MGMA 2020: Preparing financially for a post-COVID-19 world

October 21, 2020
Keith A. Reynolds
Keith A. Reynolds

As the pandemic wreaks financial ruin on practices across the country, physician leaders need to begin to plan for their financial futures after the pandemic has passed.

The COVID-19 coronavirus pandemic has thoroughly derailed what was shaping up to be a good year for physician practices, but practice leaders should plan rather than prepare for what the financial implication will be in the post-COVID-19 world.

This was the topic of a seminar given by Fulcrum Strategies’ Chief Financial Officer and Strategic Planning Consultant Cynthia Nyberg as part of the Medical Group Management Association (MGMA) Medical Practice Excellence Conference 2020.

She said that prior to the coronavirus spreading across the U.S., unemployment was at 3.5 percent, wage growth was between 3.9 percent and 4 percent, the labor participation rate was 63.4 percent, and revenue and patient visits were up 16 percent.

Along with the pandemic came a raft of challenges for practices including limiting patient visits to essential services only, the implementation of telehealth seemingly overnight, furloughs of staff, attempts to secure paycheck protection program loans, and keeping patients and staff safe from infection through the purchase of personal protective equipment, Nyberg says.

While some in government say that the pandemic has passed, Nyberg says she doesn’t think the country is there yet especially with case numbers increasing in many states.

She says some of the challenges that will be facing practices post-COVID and beyond are:

  • payer mix changes due to unemployment
  • changes in payers’ reimbursement strategies
  • consumerism
  • the utilization implications of telehealth
  • surprise billing legislation

Some financial strategies for the post-COVID world presented by Nyberg include:

  • Strategic planning – Nyberg says she always has multiple plans, but it is wise think about whether one knows what their goal is, what are the challenges, what data is needed, where the data is coming from, and how results will be disseminated.
  • Key Performance Indicators – To formulate these quantifiable measures on how the practice or employees are meeting objectives practice leaders must have easy access to comparable data and the ability to change reporting time frames.
  • Cash flow modeling – It’s important to see what is going to happen, cash-wise, before it happens.
  • Cost of a visit – It’s important to know how much a visit costs with the likely rise of capitation agreements post-COVID.
  • Patient policies for financial responsibility – As patient financial responsibility rises, practices must set clear financial and telehealth expectations.
  • Increased access to care – Whether it is a physical facility and telehealth, managing capacity will help financially.
  • Technology – Whether it is used for telehealth, a dashboard for Key Performance Indicators, patient communications, patient payments, payment plans, or transparency and competition patients are thirsting for a more technological experience with their physician.