From the early stages of the COVID-19 pandemic, healthcare providers have been reaching out to us expressing some of the most difficult decisions they have ever been faced with; Practices are struggling to keep their doors open as costs mount, and revenue has fallen significantly. Practices are faced with temporarily shutting down or closing permanently, even the ones that have seen growth and success for years. Where should we all be looking to ensure practices remain open, implement the right changes, and evolve their operations for the future?
Most physicians who have been practicing for a few decades remember the days when private payer reimbursements dwarfed Medicare reimbursements. That dynamic has long since flipped, starting with the 2008 recession. Reimbursements have been flat or have lost value from inflation, while practice costs have seen double-digit increases. Meanwhile, hospitals and insurance-owned health networks have seen reimbursements increase to 300% or more of Medicare in some cases, whereas it’s not uncommon for private practices to receive rates far below Medicare standards. Many practices have seen their volumes decrease from 30% to up to 90%, and a significant number are closing their doors for now. As states start to allow elective surgeries to resume in the coming months, some specialties will see some slight increases in patient volume, but this pandemic will have long-lasting repercussions for every practice and every specialty. Whit that in mind, here are four examples of how the COVID-19 Pandemic is effecting specialties across the nation in real-time:
As insurance giants continue to grow, physicians in private practices are routinely used as a cost-saving measure as they are forced to accept ever-decreasing fee schedules. Every player and participant in the healthcare system agrees that the costs are spiraling out of control faster each day, with higher costs and increased deductibles. The misnomer is that private practices are a part of the problem when really they should be one of the most important elements in decreasing costs. Private Practices provide better care and outcomes that save money in the long run, so it’s essential that they are properly compensated so they can avoid being absorbed by vastly overpaid payer owned and hospital-owned systems. Yet, Physicians are having to jump more hurdles than ever just to get paid.
Owning a medical business is like being a C.E.O., patient advocate, accountant, human resources manager, medical healer and office manager all rolled into one. One job title that most physicians put last in their ever-growing list of roles is that of retirement planner. Ensuring that you have your long term financial house in order is often neglected in favor of dealing with all the short term problems that a medical business faces. The mere act of thinking about early retirement forces physicians to look at all of their business practices and make the hard decisions that always seem to be put off in favor of the daily practice needs. Planning for the future can seem daunting, but forcing this personal and professional review is the best thing physicians and owners can do to ensure all their hard work, education, and patient care pays off.