections as long as proper due diligence was performed and qualifying language is included to make clear that any projections are based on assumptions and qualifications after such diligence, Kelly said.

The safe harbor does not apply to traditional IPOs, he added.

“The elimination of the safe harbor is the one (proposed change) that could have the largest effect” on the SPAC market, Ni said.

How far that liability extends—possibly to accountants or lawyers involved in the deal—is another concern some have about the proposed rule changes, although Kelly is not sure he completely sees that concern.

“I’m not sure that’s how I read it,” Kelly said. “I think the SEC just wants the disclosure to be vetted by disinterested parties, similar to a traditional IPO.”

The added liability is very similar to what underwriters face in a typical S-1 filing for a traditional IPO, and some see that as an intentional move by the commission.

“I think it’s a case of the SEC trying to bring SPACs and (traditional) IPOs closer together,” said Joshua DuClos, partner at Sidley. “But these things are very different.”

Although many companies consider SPACs as a vehicle to go public, a merger with one is actually an M&A deal, DuClos points out. In addition, a SPAC transaction does not have the same restraints as a traditional IPO, and even has the option for investors to get their money back if they do not like the proposed deal.

While the removal of the safe harbor protection could mean more lawsuits and potentially larger liability for parties involved in the deSPAC, Kelly points out it is not uncommon for public M&A and deSPAC deals to often face lawsuits already—the proposed changes would just increase the ability for plaintiffs to make additional claims in deSPAC transactions.

While liability issues and the safe harbor removal are seen as the keys to the proposed changes, there are other significant changes. The proposed rules also include new “fairness” disclosure requirements; certain disclosure is required regarding the fairness of the deSPAC transaction to target shareholders and unaffiliated shareholders of the SPAC.

The effective result is that a fairness opinion will be included with every deSPAC deal. Previously, such opinions were included in limited circumstances, such as when there were conflicts of interest between the SPAC principals and the deSPAC target.

The proposed changes are now in a 60-day comment period, which is expected to end in late May. They could be approved within two months after that period ends. However, while many expect the commission to enact some of the proposals, they also expect some changes in what was released in March.

SEC Commissioner Hester Peirce already has dissented.

“I think most of the rules are generally fair,” Kelly said. “Some, notably the underwriter liability, go a little too far, but I expect some scaling back in the final rules.”

Kelly thinks the SEC would like to get rules in place by the fourth quarter. There are currently more than 600 SPACs looking for targets, and many are running up against their redemption walls in the fourth quarter of this year and first quarter of next year and are looking for targets.

“They want to get this done before a big wave of deSPAC activity hits,” Kelly said.

What the SEC will decide is anyone’s guess, but SPAC activity seems on the decline—likely brought about by underperformance on the public market and investors being able to find yield elsewhere amidst rising interest rates—and significant rule changes could hamper it more.

However, those in the industry seem to think the final approved changes likely will be toned down from late March.

“If approved as is, you’ll see very few SPACs in the future. … but I think the SEC wants to regulate the product more—it does not want to kill the market,” Kelly said.

- In fairness to the Twitter board, this might be more of a concern about other potential bidders vs just me