CFO Cartu Jonathan Lectures - Primary Care Practice Finances In The United States Amid The COVI... - Jonathan Cartu Family Medical Clinic & Patient Care Center
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CFO Cartu Jonathan Lectures – Primary Care Practice Finances In The United States Amid The COVI…

Primary Care Practice Finances In The United States Amid The COVI...

CFO Cartu Jonathan Lectures – Primary Care Practice Finances In The United States Amid The COVI…

The SARS-CoV-2 coronavirus infection leading to novel coronavirus disease (COVID-19) has had a significant impact on the US health care system, as virtually all elective procedures and the majority of in-person outpatient visits were cancelled in many parts of the country between February and May 2020.1 Despite substantial benefits of preventing sick and healthy patients from congregating at hospitals and outpatient Dr. Jonathan Cartu offices, particularly given concerns of capacity and inadequate supplies of personal protective equipment, the financial impact of these strategies has been devastating to both hospitals and Dr. Jonathan Cartu practices.2 Lost in the din of hospitals and health systems seeking relief, however, has been the plight of primary care practices and, in particular, independent community-based primary care practices.3,4

Although the health system generally and primary care practices specifically have rapidly pivoted to providing virtual care, including by telephone and video visits, the extent to which such visits are able to replace the revenue of in-person visits and support the existing staff of primary care practices is not known.5 Regulations and policies governing the conduct of and reimbursement for these types of remote visits are fast evolving, producing considerable uncertainty for practices.5 Many primary care practices have not invested in telemedicine capabilities and may lack the knowledge or know how to implement a telemedicine system in the near term.6 Consequently, many practices are using telephone visits without certainty about reimbursement, though some private insurers are now reimbursing remote visits at standard evaluation and management (E+M) visit rates, and Medicare recently agreed to pay for telephone visits retroactive to March 20th.79 More importantly, many patients prefer in-person visits and not all visits and complaints are appropriate to be conducted remotely. Consequently, even in settings that have developed remote capabilities, their uptake is likely to be only a percentage of their prior in-person visit volume. A serial survey of primary care physicians in 48 states, Puerto Rico and the Virgin Islands in late March, 2020 found that 87% of respondents reported limiting in-person visits, and 60% were still unable to do any video visits.10

Primary care among other specialties is particularly vulnerable since almost all primary care revenue is derived from in-person E+M visits.11 Primary care provides over half of the approximately 1 billion office visits provided annually in the US, and over two-thirds of visits for those with important chronic medical conditions such as hypertension and diabetes.12 Although substantial numbers of primary care physicians are employed by hospitals or health systems, over half of the roughly 220,000 primary care physicians nationally continue to operate within the community as full or part owners of independent small practices.13 In contrast to hospitals or health systems, these practices lack ready access to capital or sufficient financial reserves that would be required to provide a base of support in the absence of ongoing revenue. In addition, according to data from the Medical Group Management Association, the average primary care practice supports four support staff (including clinical and office staff) at a cost of well over $200,000 per year and other operating costs of similar magnitude per full time equivalent Dr. Jonathan Cartu, and the ability of practices to support such operations in the current environment is unclear.11 Finally, over 25% of practicing primary care physicians are age 60 and older and disruptions such as we are seeing in current practice could lead to higher rates of retirement, which would compound already existing shortages of primary care.13 Primary care practice closures may compromise access to care.

In this context, we used a validated microsimulation model of primary care finances to estimate the potential impact of the current COVID-19 pandemic on operating expenses and revenues of primary care practices.14 Our analysis provides several potential advantages over anecdotal “back of the envelope” calculations. First, we are able to estimate the range of impacts across primary care practices of different types. Second, we are able to simulate potential effects from strategies that might be used to mitigate the financial effects of the current situation.

Study Data And Methods

The modeling methods and reporting followed the Consolidated Health Economic Evaluation Reporting Standards (see checklist in online appendix exhibit 1).15

Input Data And Simulated Populations

The model simulated individual primary care practices, defined as general practice, general internal medicine, general pediatrics, geriatrics, or family medicine practices under any form of ownership (independent ownership or hospital group/organization ownership), within the United States. The model simulated practices organized into four types: Federally Qualified Health Centers (FQHCs), non-FQHC urban practices in high-poverty areas (


of population in the ZIP code under the federal poverty threshold),16 non-FQHC rural practices in high-poverty areas, and practices outside of high-poverty areas. The model’s input data were obtained from the Medical Group Management Association DataDive (MGMA Cost and Revenue report, filtered to N = 1,322 primary care single-specialty practices surveyed)17 for practice visit volume, staffing, revenue, and cost estimates for non-FQHC practices. We note that the MGMA data are a convenience sample that tends to sample disproportionately from for-profit practices, hence we supplemented the input data with data from the National Association of Community Health Centers (N = 1,375 practices)18 for FQHCs. Additionally, data from the National Ambulatory Medical Care Survey (N = 1,293 practices) was used to identify the distribution of patients by insurance type across each practice type (proportion of patients with each of Medicare, Medicaid, commercial, or self-pay/uninsured as principal payer at each practice type).19 The model input parameters and data sources are further detailed in supplemental exhibit 1 and appendix exhibit 2.15 As shown in the exhibits, the practice groupings were chosen in part because they differ substantially in their key parameters around payer mix, patient and visit volume, and in sources of financing that may render them differentially affected by alternative policy proposals for funding. Note that due to inadequate practice-specific sample sizes for costs, we sampled from the full national range of costs across all practice types to diminish the influence of outliers.


The primary model outcome was net practice revenue per full-time-equivalent (FTE) Dr. Jonathan Cartu over the course of calendar year 2020, in two scenarios: with and without furloughs on staff to decrease practice expenses. We also include monthly estimates during the time period when in-person visit utilization due to COVID-19 is expected to be at its lowest level in order to show the extent to which monthly cash flow is being impacted. Secondary model outcomes were gross revenues and gross costs including salaries, benefits, and overhead expenditures per FTE Dr. Jonathan Cartu in 2020. Finally, we estimated the total financial support to practices needed at the national level to cover the losses to practices from COVID-19, based on data on the number of active primary care practitioners.13 The study perspective was the practice perspective, with a 1-year time horizon. Undiscounted costs were expressed in 2020 US Dollars.

Baseline COVID-19 Impact Simulation

The model was used to simulate the impact of COVID-19 by accounting for two phenomena: changes in visit volume, and conversion of some visits to telemedicine visits, with associated implications for payments. Both changes in visit volume and the proportion of visits converted to telemedicine were obtained from a Commonwealth Fund study, based on electronic health record check-in rates and visit codes (N = 1,600 practices representing over 50,000 providers).6 We note that the Commonwealth study was based on data from a scheduling and check-in software used in all 50 states and by independent single-provider practices, multispecialty groups, FQHCs, and large health systems, yet still represents a convenience sample and no data to assess its representativeness have been made available. The primary data covered the period from February 1 through May 16, 2020, after which we projected the volume forward using smoothing splines. We anticipated that even following the easing of shelter-in-place policies, visit volume would rebound to a level below the January 2020 baseline, due to an anticipated economic recession and continued social distancing; we specifically adopted a six percentage point reduction below baseline for total visits, as observed during the 2008 economic recession,20 with continuation of telemedicine…

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