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Meeting the financial challenges of COVID-19

Medical Economics JournalMedical Economics July 2020 Edition
Volume 97
Issue 11

Faced with unprecedented circumstances due to COVID, as well as uncertainty about the future, what can primary care providers do to stay afloat financially and continue caring for patients?

On March 3, Susan Coker, the practice administrator of Tri County Internal Medicine in suburban Atlanta, and Kelly Stopek, the practice’s medical director, left for a vacation in Costa Rica. When they returned a week later, Coker recalls, “the world had changed.” COVID-19 had arrived.

“Since March 10, we’ve spent 90% of our time on COVID-19 in some form,” Coker says, adding that the practice began seeing a “dramatic decrease” in patient visits following President Donald Trump’s national emergency declaration a few days later. Through the end of April, patient visits were 50% to 60% of what they’d been pre-pandemic, and the practice’s revenues were poised to take a similar hit. “If your charges aren’t coming in, then the payments won’t be there either,” she says. 

In anticipation of diminished income, Tri County eliminated its evening hours of operation, cut everyone’s pay by half and furloughed some staff members. But thanks to a $400,000 loan obtained under the Paycheck Protection Program (PPP) and the beginnings of a rebound in patient visits, the practice has started bringing back furloughed employees and restoring salaries, Coker says. 

Tri County, of course, is hardly alone in feeling the impact of COVID-19. In a Medical Group Management Association (MGMA) member survey conducted the first week of April, practices reported an average decrease of 55% in revenue and 60% in patient volume since the onset of the pandemic. And data from the U.S. Department of Commerce’s Bureau of Economic Analysis show spending on health care overall fell by 18% in the first quarter of 2020 — before the full effects of the coronavirus had even become apparent. 

Meanwhile, a joint survey by the Primary Care Collaborative and the Larry A. Green Center found that as of early May, 42% of respondents had laid off or furloughed employees, and 13% predicted they would close within the next month.

Making the picture bleaker — especially for primary care practices — has been the accompanying drop in ancillary services. In an MGMA survey in late May, about half of respondents said their ancillary service volume had declined by 51% or more since the onset of the pandemic. Another 40% reported declines of between 11% and 50%.

“A primary care practice can’t make it financially just on submitting E/M codes,” says Jacqueline W. Fincher, M.D., MACP, president of the American College of Physicians and one of five doctors at McDuffie Medical in Thomson, Georgia. “It’s the ancillaries like EKGs, lab work and breathing tests that really support your office. And right now, primary care practices are losing that business.” 

Fincher says overall revenue for the Center for Primary Care, the regional independent practice consortium to which McDuffie Medical belongs, was down 20% in April 2020 compared to April 2019, and the expected falloff for May was 25% to 30%.

Telemedicine: The new normal?

Faced with these unprecedented circumstances, as well as uncertainty about the future, what can primary care providers do to stay afloat financially and continue caring for patients? The answer, according to practice management experts, lies in doing what practices have always done during times of crisis: Look for ways to increase revenue and hold down expenses, while communicating frequently with patients and staff.

On the income side of the equation, “telemedicine is your best bet,” practice consultant Elizabeth W. Woodcock, MBA, FACMPE, told attendees of the recent “COVID-19 Practice Survival Guide” webinar hosted by Medical Economics®. Woodcock added that several of her clients were aiming to get patient visits back to 75% of their pre-pandemic levels by the beginning of June through a combination of telemedicine and in-office visits.

Increasing numbers of practices are adopting that strategy. According to data compiled by The Commonwealth Fund in early May, 12% of visits to ambulatory care practices were conducted via telehealth. That compares to fewer than 1% of visits two months earlier. 

CMS, too, is encouraging greater use of telehealth during the pandemic by increasing Medicare payments for some telehealth visits to match those of in-office visits, retroactive to March 1. It is also loosening restrictions on how and where telehealth services may be provided and who can provide them. For example, patients now can have telehealth visits from home rather than having to travel to a designated originating site, as they were previously required to do. And doctors now are allowed to provide telehealth visits with patients in other states. 

Rehearse telehealth visits

Woodcock advises practitioners who haven’t previously used telehealth to rehearse visits before trying them with patients. “Role-playing helps you figure out how to deal with the paperwork and side issues, like consent, scheduling and virtual rooming,” Woodcock explains.

Ideally, she says, rehearsals should include a physician, a scheduler, someone to role-play a patient and a medical assistant. The latter’s responsibilities should include getting the patient on the phone, ensuring the technology is working correctly and performing clinical intake before turning the patient over to the doctor. When the visit is finished, the scheduler can set up any needed follow-up appointments.

Stopek says Tri County began providing telehealth visits within a few days of the mid-March national emergency declaration. “We just kind of threw it out there and fixed any problems as they came up, until it was a smooth workflow,” she recalls. By early May about 20% of the practice’s visits were being conducted that way.

Patients generally seem happy with telehealth treatment, Stopek adds. “They’re getting a lot of their problems addressed with the comfort of not having to come here, where they’re worried they might get infected.” 

Still, she says, from a health care standpoint, telehealth is a double-edged sword. “You want to be sure you’re taking care of the patient the best you can, but sometimes there’s a limit to how much you can do with a phone visit.”

Fincher agrees. “Sometimes the risk (of an office visit) is less than them having a heart attack at home,” she says. “If I think they’re having an exacerbation of congestive heart failure, I’ve got to know if they have swelling in their legs and what their lungs sound like. I can’t do that over the phone.”

Like Tri County, the Center for Primary Care began offering telehealth visits immediately after the emergency declaration, and by late April they accounted for about 60% of its visits, says Fincher.

Challenges of telehealth

The biggest challenges Fincher and her colleagues face with telehealth visits have been demographic and technological. “We’re in a rural area with a lot of older patients,” she explains. “Many of them don’t have smartphones or are in places where bandwidth is limited,” and thus can’t access the practice’s patient portal.

“Just to get a patient connected can take as long as the appointment, especially the first time, because it’s all new for them,” she says.

 Bent Tree Family Physicians, a seven-physician family practice with locations in the Dallas area, encountered a somewhat different challenge when it began offering telehealth visits: patient anger.

“Our patients weren’t used to telehealth, and for a lot of them the reaction was, ‘Wait, you’re going to bill me for this?’ because they had been accustomed to getting a lot of that phone care for free,” says Guy Culpepper, M.D., Bent Tree’s founder and now one of three owners. 

But from a revenue standpoint, the practice had little choice, Culpepper says. In-person visits had fallen from a daily average of 200 pre-COVID to between 10 and 20 in early May. Moreover, revenues from sonograms, stress tests and other ancillary services had all but disappeared. In April, the practice applied for but didn’t get a PPP small-business loan, leading it to furlough most of its 70 employees and the partners to forego their own pay. 

However, help came soon after from a different, albeit unexpected, source: Bent Tree’s patients raised $750,000 through a GoFundMe page, which enabled the practice to bring back some staffers. (The practice was able to obtain a PPP loan in May, which allowed it to rehire the rest of those it had furloughed.)

Reviving ancillaries

When it comes to reviving ancillary services, there’s nothing new or unusual for practices to try, says Owen Dahl, MBA, CHBC, a medical practice management consultant and principal of Owen Dahl Consulting in Texas, who participated in the recent survival guide webinar by Medical Economics®. Patients have to be persuaded to return, and the keys to that are communication and reassurance — and patience.

“Let patients know what you’re doing to keep them safe,” he says. “Show them with videos on your website or testimonials from other patients that you have everything under control and they’re not jeopardizing their safety by coming in.” All forms of communication, including phone calls, texts, emails and frequent updates on the practice’s website, are useful in maintaining relationships with patients, Dahl adds.

Overhead costs

In addition to exploring ways to maintain revenue during the pandemic, experts say that practices need to scrutinize overhead costs and reduce or eliminate any that aren’t essential to practice efficiency or patient care. And since salaries and benefits usually account for the largest share of overhead, reducing those costs often requires furloughs and/or layoffs.

Although layoffs are always painful, Dahl says the process can benefit a practice in the long run if conducted strategically. He recommends assessing each employee’s skills and how — or whether — those skills fit with the practice’s long-range goals and can be adapted to the different ways care will be delivered post-pandemic.

“We know that telemedicine is going to be a big part of the equation in the future,” he says. “So what are the core competencies and skill sets practices are going to need from their employees to succeed in that environment?”

In addition, with fewer employees, those who remain can be cross-trained to enable them to take on additional tasks, thereby increasing their productivity and value to the practice. 

In the end, though, every practice is hamstrung in its forecasting by the unpredictable nature of COVID-19 and its impact on health care. “It’s an incredibly confusing time (for) everything, from knowing what’s the right thing to do for patients to how to handle your staff,” Dahl says. “All we can really do is take it one day at a time.”  

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