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Primary care doctors look at payment overhaul after pandemic disruption


For Gabe Charbonneau, MD, a primary care doctor in Stevensville, Mont., the coronavirus pandemic is an existential threat.

Dr. Charbonneau, 43, his 2 partners and 10 staff members are struggling to keep their rural practice alive. Patient volume is slowly returning to pre–COVID-19 levels. But the large Seattle-area company that owns his practice is reassessing its operations as it adjusts to the new reality in health care.

Dr. Charbonneau has been given until September to demonstrate that his practice, Lifespan Family Medicine, is financially viable – or face possible sale or closure.

“We think we’re going to be okay,” said Dr. Charbonneau. “But it’s stressful and pushes us to cut costs and bring in more revenue. If the virus surges in the fall … well, that will significantly add to the challenge.”

Like other businesses around the country, many doctors were forced to close their offices – or at least see only emergency cases – when the pandemic struck. That led to sharp revenue losses, layoffs and pay cuts.

The primary care practice of Kevin Anderson, MD, in Cadillac, Mich., is also scrambling. The practice – like others – shifted in March to seeing many patients via telemedicine but still saw a dramatic drop in patients and revenue. Dr. Anderson, 49, and his five partners are back to about 80% of the volume of patients they had before the pandemic. But to enhance their chances of survival, they plan to overhaul the way the practice gets paid by Medicare.

Jodi Faustlin, CEO of the for-profit Center for Primary Care in Evans, Ga., manages 37 doctors at eight family medicine practices in the state. She’s confident all eight will emerge from the pandemic intact. But that is more likely if the company shifts from getting paid piecemeal for every service to a per-patient, per-month reimbursement.

One of those 37 doctors is Jacqueline Fincher, MD, the president of the American College of Physicians. Dr. Fincher said the pandemic “has laid bare the flaws in primary care” and the “misguided allocation of money and resources” in the U.S. health care system.

“It’s nuts how we get paid,” said Dr. Fincher, whose practice is in Thomson, Ga. “It doesn’t serve patients well, and it doesn’t work for doctors either – ever, let alone in a pandemic.”

Physicians and health policy experts say the pandemic is accelerating efforts to restructure primary care – which accounts for about half the nation’s doctor visits every year – and put it on a firmer financial footing.

The efforts also aim to address long-festering problems: a predicted widespread shortage of primary care doctors in the next decade, a rising level of physician burnout and a long-recognized underinvestment in primary care overall.

No data yet exist on how many of the nation’s primary care doctors have closed up shop permanently, hastened retirement or planned other moves following the COVID-19 outbreak. An analysis by the American Academy of Family Physicians in late April forecast furloughs, layoffs, and reduced hours that translated to 58,000 fewer primary care doctors and as many as 725,000 fewer nurses and other staff in their offices by July if the pandemic’s impact continued. In 2018, the United States had about 223,000 primary care doctors.

“The majority [of primary care doctors] are hanging in there, so we haven’t yet seen the scope of closures we forecast,” said Jack Westfall, MD, a researcher at the academy. “But the situation is still precarious, with many doctors struggling to make ends meet. We’re also hearing more anecdotal stories about older doctors retiring and others looking to sell their practices.”

Three-quarters of the more than 500 doctors contacted in an online survey by McKinsey said they expected their practices would not make a profit in 2020.

A study in the journal Health Affairs, published in June, put a hard number on that. It estimated that primary care practices would lose an average of $68,000, or 13%, in gross revenues per full-time physician in 2020. That works out to a loss of about $15 billion nationwide.

One main problem, said Dr. Westfall, is that payment for telehealth and virtual visits is still inadequate, and telehealth is not available to everyone.


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