Physicians’ Jobs Impacted by Hospital Finances from COVID-19
Some physicians and advanced practitioners are busier than ever, responding to a surge of COVID-19 patients who arrive at their hospital critically ill. Yet others are seeing a reduction in their work hours—or worse—due to the cost of COVID-19 on their health system or practice.
While the pandemic continues to wreak havoc on the public’s health, with millions infected and tens of thousands of Americans dying from the virus, some fear the financial fallout in healthcare will also have significant effects. Hospitals, medical groups and the clinicians who work for them are already feeling the impact—but in varying degrees.
“In our clients, the vast majority of providers are working,” said David W. Miller, a founding partner at HSG, a health care consulting firm in Louisville, Kentucky. “The level of layoffs or furloughs varied widely, depending on the financial strength of the employing hospital and health system.”
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The financial problem for hospitals
The American Hospital Association (AHA) anticipates the pandemic’s financial strain will continue through the end of the year. From March 2020 to June 2020, AHA reported $202.6 billion in hospital and health system losses, equaling around $50.7 billion per month. From July through December 2020, AHA estimates the loss to health systems will be at least $323.1 billion, which would push the average losses to more than $53.8 billion per month.
“Certain hospitals that saw high numbers of COVID patients needed their providers and were looking for providers,” said Richard Becker, MD, MBA, senior managing director of ToneyKorf, a management and advisory firm in New York. “Orthopedic surgeons were asked to work in ICUs.”
COVID-packed hospitals did not tend to lay off staff; in fact, many brought on additional clinicians, including travel nurses and locum tenens.
Many hospitals in areas with small numbers of coronavirus cases had few choices beyond shedding staff, especially if they were restricted from performing elective procedures. “At some point, you run out of money,” Becker noted.
In some regions, patients continue to avoid elective procedures, emergency department visits, and physician appointments, especially in states where COVID-19 cases have been high.
“In late March, patients were staying away from primary care practices, receiving care via virtual visits,” Miller said. “In many markets, that situation has returned to normal, although spikes, like we are seeing in Florida and Texas, are again reducing volume. Because patients are insecure about going to an office. We have seen consistent cutbacks in office staffing due to this phenomenon.”
An article in Health Affairs, published online on June 25, 2020, noted primary care practices will lose more than $65,000 per full-time physician (on average), due to COVID-19, for a nationwide total of $15 billion.
How physicians are affected by hospital finances
A recent survey of 842 physicians, by Merritt Hawkins in collaboration with The Physicians Foundation, found 21 percent had been furloughed or had a pay cut. Eighteen percent plan to retire, close their practices, or no longer provide patient care.
“A big factor in provider staffing has been the suspension of elective cases, which significantly damage hospital finances,” Miller said. “That led to many furloughs. Two weeks ago, the vast majority of states were allowing those cases, although the recent spike has reversed that trend. For physicians who depend on elective cases, that puts them at greater risk for layoffs/furlough.”
Although physicians, nurses, therapists, and many other clinical staff are employees, how they are dealt with may differ. Some have been furloughed.
“It depends on what the contract says,” Becker said. “That may include cutting a physician’s salary, especially when there are no patients to be seen. The reduced amount is often enough to pay the rent or mortgage and buy food, cover the basics.”
“Practices and health care systems are approaching it that way; ‘What can we continue to give people that are sustainable for the system?’” Becker said. “That does not mean people have not been hurt. They have suffered.”
Other providers also affected
Nurses have been affected by the decline in hospital revenues. Some have worked at the same hospital for decades. Many never expected to lose their jobs.
“You have to think through all of your expense areas and how to best manage that,” Becker said. “You try to preserve people’s livelihoods.”
In some cases, such as at Trinity Health, a 92-hospital system based in Livonia, Michigan, staff have been furloughed, are working fewer hours, or receiving reduced compensation. The extent of the damage depends on the hospital and the unit where the nurse works.
“The one area that is hard hit and not getting better on average is emergency department volume,” Miller said. “Staffing cuts there are slower to be reversed.”
The loss of elective cases has also negatively affected rehabilitative services, he added. “For example, the reduction in elective ortho cases would reduce the demand for rehab of all kinds.”
Across the country, physicians, nurses, and allied health care professionals are feeling the financial cost of COVID-19 and hoping the pandemic ends soon.
“Everyone wants to go back to business as usual,” Becker said.
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