Pandemic exacerbates primary care practices’ financial struggles


The pandemic exacerbated the financial struggles of many primary care practices, and some still have not recovered from COVID-19–related losses, according to experts and the results of recent surveys by the Primary Care Collaborative (PCC).

Ann Greiner, president and CEO of the Primary Care Collaborative

Ann Greiner

Fewer than 30% (26.4%) of primary care clinicians report that their practices are financially healthy, according to the latest results from a periodic survey by the PCC. An earlier survey by the PCC suggests clinicians’ confidence in the financial viability of their practices has significantly declined since last year, when compared with the new survey’s results. When the older survey was taken between Sept. 4 and Sept. 8 of 2020, only 35% of primary care clinicians said that revenue and pay were significantly lower than they were before the pandemic.

Submissions to the new PCC survey were collected between Aug. 13 and Aug. 17 of 2021 and included 1,263 respondents from 49 states, the District of Columbia, and two territories. The PCC and the Larry A. Green Center have been regularly surveying primary care clinicians to better understand the impact of COVID-19 throughout the pandemic.

PCC President and CEO Ann Greiner said in an interview that the drop over a year follows a trend.

Though primary care faced struggles before the pandemic, the COVID-19 effect has been striking and cumulative, she noted.

“[Primary care practices] were healthier prepandemic,” said Ms. Greiner. “The precipitous drop in revenue when stay-at-home orders went into effect had a very big effect though pay structure and lack of investment in primary care was a problem long before COVID-19.”

COVID-19 has exacerbated all that ails primary care, and has increased fears of viability of primary care offices, she said.

Ms. Greiner pointed to a report from Health Affairs, that projected in 2020 that primary care would lose $65,000 in revenue per full-time physician by the end of the year for a total shortfall of $15 billion, following steep drops in office visits and fees for services from March to May, 2020.

In July of this year, she said, PCC’s survey found that, “Four in 10 clinicians worry that primary care will be gone in 5 years and one-fifth of respondents expect to leave the profession within the next three.”

The July PCC survey also showed that 13% of primary care clinicians said they have discussed selling their practice and cite high-level burnout/exhaustion as a main challenge for the next 6 months.

Robert L. Phillips, MD, family practice physician in Fairfax, Va.

Dr. Robert L. Phillips

Robert L. Phillips, MD, a Virginia-based physician who oversees research for the American Board of Family Medicine, said, “Practices in our national primary care practice registry (PRIME) saw visit volumes drop 40% in the 2-3 months around the start of the pandemic and had not seen them return to normal as of June of this year. This means most remain financially underwater.”

End to paycheck protection hurt practices

Conrad L. Flick, MD, managing partner of Family Medical Associates in Raleigh, N.C., said the end of the federal Paycheck Protection Program (PPP) at the end of 2020 caused further distress to primary care and could also help explain the drop in healthy practices that PCC’s survey from last year suggested.

Conrad Flick, MD,  Family Medical Associates, Raleigh, N.C.

Dr. Conrad Flick

“Many of us who struggled financially as the pandemic hit last year were really worried. PPP certainly shored that up for a lot of us. But now it’s no longer here,” he said.

Dr. Flick said his 10-clinician independent practice is financially sound and he credits that to having the PPP loan, shared savings from an accountable care organization, and holding some profit over from last year to this year.

His practice had to cut two nurse practitioners this year when volume did not return to prepandemic levels.

“The PPP loan let us keep [those NPs] employed through spring, but we were hoping the volume would come back. Come spring this year the volume hasn’t come back, and we couldn’t afford to keep the office at full staff,” he said.

The way primary care physicians are paid is what makes them so vulnerable in a pandemic, he explained.

“Our revenue is purely based on how many people I can get through my office at a given period of time. We don’t have ways to generate revenue and build a cushion.”

Family physician L. Allen Dobson, MD, said the survey results may have become even more grim in the last year, because primary care practices, especially small practices, have not recovered from the 2020 losses and effects have snowballed.

L. Allen Dobson, MD, Community Care Physicians Network, Mount Pleasant, N.C.

Dr. L. Allen Dobson

Even though primary care offices have largely reopened and many patients have returned to in-person visits, he said, physicians are dealing with uncertainties of COVID-19 surges and variants and are having trouble recruiting and maintaining staff.

Revenue that should have come to primary care practices in testing and distributing vaccines instead went elsewhere to larger vaccination sites and retail clinics, noted Dr. Dobson, who is chair of the board of managers of Community Care Physicians Network in Mount Pleasant, N.C., which provides assistance with administrative tasks to small and solo primary care practices.

COVID-19 brought ‘accelerated change’

COVID-19 brought “an accelerated change,” in decreasing revenue, Dr. Dobson said.

Small primary care practices have followed the rules of changing to electronic health records, getting patient-centered medical home certification, and documenting quality improvement measures, but they have not reaped the financial benefits from these changes, he explained.

A report commissioned by the Physician Advocacy Institute found that the pandemic accelerated a long national trend of hospitals and corporate entities acquiring physician practices and employing physicians.

From January 2019 to January 2021, these entities acquired 20,900 additional physician practices and 48,000 additional physicians left independent practice for employment by hospital systems or other corporate entities.

Further straining practices is a thinning workforce, with 21% or respondents to the most recent PCC survey having said they were unable to hire clinicians for open positions and 54% saying they are unable to hire staff for open positions.

One respondent to the PCC survey from Utah said, “We need more support. It’s a moral injury to have our pay cut and be severely understaffed. Most of the burden of educating patients and getting them vaccinated has fallen to primary care and we are already overwhelmed with taking care of patients with worsening mental and physical health.”

According to Bruce Landon, MD, MBA, professor of health care policy at the Harvard Medical School’s Center for Primary Care, Boston, another source of financial strain for primary care practices is that they are having difficulty attracting doctors, nurses, and administrators.

Bruce Landon, MD, MBA, Harvard Medical School, Boston

Dr. Bruce Landon

These practices often need to increase pay for those positions to recruit people, and they are leaving many positions unfilled, Dr. Landon explained.

Plus, COVID-19 introduced costs for personal protective equipment (PPE) and cleaning products, and those expenses generally have not been reimbursed, Dr. Landon said.

Uncertainty around telemedicine

A new risk for primary care is a decline in telemedicine payments at a time when practices are still relying on telemedicine for revenue.

In the most recent PCC report, 40% of clinicians said they use telemedicine for at least a fifth of all office visits.

Even though most practices have reopened there’s still a fair amount of telemedicine and that will continue, Dr. Landon said in an interview.

In March of 2020, the Centers for Medicare & Medicaid Services lifted restrictions and that helped physicians with getting reimbursed for the services as they would office visits. But some commercial payers are starting to back off full payment for telemedicine, Dr. Landon noted.

“At some point the feds will probably start to do that with Medicare. I think that’s a mistake. [Telemedicine] has been one of the silver linings of this cloud of the pandemic,” he said.

If prepandemic payment regulations are restored, 41% of clinicians said, in the most recent PCC survey, that they worry their practices will no longer be able to support telemedicine.

Possible safety nets

Dr. Landon said that one thing that’s also clear is that some form of primary care capitation payment is necessary, at least for some of the work in primary care.

The practices that had capitation as part of payment were the ones who were most easily able to handle the pandemic because they didn’t see the immediate drop in revenue that fee-for-service practices saw, he noted.

“If we have a next pandemic, having a steady revenue stream to support primary care is really important and having a different way to pay for primary care is probably the best way to do that,” he said. “These longer-term strategies are going to be really crucial if we want to have a primary care system 10 years from now.”

Ms. Greiner, Dr. Flick, Dr. Phillips, Dr. Dobson, and Dr. Landon report no relevant financial relationships.

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