The COVID-19 pandemic is posing unprecedented challenges for physician practices, especially in terms of financial stability.

The COVID-19 Public Health Emergency has unveiled innumerable intimidating challenges for physician practices. Many are labeling it as the ‘black swan’ – an unpredictable event with dire consequences. Ranging from diminishing patient volume to lost patient revenue, the coronavirus pandemic has rendered a severe financial impact on the healthcare industry.

According to MGMA April findings, 97 percent of medical practices have experienced a significant financial blow due to the pandemic, both directly and indirectly. This includes a 60 percent decrease in the patient volume and a 55 percent associated decrease in revenue of the practice, since the outbreak of the pandemic. These deteriorating patient volumes inevitably prove especially detrimental to the privacy practices that lack any safety blanket from large medical entities and corporations and still struggle to keep their doors open.

A more recent survey conducted by MJH Life Sciences reveals more astounding stats and trends. The respondents included physicians, nurse practitioners, practice administrators, and others. The practice types contained within the scope of the survey were private and independent practices, hospitals and health systems, group practices, HMO-based practices, and others. Practitioners from all specialties were taken on board for the survey, including pediatrics, primary care physicians, dermatologist, Obstetrics and gynecologists, neurologists, ophthalmologists, oncologists, rheumatologists, and urologist.

Unemployment/ Furloughing

According to this survey, the pandemic has particularly impacted the staffing plans at medical practices. 20% of the responding practices identified that they had to face furlough while 7 percent were permanently laid off. Similarly, 32 percent of non-physician clinical staff was furloughed, while 8 percent was removed entirely. Also, 38 percent of the non-clinical staff were forced to leave temporarily, while 14 percent were permanently fired. The stats are a direct indicator of the impact the pandemic has had on the unemployment levels in the healthcare industry, and consequentially on the practices.

Anticipated Revenue Loss

Physician practices were asked to identify their anticipated loss in revenue for 2020 as a result of COVID-19. Thirty-six percent of the respondents stated that they were expecting 21-40 percent revenue loss in this year, following the pandemic. Twenty-three percent reported a 1-20 percent loss, while 20 percent reported 41-60 percent predicted loss in practice revenue during the current year.

Restoring Headcount Post Reopening

The majority of the physician practices, however, were not optimistic about restoring the headcount once the practice reopens – 37 percent identified that they wouldn’t return to the same headcount. Thirty-four percent, however, were positive about restoring the laid-off personnel as practices reopen and as patient volume starts restoring. Interestingly, 23 percent of the respondents stated that they hadn’t decreased staff during the pandemic and still don’t expect to do so in the near future.

Expected Patient Volume Post Reopening

In terms of patient volumes, the majority of the physicians expect patient volume to decrease further. Forty-seven percent stated that in-person appointments are likely to drop, while 26 percent hoped for it to increase once practices reopen; 18 percent, however, expected it to remain the same. Similarly, in terms of telemedicine visits, 25 percent expect the patient volume to decrease, 16 percent expect it to stay the same. In comparison, a significant 42 percent expect it to increase, once the facilities reopen. This then signals the trend towards the widescale adoption of telemedicine as a convenient and quality healthcare option.

Expected Payment Delays

Payment delays, nevertheless, are expected both from insurance copayments as well as direct payments by patients. Thirty percent of the physicians expected insurance providers to delay their payments, while 35 percent expected the patients to delay payments themselves directly. Once again, the magnitude of the financial impact of COVID-19 increases under such stressful situations.

Overall Financial Impact

Interestingly, 15 percent of the physicians identified that some areas of their practice did experience some financial benefits due to COVID-19. This is mainly attributable to telemedicine and virtual care, which has witnessed an increase in patient volumes during the pandemic. Similarly, 49 percent of the responding physician practices identified that they received financial relief from the CARES Act or any other form of compensation, which again counted as a positive financial impact.

The coronavirus pandemic has taken a financial hit on the medical practices, crushing many to the point of facing survival risks. Steep declines in revenues, worrisome drops in patient volumes, and increasing repayment concerns have pushed many medical practices to shut down. While telemedicine has only helped pick up a small portion of the slack, the overall financial impact of the pandemic is particularly perturbing.