- A recent study in Health Affairs finds that as a base case (assuming no furloughs), the average primary care practice (PCP) would lose $57,190 per full time physician; those losses are halved to $28,265 per FTP with furloughs, due to the lost volume that occurred from February through May.
- With a second wave of COVID-19 as many experts fear, it’s likely those losses will increase to $75,082 (with no furloughs) per FTP, according to te study referenced in Health Affairs. Those losses decrease to $46,157 per FTP with furloughs.
- More than 110,000 PCPs work in practices where they are full or part owners of the practice, and such practices cannot withstand these types of losses.
A recent study in Health Affairs finds that as a base case (assuming no furloughs), the average primary care practice (PCP) would lose $57,190 per full-time physician due to the lost volume that occurred from February through May. With furloughs, the losses are halved to $28,265 per FTP. If there is a “second wave of COVID-19,” as many experts fear later this fall, it’s likely those losses will increase to $75,082 (with no furloughs) per FTP. Those losses decrease to $46,157 per FTP with furloughs. More than half of the country’s 220,000 PCPs work in practices where they are full or part owners of the practice. These practices typically lack the reserves and access to capital to sustain these types of losses.
Many independent primary care practices will need support from a partner to remain independent. Those physicians who do not receive the support will either retire (25% of PCPs are 60 or older), seek to sell their practices to a hospital or health plan, or shutter their practice and seek employment with a larger group that has greater financial capacity to manage the shock. In some areas, health plans are taking this opportunity to align more closely with independent PCPs.
One example of this is Blue Cross Blue Shield of North Carolina (Blue Cross NC). The plan announced June 24 that it was making lump payments to participating primary care practices in 2020 and 2021 to help them stay in business despite the COVID-19 downturn in volume. In exchange for the payments, the primary care practices must remain open, stay independent and join one of Blue Cross NC’s existing accountable care organizations (ACO) that will hold the providers accountable for the total cost of care and quality outcomes through two-side risk models (or capitated payments starting in 2022). This is an interesting move by BCBS to align remaining independent practices. And it effectively forces specialists and hospitals that are not part of an ACO to manage the total cost of care.
As part of the ACO, Blue Cross NC will provide participating PCPs with data about the cost profiles and outcomes of the specialists and hospitals in their market (at least that’s what I’d do if I was Blue Cross NC). These PCPs will likely shift referrals from high-cost providers to those who appear to practice more efficiently. Like physician-led Medicare Shared Savings Programs, we’ll also likely see ambulatory care shift from provider-based Hospital Outpatient Departments to freestanding sites of service where substitution is appropriate.
So now, even if you’re not in an ACO in North Carolina, as a hospital or provider moving forward, you’re likely to see changes in volume, based on how efficiently you practice, if significant numbers of independent primary care practices accept support from Blue Cross NC.