May 5, 2020
Washington's Physician Practices in Financial Crisis: New WSMA Survey
SEATTLE - Results from a new survey* make clear the coronavirus pandemic is economically crippling physician practices in Washington, putting at risk the ability of patients to access care in communities across the state.
The Washington State Medical Association recently conducted an economic impact survey of physician clinics in Washington state. The results from 136 physician practices illustrate the severe economic hardship many doctors' offices are facing as they struggle to remain available to patients in the community.
The survey's results represent a devastating financial blow to community practices. More importantly, they represent an alarming threat to the ability of Washingtonians to access basic preventive, routine, and chronic health care services in their communities, as practices increasingly are compelled to cut back staff or services or even weigh their ability to stay open in response to the financial fallout of the COVID-19 crisis.
The economic crisis is multifaceted. Practices are experiencing a significant drop in volume of in-patient visits due to state restrictions on non-urgent procedures while at the same time they are burdened with unexpected costs associated with the pandemic (these include outlays for telemedicine equipment and software, increased costs for personal protective equipment, and interest on loans to try to keep their practices afloat). Even more concerning, patient volumes are down as a result of fears around seeking care for health conditions during the COVID-19 crisis.
"These new survey data are hugely concerning, both for the health of our patients and the health of our practices, as they go hand-in-hand," says William K. Hirota, MD, president of the WSMA. "This is the 'canary in the coal mine' of access to care for patients—if we don't act immediately to provide relief for these struggling practices, we will see downstream effects on the ability of our patients to access services in their communities."
On the financial impact on practices, survey respondents indicate, since March 1:
- On average, patient volume has decreased 62%.
- 47% of practices have lost revenue up to $150k. 32% have lost between $150k and $500k. 13% have lost more than $1 million.
- 73% of practices report only having 1-6 weeks "days cash on hand," defined as the number of days a practice could pay its operating expenses with cash available. Ideally, practices should have 18 weeks' worth.
When asked what they expect if the status quo remains for the next 30 days, 30% of practices said they expect to lose an additional $100k to $250k, 21% expect to lose between $250k and $1 million, and 11% expect to lose more than $1 million in revenue.
As the survey indicates, practices are making decisions in response to financial constraints now. On the immediate impact on communities, survey respondents indicate, since March 1:
- 67% are changing office hours
- 55% are laying off or furloughing staff
- 41% have stopped taking a paycheck
- 21% have reduced physician salaries
- Nearly 20% have closed temporarily
These data points represent a snapshot of what is happening in practices across the state and should serve as a wake-up call to both patients and policymakers. As the state begins reintroducing medical services, patients looking to book long overdue appointments may be in for a shock if practices have reduced hours or have closed as a result of the pandemic. And for our state policymakers, it's long understood that when patients are unable to access preventive, routine, or chronic primary care services in their community, they will delay care—leading to worsening health outcomes—or present in hospital emergency rooms, further stressing those critical care settings and raising costs for the health care system.
Finally, the survey indicates the precariousness of the federal response in providing support for physician practices:
- Only roughly half of respondents (52%) who applied for a Paycheck Protection Program loan were successful in securing one.
- Most (53%) did not receive funds from the initial $30 billion tranche of Provider Relief funds.
- Overall, 58% of respondents said they were not able to source a continuous supply of PPE.
"While we are moving forward with recovery plans, COVID-19 will remain in our communities, along with a host of other diseases and care needs. The WSMA is raising a clarion call on policymakers to act," says Dr. Hirota. "Policymakers looked to the physician community to treat patients during the pandemic, and we did just that. The physician community is now looking to policymakers to help ensure that we can keep our doors open so we can continue that care."
Interview opportunities with some physicians who participated in this survey are available.
*The latest WSMA Economic Impact Survey was sent on April 23 to 5,000 physicians working in independent (non-networked) physician clinics. Total respondents equaled 136.
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About the WSMA
The Washington State Medical Association represents more than 11,000 physicians, physician assistants, resident physicians and medical students in Washington state. The WSMA has advocated on behalf of the house of medicine more than 125 years. Our vision is to make Washington state the best place to practice medicine and receive care.