WSMA CEO Jennifer Hanscom discusses the financial impact of COVID-19
The COVID-19 pandemic has financially shocked health care providers across all of Washington State. From large hospitals to solo practices, the financial hardships are universally felt.
The shutdown of non-urgent surgeries and procedures, reduced patient visit volumes, and the money lost while preparing for a potential surge in COVID-19 hospitalizations have created immediate and long-lasting financial impacts on the health care system.
In a recent survey from the Washington State Medical Association (WSMA), 99.4% of independent physician practices reported experiencing a decrease in patient volume since the beginning of March. At that point in time, patient volumes had decreased between 40% – 90%, depending on the type of practice.
Based on the reduction in patient visits, 63% of physician practices reported having to lay off or furlough staff, 61% changed their office hours, and 26% had to temporarily close.
“COVID is certainly impacting our folks financially. It has changed the way that care is being delivered,“ says Jennifer Hanscom, CEO of WSMA. “Some changes are definitely for the better, but others have severe financial impacts as we do our best to try to put patients first and to somehow slow the spread of COVID in our communities.”
In a follow up survey, 30% of respondents reported having just 4 weeks of cash on hand — the industry standard is about 18 weeks, according to Hanscom.
Hanscom says WSMA launched a new survey over the weekend to get a more comprehensive view of how independent physician practices are faring during the public health emergency. So far, just 79 have responded to the survey, but early results show practices’ financial problems are not easing up.
Beyond significant patient volume declines, COVID-19 has also introduced new costs. Physicians report facing increased costs in two main areas – acquiring personal protective equipment and cleaning supplies, and transitioning to telehealth services.
Early results from the survey also show 30% of respondents say they expect it to take more than a year for them to financially recover. When asked about the Payment Protection Program, 86% said they had applied to the program but only 47% said they had received funding.
“When we asked them about the measures they’re taking [to cope with the financial strain], the most significant one that jumped out at me is 62% of the physicians have just stopped taking a paycheck. So, they are attempting to pay their staff and attempting to pay their bills, but in order to be able to cover those hard costs, 62% are just not paying the physicians,” says Hanscom.
Hanscom says she is worried about the long-term impacts of COVID-19. She wonders how patient behaviors will change, how people will adjust to telehealth, how providers will deal with the backlog of surgeries and procedures that are building up, and how some will avoid closing for good.
“My fear is, on the short-term, how many of these practices are going to be able to bridge to a point where they can continue to keep their practice open long-term?” asks Hanscom. “Especially in smaller communities where they are reliant on these community physicians, are we going to see a shut down because they just basically had to go out of business…It’s the complex nature of the unknown.”
Moving forward, Hanscom says she hopes the state government will take action to continue payment parity for telehealth services during the gap between May, when Gov. Inslee’s telemedicine proclamation is set to end, and January 2021 when telemedicine payment parity legislation from 2020 will go into effect.
WSMA is also calling on Inslee to clarify and provide more detail on his March 19 proclamation restricting non-urgent medical procedures. Hanscom says physicians need more guidance on the procedures that are allowed so that medically necessary care can move forward before the proclamation is set to end on May 19.
“The reason why we did the proclamation was because we were concerned about capacity. And we have been assured that there is capacity in the hospital setting. We have heard EDs are empty; we have heard that folks are getting laid off because they’re not doing operations. So, we feel like there’s a lot of capacity in the system right now to start doing more cases and we want to assure the public that we will do that in the safest way to ensure that we’re still leaving room for any influx of COVID.”