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Practices are expected to lose nearly $70,000 in gross revenue per full time physician.
The COVID-19 coronavirus pandemic is having an impact on industries across the world, but that impact is particularly deep when it comes to primary care practices.
According to a study published at healthaffairs.org, over the course of the 2020 calendar year primary care practices are expected to lose about $67,774 in gross revenue per full time physician due to the effects of COVID-19 on fee-for-service payments.
Overall, the study estimates that it would cost the U.S. $15.1 billion to neutralize the revenue losses caused by the pandemic. That figure will likely double if current telemedicine payment policies are rescinded.
The study simulated individual care practices and looked at patient visit volume, staffing, revenue, and cost-estimates for non-Federally Qualified Health Centers.
In a baseline COVID-19 impact simulation, primary practices are expected to lose only $28,265 per full time physician if the practice implements furloughs of staff and reduced salary and benefit costs the remaining 25 percent of staff. This model assumes no loss of revenue, the study says.
In a scenario in which a second shelter-in-place order is issued in November and December, primary care practices are expected to lose $85,666 in gross revenue, with a $75,082 loss in net revenue if the practice maintained its pre-existing costs and $46,157 if the practice implements furloughs, the study found.
According to the study, independently owned primary care practices can expect a bigger hit to their coffers than hospital ownership due to a higher proportion of commercially- and Medicaid-insured to Medicare-insured patients as well as delays and variability among commercial and Medicaid payers paying for telemedicine at in-person rates. This results in 17 percent higher losses or an average of $73,153 in lost gross revenue.
Smaller practices are also being hit harder, as the study found that practices with three or fewer full-time physicians on staff are expected to lose about $78,053 ingross revenue compared to $64,481 in losses for a practice with four to six full-time physicians, and $60,788 for those with seven or more.