As we move along the curve of the COVID-19 pandemic, medical practices have had to adapt operationally and financially. In doing so, many practices have been actively making operational changes in relation to how staff and providers interact with patients. Keeping patients, staff, and providers safe, while maintaining volumes, has been at the forefront. While the growth in telehealth will likely continue in the future, patients will still have cause to personally visit medical offices around the country.
HMS Valuation Partners (HMS) has been working with medical practices across the nation around issues raised by COVID-19. Some of the operational and financial changes we have seen are noted below. The list is intended to stimulate dialogue, not dictate immediate policy. Best practice in the wake of COVID-19 have not been formally established as of the writing of this piece. Medical practices should continue to look toward federal, state, and local health officials, professional associations, the Centers for Disease Control and Prevention (CDC), and legal counsel for guidance. At this time, HMS is assisting practices with assimilating guidance from these various sources and tailoring protocol and changes at the practice level.
Potential Operational Modifications
- Adjusting the practice scheduling template
- Limiting the number of patients scheduled per hour to accommodate distancing
- Separating patient types by time of day
- Well Visits vs. Acute Care Visits
- Symptomatic for COVID-19
- Patients with Acute Respiratory Illness
- Rearranging the physical space of the office
- Removing excess furniture and equipment to allow for more space and minimize surfaces for contamination (toys, magazines, and other commonly shared items)
- Setting waiting room chairs a minimum of 6 feet apart
- Designating areas for patient types to minimize exposure
- Maintain clean rooms for charting and periodic breaks
- Changing patient flow as patients are triaged
- Signing in may be done via phone app to avoid contact
- Distributing PPE or mandating home PPE be worn prior to entry into waiting area
- Isolating patients with suspected symptoms
- Minimizing patient contact
- Allowing staff members who do not provide direct patient care to telecommute (i.e. billing office staff, referral coordinators, etc.)
- Accommodating the increasing volume of phone calls from patients trying to understand COVID-19 in addition to the normal volume of calls
- Continuing to shift non-emergent patient care to telehealth to minimize patient and staff exposure
These operational changes will have certain impact on practice revenues and expenses. Critical to the success of the practice, will be its ability to navigate safety concerns while maximizing revenues and keeping operational costs down. Below are some notes on how changes may affect revenues and expenses.
Potential Revenue Impact
- Decrease in patient volume due to the need for physical distancing
- Increase in processing time between patients to allow for more extensive cleaning of the rooms, which limits patient volume
- Increase in revenue from telehealth given the expansion of this service
- Increase in revenue from non-clinical services that may include graduate medical education (GME), administrative services, call coverage services, etc.
Potential Expense Impact
- Increase in personal protective equipment (PPE) costs for staff and patients
- Increase in costs associated with alcohol-based hand rub and masks to be placed in all reception and patient care areas
- Increase in information technology (IT) costs for telehealth services and telecommuting for staff
- Increase in costs associated with staff exposure, quarantine, and absenteeism
This new norm for providers will have an impact on their volumes, quality metrics, and compensation for 2020 and potentially 2021.
All of this raises questions that have yet to be answered. What impact will this have on national benchmark surveys? How will surveys be utilized when considering the FMV analysis for physician compensation into the near future? Further, valuators are accustomed to normalizing for changes in revenue patterns and/or extraordinary expenses. Will the recovery of physician compensation, however, mirror the gradual return of the economy on the predicted L-shape curve or will compensation return to pre-COVID-19 levels relatively quickly?
Those with questions about the above issues as well as compensation design and/or physician management issues are welcome to contact an HMS expert today.