We’re in a Healthcare Crisis. Why Are Providers Struggling to Remain Open?


May 1st, 2020

In a healthcare crisis, it would be easy to assume that the industry’s jobs are safe. The reality is that many providers are struggling to stay afloat.

healthcare crisis

It’s easy to assume that because we’re in a healthcare crisis, providers are doing just fine. The reality is that the healthcare ecosystem is struggling mightily to stay open. In a for-profit healthcare system, revenue matters. Those being hit hardest are rural hospitals, physician practices, and dentists. A freeze on elective surgeries and patients postponing wellness visits mean profitability is sinking for many.

Many have often called healthcare recession-proof, as it’s an essential service. However, it seems the field isn’t pandemic-proof.

If Demand Is Up, Why All the Job Losses?

If the demand is so strong because of sick patients, why have healthcare jobs plummeted? According to the Bureau of Labor statistics, there were big losses, including 17,000 lost jobs in dentistry, 12,000 jobs for practices, and 7,000 other practitioner roles. These numbers are in stark contrast to the 374,000 jobs added in healthcare the previous year. 

There have been, however, hiring booms directly related to COVID-19. Hospitals are seeking more nurses, and telehealth vendors are seeking physicians to manage the rising volume. 

Yet many in the field are being laid off or furloughed, as rural facilities and independent providers are facing financial insolvency. Patients that would normally need healthcare services simply aren’t coming to their appointments. Many have been able to shift to telehealth to continue to care for patients, but that doesn’t mean they are receiving reimbursement. 

What About the Healthcare Crisis Relief?

Federal relief funding and changes in telehealth reimbursement policies, including the inclusion of more services by Medicare, may not be enough for these providers to stay afloat. The challenges right now are inconsistent reimbursement from payers and low patient volume. Plus, aid has dried up, with the first big chunk going to hospitals. 

A new survey from the Primary Care Collaborative sheds some insight. One thousand primary clinicians from 48 states and D.C. participated. The survey found that 89% reported decreases in patient visits, and 57% said that less than half of their visits in the last week were reimbursable. 

Virtual Visits Aren’t Always Viable

healthcare crisis telemedicine

Virtual health isn’t feasible, according to the survey, as well. Two-thirds replied that they can’t conduct telehealth visits because patients don’t have computers or internet service. That’s possibly surprising to hear in the modern, technology-friendly world, but it’s a reality in rural America as well as for older patients. Most respondents are using video for less than 20% of visits, using the phone instead. 

The problem is that audio-only visits equate to lower reimbursement rates than video visits. Video visits Further, CMS has a rule that diagnosis over the phone cannot be used for risk adjustment purposes. Still, reimbursement for video appointments is much lower than in-person. Providers believe this should change. 

More Spending, Less Revenue

The COVID-19 healthcare crisis required many providers to start spending more, especially as they try to obtain PPE. Preparation costs money, yet now revenue is drying up. Unless you’re treating coronavirus patients, providers are without patients, just like retailers and restaurants are without customers. 

The demand for help on the front lines is still urgent, but it’s rarely easy to suddenly switch from one specialty to another. Plastic surgeons can’t suddenly become infectious disease specialists. In the fields of medicine that aren’t necessarily connected to urgent healthcare needs, like plastic surgeons and dermatologists, they’ve completely shut down, leaving their staff unemployed.

Healthcare Will Bounce Back

Most experts agree that healthcare is a resilient industry. It’s a service that everybody needs; there are no exceptions. But what the healthcare system will look like in the future is uncertain. 

More rural hospitals are filing bankruptcy, creating medical deserts, where communities have no access to medical care. There could also be more consolidation with healthcare systems buying hospitals and practices. Telehealth is likely also to continue to gain in adoption, especially for digital native patients. 

Further, interoperability and data sharing are still challenges. The problem was widely known, and the HHS interoperability rule finalized earlier this year was supposed to close the gaps. Its enforcement has now been postponed. COVID-19 has uncovered all the cracks in the field relating to the accessibility and portability of healthcare data. With everyone’s eyes wide open to these fault lines, the hope is that healthcare will bounce back and be more agile for the current healthcare crisis and what may come tomorrow. 

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