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Doctors lose jobs after speaking out about unsafe conditions
In April 2020, hospitalist Samantha Houston, MD, lost her job at Baptist Memorial Hospital–North, in Oxford, Miss., after she publicly campaigned to get donations of N95 masks for nurses. Dr. Houston filed a lawsuit against the hospital, saying she was improperly fired for speaking out. The lawsuit has not yet gone to trial.
In January 2017, emergency physician Raymond Brovont, MD, was fired by EmCare, an emergency physician staffing company, after reporting understaffing at hospitals with which it contracted in the Kansas City, Mo., area. Dr. Brovont sued EmCare, and the company lost the case. In February 2019, it was ordered to pay him $13.1 million in damages.
These are just two of several cases in recent years in which physicians have spoken out about problems involving patient care and have been sanctioned. Other physicians who see problems choose to stay silent.
Doctors often hesitate to speak out because of the prospect of losing their jobs. A 2013 study of emergency physicians found that nearly 20% reported a possible or real threat to their employment if they expressed concerns about quality of care.
When physicians do not speak openly about important medical issues, the quality of care in their institutions suffers, said a coauthor of the study, Larry D. Weiss, MD, JD, a retired professor of emergency medicine at the University of Maryland, Baltimore.
“Physicians can’t effectively represent patients if they are always thinking they can get fired for what they say,” Dr. Weiss said. “If you don’t have protections like due process, which is often the case, you are less likely to speak out.”
In the first few weeks, health care facilities were struggling to obtain personal protective equipment (PPE) and to create policies that would keep patients and caregivers safe.
Physicians such as Dr. Houston took the initiative to make sure their institutions were taking the right steps against COVID-19 and found themselves at loggerheads with administrators who were concerned that their organizations were being portrayed as unsafe.
The case of one physician who spoke out
One of the highest-profile cases of a physician speaking out and being removed from work during the pandemic is that of Ming Lin, MD, an emergency physician who lost a job he had held for 17 years at St. Joseph Medical Center, in Bellingham, Wash. Dr. Lin lost his job after he made a series of Facebook posts that criticized the hospital’s COVID-19 preparedness efforts.
In an interview, Dr. Lin discussed the details of his situation to a degree that rarely occurs in such cases. This is one of the most extensive interviews he has granted.
Postings on Facebook
Dr. Lin said that on the basis of an intense study of the virus at the onset of the pandemic, he developed many ideas as to what could be done to mitigate its spread. While working as a locum tenens physician on his time off, he could see how others dealt with COVID-19.
Dr. Lin said from past experiences he did not feel that he could present his ideas directly to administration and be heard, so he decided to air his ideas about how his hospital could handle COVID-19 on his Facebook page, which drew a large audience.
He said he was certain that hospital administrators were reading his posts. He said receptionists at this hospital were advised not to wear masks, evidently because it would alarm patients. Dr. Lin said he posted concerns about their safety and called for them to wear masks. Soon after, the hospital directed receptionists to wear masks.
Dr. Lin’s Facebook posts also criticized the hospital for taking what he felt was too long to get results on COVID-19 tests. “It was taking them up to 10 days to get test results, because samples were being sent to a lab in California,” he said. He suggested it would be faster to send samples to the University of Washington. Soon after, the hospital started sending samples there.
In just a couple of weeks, Dr. Lin said, he voiced almost a dozen concerns. Each time the hospital made changes in line with his recommendations. Although he didn’t get any direct acknowledgment from the hospital for his help, he said he felt he was making a positive impact.
How employers react to physicians who speak out
Physicians who speak out about conditions tend to deeply disturb administrators, said William P. Sullivan, DO, JD, an emergency physician and lawyer in Frankfort, Ill., who has written about physicians being terminated by hospitals.
“These physicians go to the news media or they use social media,” Dr. Sullivan said, “but hospital administrators don’t want the public to hear bad things about their hospital.”
Then the public might not come to the hospital, which is an administrator’s worst nightmare. Even if physicians think their criticisms are reasonable, administrators may still fear a resulting drop in patients.
Dr. Houston, for example, was helping her Mississippi hospital by collecting donations of N95 masks for nurses, but to administrators, it showed that the hospital did not have enough masks.
“It is not helpful to stoke fear and anxiety, even if the intent is sincere,” a spokesperson for the hospital said.
Administrator fires back
Dr. Lin’s posts were deeply concerning to Richard DeCarlo, chief operating officer of PeaceHealth, which runs St. Joseph Hospital. Mr. DeCarlo discussed his concerns in a video interview in April with the blogger Zubin Damania, MD, known as ZDoggMD.
Comments on Dr. Lin’s Facebook posts showed that people “were fearful to go to the hospital,” he told Dr. Damania. “They were concluding that they would need to drive to another hospital.”
Mr. DeCarlo said he was also unhappy that Dr. Lin did not directly contact administrators about his concerns. “He didn’t communicate with his medical director,” Mr. DeCarlo said in the interview. “The ED staff had been meeting three times a week with the chief medical officer to make sure they had everything they needed, but he only attended one of these meetings and didn’t ask any questions.”
Dr. Lin maintains he did ask questions at the first meeting but stopped attending because he felt he wasn’t being heeded. “I found their tone not very receptive,” he said.
Doctor allegedly offered “misinformation”
At the start of the pandemic, some hospitals made it clear what would happen to doctors who brought up lack of PPE or other problems to the media. For example, NYU Langone Medical Center in New York sent an email to staff warning that speaking to the media without permission “will be subject to disciplinary action, including termination.”
PeaceHealth took a different tack. “It’s not that we have a policy that says don’t ever talk to the media,” Mr. DeCarlo said in the ZDoggMD interview, but in Dr. Lin’s case, “what was at issue was the misinformation. His leader went to him and said, ‘Look, you’re posting things that aren’t accurate.’ ”
Dr. Lin disputes that he provided any misinformation. In the interview, Mr. DeCarlo cited just one example of alleged misinformation. He said Dr. Lin called for a tent outside the emergency department (ED) to protect patients entering the department from aerosol exposure to COVID-19. Mr. DeCarlo said the tent was not needed because fewer people were using the ED.
“To put it in an extreme way,” Mr. DeCarlo said of Dr. Lin’s posts, “it was like yelling fire in a theater where there is not a fire.”
Dr. Lin said the hospital did briefly erect a tent and then removed it, and he still insisted that a tent was a good idea. He added that Mr. DeCarlo never mentioned any of the other suggestions Dr. Lin made, nor did he state that the hospital adopted them.
Doctor gets a warning
Dr. Lin said that after he started posting his concerns, he got a call from the emergency department director who worked for TeamHealth, an emergency medicine staffing firm that contracted with PeaceHealth and employed Dr. Lin, too.
Dr. Lin said his immediate supervisor at TeamHealth told him the hospital was unhappy with his posts and that he should take them down and suggested he might be fired. Dr. Lin said the supervisor also asked him to apologize to the hospital administration for these posts, but he refused to do so.
“Retracting and apologizing was not only wrong but would have left me vulnerable to being terminated with no repercussions,” he said.
“At that point, I realized I had crossed the Rubicon,” Dr. Lin said. He thought he might well be fired, no matter what he did, so he took his story to The Seattle Times, which had a much wider platform than his Facebook page had.
Dr. Lin lost his job at St. Joseph a week after The Seattle Times story about him appeared. “About 10 minutes before my shift was supposed to start, I received a text message from TeamHealth saying that someone else would be taking the shift,” he said.
In a release, TeamHealth insisted Dr. Lin was not fired and that he was scheduled to be reassigned to work at other hospitals. Dr. Lin, however, said he was not told this at the time and that he found out later that the new assignment would involve a pay cut and a significant commute. He said he has not taken any new assignments from TeamHealth since he lost his job at St. Joseph.
Dr. Lin has filed a lawsuit against PeaceHealth, TeamHealth, and Mr. DeCarlo, asking for his job back and for an apology. He said he has not asked for any financial damages at this point.
Since leaving St. Joseph, Dr. Lin has been working as an administrator for the Indian Health Service in the upper plains states. He said he can do some of the work at home in Washington State, which allows him to be with his wife and three young children.
Dr. Lin no longer sees patients. “I feel I have lost my confidence as a clinician,” he said. “I’m not sure why, but I find it hard to make quick judgments when taking care of patients.”
He said many doctors have told him about their own troubles with speaking out, but they did not want to come forward and talk about it because they feared more repercussions.
Do doctors who speak out have any rights?
Because TeamHealth, Dr. Lin’s actual employer, asserts he was never actually terminated, Dr. Lin has not been able to appeal his case internally in accordance with due process, an option that allows doctors to get a fair hearing and to appeal decisions against them.
The American Academy of Emergency Medicine pointed out this problem. “Dr. Lin, as a member of the medical staff, is entitled to full due process and a fair hearing from his peers on the medical staff,” the academy said in a statement supporting him.
The Joint Commission, the hospital accreditor, requires that hospitals provide due process to doctors before they can be terminated. However, Dr. Sullivan said employers often make physicians waive their due process rights in the employment contract. “The result is that the employer can terminate doctors for no reason,” he said.
In the 2013 survey of emergency physicians, 62% reported that their employers could terminate them without full due process.
Dr. Weiss, the Maryland MD-JD, said that when he advises doctors on their contracts, he generally tells them to cross out the waiver language. The applicant, he says, may also tell the employer that the waivers are considered unethical by many physician professional societies. In some cases, he said, the hospital will back down.
Conclusion
To maintain quality of care, it is essential that physicians feel free to speak out about issues that concern them. They can improve their chances of being heard by working directly with management and attending meetings, but in some cases, management may be unwilling to listen.
A version of this article first appeared on Medscape.com.
In April 2020, hospitalist Samantha Houston, MD, lost her job at Baptist Memorial Hospital–North, in Oxford, Miss., after she publicly campaigned to get donations of N95 masks for nurses. Dr. Houston filed a lawsuit against the hospital, saying she was improperly fired for speaking out. The lawsuit has not yet gone to trial.
In January 2017, emergency physician Raymond Brovont, MD, was fired by EmCare, an emergency physician staffing company, after reporting understaffing at hospitals with which it contracted in the Kansas City, Mo., area. Dr. Brovont sued EmCare, and the company lost the case. In February 2019, it was ordered to pay him $13.1 million in damages.
These are just two of several cases in recent years in which physicians have spoken out about problems involving patient care and have been sanctioned. Other physicians who see problems choose to stay silent.
Doctors often hesitate to speak out because of the prospect of losing their jobs. A 2013 study of emergency physicians found that nearly 20% reported a possible or real threat to their employment if they expressed concerns about quality of care.
When physicians do not speak openly about important medical issues, the quality of care in their institutions suffers, said a coauthor of the study, Larry D. Weiss, MD, JD, a retired professor of emergency medicine at the University of Maryland, Baltimore.
“Physicians can’t effectively represent patients if they are always thinking they can get fired for what they say,” Dr. Weiss said. “If you don’t have protections like due process, which is often the case, you are less likely to speak out.”
In the first few weeks, health care facilities were struggling to obtain personal protective equipment (PPE) and to create policies that would keep patients and caregivers safe.
Physicians such as Dr. Houston took the initiative to make sure their institutions were taking the right steps against COVID-19 and found themselves at loggerheads with administrators who were concerned that their organizations were being portrayed as unsafe.
The case of one physician who spoke out
One of the highest-profile cases of a physician speaking out and being removed from work during the pandemic is that of Ming Lin, MD, an emergency physician who lost a job he had held for 17 years at St. Joseph Medical Center, in Bellingham, Wash. Dr. Lin lost his job after he made a series of Facebook posts that criticized the hospital’s COVID-19 preparedness efforts.
In an interview, Dr. Lin discussed the details of his situation to a degree that rarely occurs in such cases. This is one of the most extensive interviews he has granted.
Postings on Facebook
Dr. Lin said that on the basis of an intense study of the virus at the onset of the pandemic, he developed many ideas as to what could be done to mitigate its spread. While working as a locum tenens physician on his time off, he could see how others dealt with COVID-19.
Dr. Lin said from past experiences he did not feel that he could present his ideas directly to administration and be heard, so he decided to air his ideas about how his hospital could handle COVID-19 on his Facebook page, which drew a large audience.
He said he was certain that hospital administrators were reading his posts. He said receptionists at this hospital were advised not to wear masks, evidently because it would alarm patients. Dr. Lin said he posted concerns about their safety and called for them to wear masks. Soon after, the hospital directed receptionists to wear masks.
Dr. Lin’s Facebook posts also criticized the hospital for taking what he felt was too long to get results on COVID-19 tests. “It was taking them up to 10 days to get test results, because samples were being sent to a lab in California,” he said. He suggested it would be faster to send samples to the University of Washington. Soon after, the hospital started sending samples there.
In just a couple of weeks, Dr. Lin said, he voiced almost a dozen concerns. Each time the hospital made changes in line with his recommendations. Although he didn’t get any direct acknowledgment from the hospital for his help, he said he felt he was making a positive impact.
How employers react to physicians who speak out
Physicians who speak out about conditions tend to deeply disturb administrators, said William P. Sullivan, DO, JD, an emergency physician and lawyer in Frankfort, Ill., who has written about physicians being terminated by hospitals.
“These physicians go to the news media or they use social media,” Dr. Sullivan said, “but hospital administrators don’t want the public to hear bad things about their hospital.”
Then the public might not come to the hospital, which is an administrator’s worst nightmare. Even if physicians think their criticisms are reasonable, administrators may still fear a resulting drop in patients.
Dr. Houston, for example, was helping her Mississippi hospital by collecting donations of N95 masks for nurses, but to administrators, it showed that the hospital did not have enough masks.
“It is not helpful to stoke fear and anxiety, even if the intent is sincere,” a spokesperson for the hospital said.
Administrator fires back
Dr. Lin’s posts were deeply concerning to Richard DeCarlo, chief operating officer of PeaceHealth, which runs St. Joseph Hospital. Mr. DeCarlo discussed his concerns in a video interview in April with the blogger Zubin Damania, MD, known as ZDoggMD.
Comments on Dr. Lin’s Facebook posts showed that people “were fearful to go to the hospital,” he told Dr. Damania. “They were concluding that they would need to drive to another hospital.”
Mr. DeCarlo said he was also unhappy that Dr. Lin did not directly contact administrators about his concerns. “He didn’t communicate with his medical director,” Mr. DeCarlo said in the interview. “The ED staff had been meeting three times a week with the chief medical officer to make sure they had everything they needed, but he only attended one of these meetings and didn’t ask any questions.”
Dr. Lin maintains he did ask questions at the first meeting but stopped attending because he felt he wasn’t being heeded. “I found their tone not very receptive,” he said.
Doctor allegedly offered “misinformation”
At the start of the pandemic, some hospitals made it clear what would happen to doctors who brought up lack of PPE or other problems to the media. For example, NYU Langone Medical Center in New York sent an email to staff warning that speaking to the media without permission “will be subject to disciplinary action, including termination.”
PeaceHealth took a different tack. “It’s not that we have a policy that says don’t ever talk to the media,” Mr. DeCarlo said in the ZDoggMD interview, but in Dr. Lin’s case, “what was at issue was the misinformation. His leader went to him and said, ‘Look, you’re posting things that aren’t accurate.’ ”
Dr. Lin disputes that he provided any misinformation. In the interview, Mr. DeCarlo cited just one example of alleged misinformation. He said Dr. Lin called for a tent outside the emergency department (ED) to protect patients entering the department from aerosol exposure to COVID-19. Mr. DeCarlo said the tent was not needed because fewer people were using the ED.
“To put it in an extreme way,” Mr. DeCarlo said of Dr. Lin’s posts, “it was like yelling fire in a theater where there is not a fire.”
Dr. Lin said the hospital did briefly erect a tent and then removed it, and he still insisted that a tent was a good idea. He added that Mr. DeCarlo never mentioned any of the other suggestions Dr. Lin made, nor did he state that the hospital adopted them.
Doctor gets a warning
Dr. Lin said that after he started posting his concerns, he got a call from the emergency department director who worked for TeamHealth, an emergency medicine staffing firm that contracted with PeaceHealth and employed Dr. Lin, too.
Dr. Lin said his immediate supervisor at TeamHealth told him the hospital was unhappy with his posts and that he should take them down and suggested he might be fired. Dr. Lin said the supervisor also asked him to apologize to the hospital administration for these posts, but he refused to do so.
“Retracting and apologizing was not only wrong but would have left me vulnerable to being terminated with no repercussions,” he said.
“At that point, I realized I had crossed the Rubicon,” Dr. Lin said. He thought he might well be fired, no matter what he did, so he took his story to The Seattle Times, which had a much wider platform than his Facebook page had.
Dr. Lin lost his job at St. Joseph a week after The Seattle Times story about him appeared. “About 10 minutes before my shift was supposed to start, I received a text message from TeamHealth saying that someone else would be taking the shift,” he said.
In a release, TeamHealth insisted Dr. Lin was not fired and that he was scheduled to be reassigned to work at other hospitals. Dr. Lin, however, said he was not told this at the time and that he found out later that the new assignment would involve a pay cut and a significant commute. He said he has not taken any new assignments from TeamHealth since he lost his job at St. Joseph.
Dr. Lin has filed a lawsuit against PeaceHealth, TeamHealth, and Mr. DeCarlo, asking for his job back and for an apology. He said he has not asked for any financial damages at this point.
Since leaving St. Joseph, Dr. Lin has been working as an administrator for the Indian Health Service in the upper plains states. He said he can do some of the work at home in Washington State, which allows him to be with his wife and three young children.
Dr. Lin no longer sees patients. “I feel I have lost my confidence as a clinician,” he said. “I’m not sure why, but I find it hard to make quick judgments when taking care of patients.”
He said many doctors have told him about their own troubles with speaking out, but they did not want to come forward and talk about it because they feared more repercussions.
Do doctors who speak out have any rights?
Because TeamHealth, Dr. Lin’s actual employer, asserts he was never actually terminated, Dr. Lin has not been able to appeal his case internally in accordance with due process, an option that allows doctors to get a fair hearing and to appeal decisions against them.
The American Academy of Emergency Medicine pointed out this problem. “Dr. Lin, as a member of the medical staff, is entitled to full due process and a fair hearing from his peers on the medical staff,” the academy said in a statement supporting him.
The Joint Commission, the hospital accreditor, requires that hospitals provide due process to doctors before they can be terminated. However, Dr. Sullivan said employers often make physicians waive their due process rights in the employment contract. “The result is that the employer can terminate doctors for no reason,” he said.
In the 2013 survey of emergency physicians, 62% reported that their employers could terminate them without full due process.
Dr. Weiss, the Maryland MD-JD, said that when he advises doctors on their contracts, he generally tells them to cross out the waiver language. The applicant, he says, may also tell the employer that the waivers are considered unethical by many physician professional societies. In some cases, he said, the hospital will back down.
Conclusion
To maintain quality of care, it is essential that physicians feel free to speak out about issues that concern them. They can improve their chances of being heard by working directly with management and attending meetings, but in some cases, management may be unwilling to listen.
A version of this article first appeared on Medscape.com.
In April 2020, hospitalist Samantha Houston, MD, lost her job at Baptist Memorial Hospital–North, in Oxford, Miss., after she publicly campaigned to get donations of N95 masks for nurses. Dr. Houston filed a lawsuit against the hospital, saying she was improperly fired for speaking out. The lawsuit has not yet gone to trial.
In January 2017, emergency physician Raymond Brovont, MD, was fired by EmCare, an emergency physician staffing company, after reporting understaffing at hospitals with which it contracted in the Kansas City, Mo., area. Dr. Brovont sued EmCare, and the company lost the case. In February 2019, it was ordered to pay him $13.1 million in damages.
These are just two of several cases in recent years in which physicians have spoken out about problems involving patient care and have been sanctioned. Other physicians who see problems choose to stay silent.
Doctors often hesitate to speak out because of the prospect of losing their jobs. A 2013 study of emergency physicians found that nearly 20% reported a possible or real threat to their employment if they expressed concerns about quality of care.
When physicians do not speak openly about important medical issues, the quality of care in their institutions suffers, said a coauthor of the study, Larry D. Weiss, MD, JD, a retired professor of emergency medicine at the University of Maryland, Baltimore.
“Physicians can’t effectively represent patients if they are always thinking they can get fired for what they say,” Dr. Weiss said. “If you don’t have protections like due process, which is often the case, you are less likely to speak out.”
In the first few weeks, health care facilities were struggling to obtain personal protective equipment (PPE) and to create policies that would keep patients and caregivers safe.
Physicians such as Dr. Houston took the initiative to make sure their institutions were taking the right steps against COVID-19 and found themselves at loggerheads with administrators who were concerned that their organizations were being portrayed as unsafe.
The case of one physician who spoke out
One of the highest-profile cases of a physician speaking out and being removed from work during the pandemic is that of Ming Lin, MD, an emergency physician who lost a job he had held for 17 years at St. Joseph Medical Center, in Bellingham, Wash. Dr. Lin lost his job after he made a series of Facebook posts that criticized the hospital’s COVID-19 preparedness efforts.
In an interview, Dr. Lin discussed the details of his situation to a degree that rarely occurs in such cases. This is one of the most extensive interviews he has granted.
Postings on Facebook
Dr. Lin said that on the basis of an intense study of the virus at the onset of the pandemic, he developed many ideas as to what could be done to mitigate its spread. While working as a locum tenens physician on his time off, he could see how others dealt with COVID-19.
Dr. Lin said from past experiences he did not feel that he could present his ideas directly to administration and be heard, so he decided to air his ideas about how his hospital could handle COVID-19 on his Facebook page, which drew a large audience.
He said he was certain that hospital administrators were reading his posts. He said receptionists at this hospital were advised not to wear masks, evidently because it would alarm patients. Dr. Lin said he posted concerns about their safety and called for them to wear masks. Soon after, the hospital directed receptionists to wear masks.
Dr. Lin’s Facebook posts also criticized the hospital for taking what he felt was too long to get results on COVID-19 tests. “It was taking them up to 10 days to get test results, because samples were being sent to a lab in California,” he said. He suggested it would be faster to send samples to the University of Washington. Soon after, the hospital started sending samples there.
In just a couple of weeks, Dr. Lin said, he voiced almost a dozen concerns. Each time the hospital made changes in line with his recommendations. Although he didn’t get any direct acknowledgment from the hospital for his help, he said he felt he was making a positive impact.
How employers react to physicians who speak out
Physicians who speak out about conditions tend to deeply disturb administrators, said William P. Sullivan, DO, JD, an emergency physician and lawyer in Frankfort, Ill., who has written about physicians being terminated by hospitals.
“These physicians go to the news media or they use social media,” Dr. Sullivan said, “but hospital administrators don’t want the public to hear bad things about their hospital.”
Then the public might not come to the hospital, which is an administrator’s worst nightmare. Even if physicians think their criticisms are reasonable, administrators may still fear a resulting drop in patients.
Dr. Houston, for example, was helping her Mississippi hospital by collecting donations of N95 masks for nurses, but to administrators, it showed that the hospital did not have enough masks.
“It is not helpful to stoke fear and anxiety, even if the intent is sincere,” a spokesperson for the hospital said.
Administrator fires back
Dr. Lin’s posts were deeply concerning to Richard DeCarlo, chief operating officer of PeaceHealth, which runs St. Joseph Hospital. Mr. DeCarlo discussed his concerns in a video interview in April with the blogger Zubin Damania, MD, known as ZDoggMD.
Comments on Dr. Lin’s Facebook posts showed that people “were fearful to go to the hospital,” he told Dr. Damania. “They were concluding that they would need to drive to another hospital.”
Mr. DeCarlo said he was also unhappy that Dr. Lin did not directly contact administrators about his concerns. “He didn’t communicate with his medical director,” Mr. DeCarlo said in the interview. “The ED staff had been meeting three times a week with the chief medical officer to make sure they had everything they needed, but he only attended one of these meetings and didn’t ask any questions.”
Dr. Lin maintains he did ask questions at the first meeting but stopped attending because he felt he wasn’t being heeded. “I found their tone not very receptive,” he said.
Doctor allegedly offered “misinformation”
At the start of the pandemic, some hospitals made it clear what would happen to doctors who brought up lack of PPE or other problems to the media. For example, NYU Langone Medical Center in New York sent an email to staff warning that speaking to the media without permission “will be subject to disciplinary action, including termination.”
PeaceHealth took a different tack. “It’s not that we have a policy that says don’t ever talk to the media,” Mr. DeCarlo said in the ZDoggMD interview, but in Dr. Lin’s case, “what was at issue was the misinformation. His leader went to him and said, ‘Look, you’re posting things that aren’t accurate.’ ”
Dr. Lin disputes that he provided any misinformation. In the interview, Mr. DeCarlo cited just one example of alleged misinformation. He said Dr. Lin called for a tent outside the emergency department (ED) to protect patients entering the department from aerosol exposure to COVID-19. Mr. DeCarlo said the tent was not needed because fewer people were using the ED.
“To put it in an extreme way,” Mr. DeCarlo said of Dr. Lin’s posts, “it was like yelling fire in a theater where there is not a fire.”
Dr. Lin said the hospital did briefly erect a tent and then removed it, and he still insisted that a tent was a good idea. He added that Mr. DeCarlo never mentioned any of the other suggestions Dr. Lin made, nor did he state that the hospital adopted them.
Doctor gets a warning
Dr. Lin said that after he started posting his concerns, he got a call from the emergency department director who worked for TeamHealth, an emergency medicine staffing firm that contracted with PeaceHealth and employed Dr. Lin, too.
Dr. Lin said his immediate supervisor at TeamHealth told him the hospital was unhappy with his posts and that he should take them down and suggested he might be fired. Dr. Lin said the supervisor also asked him to apologize to the hospital administration for these posts, but he refused to do so.
“Retracting and apologizing was not only wrong but would have left me vulnerable to being terminated with no repercussions,” he said.
“At that point, I realized I had crossed the Rubicon,” Dr. Lin said. He thought he might well be fired, no matter what he did, so he took his story to The Seattle Times, which had a much wider platform than his Facebook page had.
Dr. Lin lost his job at St. Joseph a week after The Seattle Times story about him appeared. “About 10 minutes before my shift was supposed to start, I received a text message from TeamHealth saying that someone else would be taking the shift,” he said.
In a release, TeamHealth insisted Dr. Lin was not fired and that he was scheduled to be reassigned to work at other hospitals. Dr. Lin, however, said he was not told this at the time and that he found out later that the new assignment would involve a pay cut and a significant commute. He said he has not taken any new assignments from TeamHealth since he lost his job at St. Joseph.
Dr. Lin has filed a lawsuit against PeaceHealth, TeamHealth, and Mr. DeCarlo, asking for his job back and for an apology. He said he has not asked for any financial damages at this point.
Since leaving St. Joseph, Dr. Lin has been working as an administrator for the Indian Health Service in the upper plains states. He said he can do some of the work at home in Washington State, which allows him to be with his wife and three young children.
Dr. Lin no longer sees patients. “I feel I have lost my confidence as a clinician,” he said. “I’m not sure why, but I find it hard to make quick judgments when taking care of patients.”
He said many doctors have told him about their own troubles with speaking out, but they did not want to come forward and talk about it because they feared more repercussions.
Do doctors who speak out have any rights?
Because TeamHealth, Dr. Lin’s actual employer, asserts he was never actually terminated, Dr. Lin has not been able to appeal his case internally in accordance with due process, an option that allows doctors to get a fair hearing and to appeal decisions against them.
The American Academy of Emergency Medicine pointed out this problem. “Dr. Lin, as a member of the medical staff, is entitled to full due process and a fair hearing from his peers on the medical staff,” the academy said in a statement supporting him.
The Joint Commission, the hospital accreditor, requires that hospitals provide due process to doctors before they can be terminated. However, Dr. Sullivan said employers often make physicians waive their due process rights in the employment contract. “The result is that the employer can terminate doctors for no reason,” he said.
In the 2013 survey of emergency physicians, 62% reported that their employers could terminate them without full due process.
Dr. Weiss, the Maryland MD-JD, said that when he advises doctors on their contracts, he generally tells them to cross out the waiver language. The applicant, he says, may also tell the employer that the waivers are considered unethical by many physician professional societies. In some cases, he said, the hospital will back down.
Conclusion
To maintain quality of care, it is essential that physicians feel free to speak out about issues that concern them. They can improve their chances of being heard by working directly with management and attending meetings, but in some cases, management may be unwilling to listen.
A version of this article first appeared on Medscape.com.
What COVID did to MD income in 2020
, according to the Medscape Physician Compensation Report 2021: The Recovery Begins.
Almost 18,000 physicians in more than 29 specialties told Medscape about their income, hours worked, greatest challenges, and the unexpected impact of COVID-19 on their compensation.
How many physicians avoided massive losses
When the pandemic started around March 2020, “a great many physicians saw reductions in volume at first,” says Robert Pearl, MD, former CEO of the Permanente Medical Group and a professor at Stanford (Calif.) University.
Medscape’s survey report shows that a staggering 44% saw a 1%-25% reduction in patient volume, and 9% saw a 26%-50% decline. “That is indeed breathtaking,” Dr. Pearl says.
Several key factors saved many practices from hemorrhaging money, says Michael Belkin, JD, divisional vice president at Merritt Hawkins and Associates in Dallas. “Many physicians used the federal Paycheck Protection Program [PPP] to help keep themselves afloat,” he says. “A large percentage reduced their staff, which reduced their expenses, and many got some of their volume back by transitioning to telemedicine.”
In a 2020 survey for the Physicians Foundation, conducted by Merritt Hawkins, 48% of physicians said their practice had received PPP support, and most of those said the support was enough to allow them to stay open without reducing staff. Only 6% of practices that received PPP support did not stay open.
Telemedicine helped many practices
Early in the pandemic, Medicare reimbursements for telemedicine were equal with those for face-to-face visits. “Since telemedicine takes a third less time than an inpatient visit, doctors could see more patients,” Dr. Pearl says.
The switch was almost instantaneous in some practices. Within 3 days, a 200-provider multispecialty practice in Wilmington, N.C., went from not using telehealth to its being used by all physicians, the Medical Group Management Association reported. By late April, the practice was already back up to about 70% of normal overall production.
However, telemedicine could not help every specialty equally. “Generally, allergists can’t do their allergy testing virtually, and patients with mild problems probably put off visits,” Dr. Pearl says. Allergists experienced a large percentage decline in compensation, according to Medscape’s survey. For some, income fell from $301,000 the prior year to $274,000 this year.
Primary care struggled
Primary care physicians posted lower compensation than they did the prior year, but most rebounded to some degree. A study released in June 2020 projected that, even with telemedicine, primary care physicians would lose an average of $67,774 for the year.
However, Medscape’s survey found that internists’ average compensation declined from $251,000 in the prior year to $248,000, and average family physicians’ compensation actually rose from $234,000.
Pediatricians had a harder slog. Their average compensation sank from $232,000 to $221,000, according to the report. Even with telemedicine, parents of young children were not contacting the doctor. In May 2020, visits by children aged 3-5 years were down by 56%.
Many proceduralists recovered
Procedure-oriented specialties were particularly hard-hit at first, because many hospitals and some states banned all elective surgeries at the beginning of the pandemic.
“In March and April, ophthalmology practices were virtually at a standstill,” says John B. Pinto, an ophthalmology practice management consultant in San Diego. “But by the fourth quarter, operations were back to normal. Practices were fully open, and patients were coming back in.”
Medscape’s survey shows that, by year’s end, compensation was about the same as the year before for orthopedic surgeons ($511,000 in both the 2020 and 2021 reports); cardiologists actually did better ($438,000 in our 2020 report and $459,000 in 2021); and ophthalmologists’ compensation was about the same ($378,000 in our prior report and $379,000 in 2021).
Some other proceduralists, however, did not do as well. Otolaryngologists’ compensation fell to $417,000, the second-biggest percentage drop. “This may be because otolaryngologists’ chief procedures are tonsillectomies, sinus surgery, and nasal surgery, which can be put off,” Dr. Pearl says.
Anesthesiologists, who depend on surgical volume, also did not earn as much in 2020. Their compensation declined from $398,000 in our 2020 report to $378,000 in Medscape’s 2021 report.
“Not only has 70% of our revenue disappeared, but our physicians are still working every day,” an independent anesthesiology practice in Alabama told the MGMA early in the pandemic.
Plastic surgeons now the top earners
The biggest increase in compensation by far was made by plastic surgeons, whose income rose 9.8% over the year before, to $526,000. This put them at the top of the list
Dr. Pearl adds that plastic surgeons can perform their procedures in their offices, rather than in a hospital, where elective surgeries were often canceled.
Mr. Belkin says specialties other than plastic surgery had been offering more boutique cosmetic care even before the pandemic. In 2020, nonsurgical cosmetic procedures such as neurotoxin therapy, dermal filler procedures, chemical peels, and hair removal earned $3.1 billion in revenue, according to a survey by the Aesthetic Society.
Other specialties that earned more even during COVID
In Medscape’s survey, several specialties actually earned more during the pandemic than in 2019. Some specialties, such as critical care and public health, were integral in managing COVID patients and the pandemic.
However, some specialties involved in COVID care did not see an increase. Compensation for infectious disease specialists (at $245,000) and emergency medicine specialists (at $354,000) remained basically unchanged from the prior year, and for pulmonologists, it was slightly down.
Emergency departments reported decreases in volume of 40% or more early in the pandemic, according to the American College of Emergency Physicians. It was reported that patients were avoiding EDs for fear of contracting COVID, and car accidents were down because people ventured out less.
In this year’s report, psychiatrists saw a modest rise in compensation, to $275,000. “There has been an increase in mental health visits in the pandemic,” Dr. Pearl says. In 2020, about 4 in 10 adults in the United States reported symptoms of anxiety or depressive disorder, up from 1 in 10 adults the prior year. In addition, psychiatrists were third on the list of Merritt Hawkins’ most requested recruiting engagements.
Oncologists saw a rise in compensation, from $377,000 to $403,000. “Volume likely did not fall because cancer patients would go through with their chemotherapy in spite of the pandemic,” Dr. Pearl says. “The increase in income might have to do with the usual inflation in the cost of chemotherapy drugs.” Dr. Pinto saw the same trend for retinal surgeons, whose care also cannot be delayed.
Medscape’s survey also reports increases in compensation for rheumatologists, endocrinologists, and neurologists, but it reports small declines among dermatologists, radiologists, and gastroenterologists.
Gender-based pay gap remains in place
The gender-based pay gap in this year’s report is similar to that seen in Medscape’s report for the prior year. Men earned 27% more than women in 2021, compared with 25% more the year before. Some physicians commented that more women physicians maintained flexible or shorter work schedules to help with children who could not go into school.
“Having to be a full-time physician, full-time mom, and full-time teacher during our surge was unbelievable,” a primary care pediatrician in group practice and mother of two reported in November. “I felt pulled in all directions and didn’t do anything well.”
In addition, “men dominate some specialties that seem to have seen a smaller drop in volume in the pandemic, such as emergency medicine, infectious disease, pulmonology, and oncology,” says Halee Fischer-Wright, MD, CEO of MGMA.
Employed physicians shared their employers’ pain
Employed physicians, who typically work at hospitals, shared the financial pains of their institutions, particularly in the early stages of the pandemic. In April, hospital admissions were 34.1% below prepandemic levels, according to a study published in Health Affairs. That figure had risen by June, but it was still 8.3% below prepandemic volume.
By the end of the year, many hospitals and hospital systems were in the black, thanks in large part to generous federal subsidies, but actual operations still lost money for the year. Altogether, 42% of them posted an operational loss in 2020, up from the 23% in 2019, according to a survey by Moody’s Investors Service.
Medscape’s report shows that many employed physicians lost pay in 2020, and for many, pay had not returned to pre-COVID levels. Only 28% of primary care physicians and 32% of specialists who lost pay have seen it restored, according to the report. In addition, 15% of surveyed physicians did not receive an annual raise.
Many employed doctors are paid on the basis of relative value units (RVUs), which is a measure of the value of their work. In many cases, there was not enough work to reach RVU thresholds. Would hospitals and other employers lower RVU targets to meet the problem? “I haven’t seen our clients make concessions to providers along those lines,” Mr. Belkin says.
Physicians had to work longer hours
The Medscape report also found that in 2020, physicians saw fewer patients because each visit took longer.
“With the threat of COVID, in-person visits take more time than before,” Mr. Belkin says. “Physicians and staff have to prepare the exam room after each visit, and doctors must spend more time answering patients’ questions about COVID.”
“The new protocols to keep everyone safe add time between patients, and physicians have to answer patients’ questions about the pandemic and vaccines,” Dr. Fischer-Wright says. “You might see a 20% increase in time spent just on these non–revenue-generating COVID activities.”
Physicians still like their specialty
Although 2020 was a challenging year for physicians, the percentage of those who were satisfied with their specialty choice generally did not slip from the year before. It actually rose for several specialties – most notably, rheumatology, pulmonology, physical medicine and rehabilitation, and nephrology.
One specialty saw a decline in satisfaction with their specialty choice, and that was public health and preventive medicine, which plummeted 16 percentage points to 67% – putting it at the bottom of the list.
Even before the pandemic, many public health departments were chronically underfunded. This problem was possibly exacerbated by the pressures to keep up with COVID reporting and testing responsibilities.
Conclusion
Although 2020 was a wild ride for many physicians, many came out of it with only minor reductions in overall compensation, and some saw increases. Still, some specialties and many individuals experienced terrible financial stress and had to make changes in their lives and their spending in order to stay afloat.
“The biggest inhibitor to getting back to normal had to do with doctors who did not want to return because they did not want to risk getting COVID,” Dr. Pinto reports. But he notes that by February 2021 most doctors were completely vaccinated and could feel safe again.
A version of this article first appeared on Medscape.com.
, according to the Medscape Physician Compensation Report 2021: The Recovery Begins.
Almost 18,000 physicians in more than 29 specialties told Medscape about their income, hours worked, greatest challenges, and the unexpected impact of COVID-19 on their compensation.
How many physicians avoided massive losses
When the pandemic started around March 2020, “a great many physicians saw reductions in volume at first,” says Robert Pearl, MD, former CEO of the Permanente Medical Group and a professor at Stanford (Calif.) University.
Medscape’s survey report shows that a staggering 44% saw a 1%-25% reduction in patient volume, and 9% saw a 26%-50% decline. “That is indeed breathtaking,” Dr. Pearl says.
Several key factors saved many practices from hemorrhaging money, says Michael Belkin, JD, divisional vice president at Merritt Hawkins and Associates in Dallas. “Many physicians used the federal Paycheck Protection Program [PPP] to help keep themselves afloat,” he says. “A large percentage reduced their staff, which reduced their expenses, and many got some of their volume back by transitioning to telemedicine.”
In a 2020 survey for the Physicians Foundation, conducted by Merritt Hawkins, 48% of physicians said their practice had received PPP support, and most of those said the support was enough to allow them to stay open without reducing staff. Only 6% of practices that received PPP support did not stay open.
Telemedicine helped many practices
Early in the pandemic, Medicare reimbursements for telemedicine were equal with those for face-to-face visits. “Since telemedicine takes a third less time than an inpatient visit, doctors could see more patients,” Dr. Pearl says.
The switch was almost instantaneous in some practices. Within 3 days, a 200-provider multispecialty practice in Wilmington, N.C., went from not using telehealth to its being used by all physicians, the Medical Group Management Association reported. By late April, the practice was already back up to about 70% of normal overall production.
However, telemedicine could not help every specialty equally. “Generally, allergists can’t do their allergy testing virtually, and patients with mild problems probably put off visits,” Dr. Pearl says. Allergists experienced a large percentage decline in compensation, according to Medscape’s survey. For some, income fell from $301,000 the prior year to $274,000 this year.
Primary care struggled
Primary care physicians posted lower compensation than they did the prior year, but most rebounded to some degree. A study released in June 2020 projected that, even with telemedicine, primary care physicians would lose an average of $67,774 for the year.
However, Medscape’s survey found that internists’ average compensation declined from $251,000 in the prior year to $248,000, and average family physicians’ compensation actually rose from $234,000.
Pediatricians had a harder slog. Their average compensation sank from $232,000 to $221,000, according to the report. Even with telemedicine, parents of young children were not contacting the doctor. In May 2020, visits by children aged 3-5 years were down by 56%.
Many proceduralists recovered
Procedure-oriented specialties were particularly hard-hit at first, because many hospitals and some states banned all elective surgeries at the beginning of the pandemic.
“In March and April, ophthalmology practices were virtually at a standstill,” says John B. Pinto, an ophthalmology practice management consultant in San Diego. “But by the fourth quarter, operations were back to normal. Practices were fully open, and patients were coming back in.”
Medscape’s survey shows that, by year’s end, compensation was about the same as the year before for orthopedic surgeons ($511,000 in both the 2020 and 2021 reports); cardiologists actually did better ($438,000 in our 2020 report and $459,000 in 2021); and ophthalmologists’ compensation was about the same ($378,000 in our prior report and $379,000 in 2021).
Some other proceduralists, however, did not do as well. Otolaryngologists’ compensation fell to $417,000, the second-biggest percentage drop. “This may be because otolaryngologists’ chief procedures are tonsillectomies, sinus surgery, and nasal surgery, which can be put off,” Dr. Pearl says.
Anesthesiologists, who depend on surgical volume, also did not earn as much in 2020. Their compensation declined from $398,000 in our 2020 report to $378,000 in Medscape’s 2021 report.
“Not only has 70% of our revenue disappeared, but our physicians are still working every day,” an independent anesthesiology practice in Alabama told the MGMA early in the pandemic.
Plastic surgeons now the top earners
The biggest increase in compensation by far was made by plastic surgeons, whose income rose 9.8% over the year before, to $526,000. This put them at the top of the list
Dr. Pearl adds that plastic surgeons can perform their procedures in their offices, rather than in a hospital, where elective surgeries were often canceled.
Mr. Belkin says specialties other than plastic surgery had been offering more boutique cosmetic care even before the pandemic. In 2020, nonsurgical cosmetic procedures such as neurotoxin therapy, dermal filler procedures, chemical peels, and hair removal earned $3.1 billion in revenue, according to a survey by the Aesthetic Society.
Other specialties that earned more even during COVID
In Medscape’s survey, several specialties actually earned more during the pandemic than in 2019. Some specialties, such as critical care and public health, were integral in managing COVID patients and the pandemic.
However, some specialties involved in COVID care did not see an increase. Compensation for infectious disease specialists (at $245,000) and emergency medicine specialists (at $354,000) remained basically unchanged from the prior year, and for pulmonologists, it was slightly down.
Emergency departments reported decreases in volume of 40% or more early in the pandemic, according to the American College of Emergency Physicians. It was reported that patients were avoiding EDs for fear of contracting COVID, and car accidents were down because people ventured out less.
In this year’s report, psychiatrists saw a modest rise in compensation, to $275,000. “There has been an increase in mental health visits in the pandemic,” Dr. Pearl says. In 2020, about 4 in 10 adults in the United States reported symptoms of anxiety or depressive disorder, up from 1 in 10 adults the prior year. In addition, psychiatrists were third on the list of Merritt Hawkins’ most requested recruiting engagements.
Oncologists saw a rise in compensation, from $377,000 to $403,000. “Volume likely did not fall because cancer patients would go through with their chemotherapy in spite of the pandemic,” Dr. Pearl says. “The increase in income might have to do with the usual inflation in the cost of chemotherapy drugs.” Dr. Pinto saw the same trend for retinal surgeons, whose care also cannot be delayed.
Medscape’s survey also reports increases in compensation for rheumatologists, endocrinologists, and neurologists, but it reports small declines among dermatologists, radiologists, and gastroenterologists.
Gender-based pay gap remains in place
The gender-based pay gap in this year’s report is similar to that seen in Medscape’s report for the prior year. Men earned 27% more than women in 2021, compared with 25% more the year before. Some physicians commented that more women physicians maintained flexible or shorter work schedules to help with children who could not go into school.
“Having to be a full-time physician, full-time mom, and full-time teacher during our surge was unbelievable,” a primary care pediatrician in group practice and mother of two reported in November. “I felt pulled in all directions and didn’t do anything well.”
In addition, “men dominate some specialties that seem to have seen a smaller drop in volume in the pandemic, such as emergency medicine, infectious disease, pulmonology, and oncology,” says Halee Fischer-Wright, MD, CEO of MGMA.
Employed physicians shared their employers’ pain
Employed physicians, who typically work at hospitals, shared the financial pains of their institutions, particularly in the early stages of the pandemic. In April, hospital admissions were 34.1% below prepandemic levels, according to a study published in Health Affairs. That figure had risen by June, but it was still 8.3% below prepandemic volume.
By the end of the year, many hospitals and hospital systems were in the black, thanks in large part to generous federal subsidies, but actual operations still lost money for the year. Altogether, 42% of them posted an operational loss in 2020, up from the 23% in 2019, according to a survey by Moody’s Investors Service.
Medscape’s report shows that many employed physicians lost pay in 2020, and for many, pay had not returned to pre-COVID levels. Only 28% of primary care physicians and 32% of specialists who lost pay have seen it restored, according to the report. In addition, 15% of surveyed physicians did not receive an annual raise.
Many employed doctors are paid on the basis of relative value units (RVUs), which is a measure of the value of their work. In many cases, there was not enough work to reach RVU thresholds. Would hospitals and other employers lower RVU targets to meet the problem? “I haven’t seen our clients make concessions to providers along those lines,” Mr. Belkin says.
Physicians had to work longer hours
The Medscape report also found that in 2020, physicians saw fewer patients because each visit took longer.
“With the threat of COVID, in-person visits take more time than before,” Mr. Belkin says. “Physicians and staff have to prepare the exam room after each visit, and doctors must spend more time answering patients’ questions about COVID.”
“The new protocols to keep everyone safe add time between patients, and physicians have to answer patients’ questions about the pandemic and vaccines,” Dr. Fischer-Wright says. “You might see a 20% increase in time spent just on these non–revenue-generating COVID activities.”
Physicians still like their specialty
Although 2020 was a challenging year for physicians, the percentage of those who were satisfied with their specialty choice generally did not slip from the year before. It actually rose for several specialties – most notably, rheumatology, pulmonology, physical medicine and rehabilitation, and nephrology.
One specialty saw a decline in satisfaction with their specialty choice, and that was public health and preventive medicine, which plummeted 16 percentage points to 67% – putting it at the bottom of the list.
Even before the pandemic, many public health departments were chronically underfunded. This problem was possibly exacerbated by the pressures to keep up with COVID reporting and testing responsibilities.
Conclusion
Although 2020 was a wild ride for many physicians, many came out of it with only minor reductions in overall compensation, and some saw increases. Still, some specialties and many individuals experienced terrible financial stress and had to make changes in their lives and their spending in order to stay afloat.
“The biggest inhibitor to getting back to normal had to do with doctors who did not want to return because they did not want to risk getting COVID,” Dr. Pinto reports. But he notes that by February 2021 most doctors were completely vaccinated and could feel safe again.
A version of this article first appeared on Medscape.com.
, according to the Medscape Physician Compensation Report 2021: The Recovery Begins.
Almost 18,000 physicians in more than 29 specialties told Medscape about their income, hours worked, greatest challenges, and the unexpected impact of COVID-19 on their compensation.
How many physicians avoided massive losses
When the pandemic started around March 2020, “a great many physicians saw reductions in volume at first,” says Robert Pearl, MD, former CEO of the Permanente Medical Group and a professor at Stanford (Calif.) University.
Medscape’s survey report shows that a staggering 44% saw a 1%-25% reduction in patient volume, and 9% saw a 26%-50% decline. “That is indeed breathtaking,” Dr. Pearl says.
Several key factors saved many practices from hemorrhaging money, says Michael Belkin, JD, divisional vice president at Merritt Hawkins and Associates in Dallas. “Many physicians used the federal Paycheck Protection Program [PPP] to help keep themselves afloat,” he says. “A large percentage reduced their staff, which reduced their expenses, and many got some of their volume back by transitioning to telemedicine.”
In a 2020 survey for the Physicians Foundation, conducted by Merritt Hawkins, 48% of physicians said their practice had received PPP support, and most of those said the support was enough to allow them to stay open without reducing staff. Only 6% of practices that received PPP support did not stay open.
Telemedicine helped many practices
Early in the pandemic, Medicare reimbursements for telemedicine were equal with those for face-to-face visits. “Since telemedicine takes a third less time than an inpatient visit, doctors could see more patients,” Dr. Pearl says.
The switch was almost instantaneous in some practices. Within 3 days, a 200-provider multispecialty practice in Wilmington, N.C., went from not using telehealth to its being used by all physicians, the Medical Group Management Association reported. By late April, the practice was already back up to about 70% of normal overall production.
However, telemedicine could not help every specialty equally. “Generally, allergists can’t do their allergy testing virtually, and patients with mild problems probably put off visits,” Dr. Pearl says. Allergists experienced a large percentage decline in compensation, according to Medscape’s survey. For some, income fell from $301,000 the prior year to $274,000 this year.
Primary care struggled
Primary care physicians posted lower compensation than they did the prior year, but most rebounded to some degree. A study released in June 2020 projected that, even with telemedicine, primary care physicians would lose an average of $67,774 for the year.
However, Medscape’s survey found that internists’ average compensation declined from $251,000 in the prior year to $248,000, and average family physicians’ compensation actually rose from $234,000.
Pediatricians had a harder slog. Their average compensation sank from $232,000 to $221,000, according to the report. Even with telemedicine, parents of young children were not contacting the doctor. In May 2020, visits by children aged 3-5 years were down by 56%.
Many proceduralists recovered
Procedure-oriented specialties were particularly hard-hit at first, because many hospitals and some states banned all elective surgeries at the beginning of the pandemic.
“In March and April, ophthalmology practices were virtually at a standstill,” says John B. Pinto, an ophthalmology practice management consultant in San Diego. “But by the fourth quarter, operations were back to normal. Practices were fully open, and patients were coming back in.”
Medscape’s survey shows that, by year’s end, compensation was about the same as the year before for orthopedic surgeons ($511,000 in both the 2020 and 2021 reports); cardiologists actually did better ($438,000 in our 2020 report and $459,000 in 2021); and ophthalmologists’ compensation was about the same ($378,000 in our prior report and $379,000 in 2021).
Some other proceduralists, however, did not do as well. Otolaryngologists’ compensation fell to $417,000, the second-biggest percentage drop. “This may be because otolaryngologists’ chief procedures are tonsillectomies, sinus surgery, and nasal surgery, which can be put off,” Dr. Pearl says.
Anesthesiologists, who depend on surgical volume, also did not earn as much in 2020. Their compensation declined from $398,000 in our 2020 report to $378,000 in Medscape’s 2021 report.
“Not only has 70% of our revenue disappeared, but our physicians are still working every day,” an independent anesthesiology practice in Alabama told the MGMA early in the pandemic.
Plastic surgeons now the top earners
The biggest increase in compensation by far was made by plastic surgeons, whose income rose 9.8% over the year before, to $526,000. This put them at the top of the list
Dr. Pearl adds that plastic surgeons can perform their procedures in their offices, rather than in a hospital, where elective surgeries were often canceled.
Mr. Belkin says specialties other than plastic surgery had been offering more boutique cosmetic care even before the pandemic. In 2020, nonsurgical cosmetic procedures such as neurotoxin therapy, dermal filler procedures, chemical peels, and hair removal earned $3.1 billion in revenue, according to a survey by the Aesthetic Society.
Other specialties that earned more even during COVID
In Medscape’s survey, several specialties actually earned more during the pandemic than in 2019. Some specialties, such as critical care and public health, were integral in managing COVID patients and the pandemic.
However, some specialties involved in COVID care did not see an increase. Compensation for infectious disease specialists (at $245,000) and emergency medicine specialists (at $354,000) remained basically unchanged from the prior year, and for pulmonologists, it was slightly down.
Emergency departments reported decreases in volume of 40% or more early in the pandemic, according to the American College of Emergency Physicians. It was reported that patients were avoiding EDs for fear of contracting COVID, and car accidents were down because people ventured out less.
In this year’s report, psychiatrists saw a modest rise in compensation, to $275,000. “There has been an increase in mental health visits in the pandemic,” Dr. Pearl says. In 2020, about 4 in 10 adults in the United States reported symptoms of anxiety or depressive disorder, up from 1 in 10 adults the prior year. In addition, psychiatrists were third on the list of Merritt Hawkins’ most requested recruiting engagements.
Oncologists saw a rise in compensation, from $377,000 to $403,000. “Volume likely did not fall because cancer patients would go through with their chemotherapy in spite of the pandemic,” Dr. Pearl says. “The increase in income might have to do with the usual inflation in the cost of chemotherapy drugs.” Dr. Pinto saw the same trend for retinal surgeons, whose care also cannot be delayed.
Medscape’s survey also reports increases in compensation for rheumatologists, endocrinologists, and neurologists, but it reports small declines among dermatologists, radiologists, and gastroenterologists.
Gender-based pay gap remains in place
The gender-based pay gap in this year’s report is similar to that seen in Medscape’s report for the prior year. Men earned 27% more than women in 2021, compared with 25% more the year before. Some physicians commented that more women physicians maintained flexible or shorter work schedules to help with children who could not go into school.
“Having to be a full-time physician, full-time mom, and full-time teacher during our surge was unbelievable,” a primary care pediatrician in group practice and mother of two reported in November. “I felt pulled in all directions and didn’t do anything well.”
In addition, “men dominate some specialties that seem to have seen a smaller drop in volume in the pandemic, such as emergency medicine, infectious disease, pulmonology, and oncology,” says Halee Fischer-Wright, MD, CEO of MGMA.
Employed physicians shared their employers’ pain
Employed physicians, who typically work at hospitals, shared the financial pains of their institutions, particularly in the early stages of the pandemic. In April, hospital admissions were 34.1% below prepandemic levels, according to a study published in Health Affairs. That figure had risen by June, but it was still 8.3% below prepandemic volume.
By the end of the year, many hospitals and hospital systems were in the black, thanks in large part to generous federal subsidies, but actual operations still lost money for the year. Altogether, 42% of them posted an operational loss in 2020, up from the 23% in 2019, according to a survey by Moody’s Investors Service.
Medscape’s report shows that many employed physicians lost pay in 2020, and for many, pay had not returned to pre-COVID levels. Only 28% of primary care physicians and 32% of specialists who lost pay have seen it restored, according to the report. In addition, 15% of surveyed physicians did not receive an annual raise.
Many employed doctors are paid on the basis of relative value units (RVUs), which is a measure of the value of their work. In many cases, there was not enough work to reach RVU thresholds. Would hospitals and other employers lower RVU targets to meet the problem? “I haven’t seen our clients make concessions to providers along those lines,” Mr. Belkin says.
Physicians had to work longer hours
The Medscape report also found that in 2020, physicians saw fewer patients because each visit took longer.
“With the threat of COVID, in-person visits take more time than before,” Mr. Belkin says. “Physicians and staff have to prepare the exam room after each visit, and doctors must spend more time answering patients’ questions about COVID.”
“The new protocols to keep everyone safe add time between patients, and physicians have to answer patients’ questions about the pandemic and vaccines,” Dr. Fischer-Wright says. “You might see a 20% increase in time spent just on these non–revenue-generating COVID activities.”
Physicians still like their specialty
Although 2020 was a challenging year for physicians, the percentage of those who were satisfied with their specialty choice generally did not slip from the year before. It actually rose for several specialties – most notably, rheumatology, pulmonology, physical medicine and rehabilitation, and nephrology.
One specialty saw a decline in satisfaction with their specialty choice, and that was public health and preventive medicine, which plummeted 16 percentage points to 67% – putting it at the bottom of the list.
Even before the pandemic, many public health departments were chronically underfunded. This problem was possibly exacerbated by the pressures to keep up with COVID reporting and testing responsibilities.
Conclusion
Although 2020 was a wild ride for many physicians, many came out of it with only minor reductions in overall compensation, and some saw increases. Still, some specialties and many individuals experienced terrible financial stress and had to make changes in their lives and their spending in order to stay afloat.
“The biggest inhibitor to getting back to normal had to do with doctors who did not want to return because they did not want to risk getting COVID,” Dr. Pinto reports. But he notes that by February 2021 most doctors were completely vaccinated and could feel safe again.
A version of this article first appeared on Medscape.com.
Seven ways President Biden could now change health care
President Joe Biden has come into office after an unexpected shift in Congress. On Jan. 5, Democrats scored an upset by winning two U.S. Senate seats in runoff elections in Georgia, giving them control of the Senate.
Now the Democrats have control of all three levers of power – the Senate, the House, and the presidency – for the first time since the early years of the Obama administration.
How will President Biden use this new concentration of power to shape health care policy?
Democrats’ small majorities in both houses of Congress suggest that moderation and bipartisanship will be necessary to get things done. Moreover, Mr. Biden himself is calling for bipartisanship. “On this January day,” he said in his inauguration speech, “my whole soul is in this: Bringing America together, uniting our people, uniting our nation.”
Key health care actions that Mr. Biden could pursue include the following.
1. Passing a new COVID-19 relief bill
Above all, Mr. Biden is focused on overcoming the COVID-19 pandemic, which has been registering record deaths recently, and getting newly released vaccines to Americans.
“Dealing with the coronavirus pandemic is one of the most important battles our administration will face, and I will be informed by science and by experts,” the president said.
“There is no question that the pandemic is the highest priority for the Biden administration,” said Larry Levitt, executive vice president for health policy at the Henry J. Kaiser Family Foundation. “COVID will dominate the early weeks and months of this administration. His success rests, in particular, on improving the rollout of vaccines.”
Five days before his inauguration, the president-elect unveiled the American Rescue Plan, a massive, $1.9 trillion legislative package intended to hasten rollout of COVID-19 vaccines, improve COVID-19 testing, and provide financial help to businesses and individuals, among many other things.
The bill would add $1,400 to the recently passed $600 government relief payments for each American, amounting to a $2,000 check. It would also enact many non-COVID-19 measures, such as a $15-an-hour minimum wage and measures to bolster the Affordable Care Act (ACA).
If Democrats cannot reach a deal with the Republicans, they might turn the proposal into a reconciliation bill, which could then be passed with a simple majority. However, drafting a reconciliation bill is a long, complicated process that would require removing provisions that don’t meet the requirements of reconciliation, said Hazen Marshall, a Washington lobbyist and former staffer for Sen. Mitch McConnell.
Most importantly, Mr. Marshall said, reconciliation bills bring out diehard partisanship. “They involve a sledgehammer mentality,” he says. “You’re telling the other side that their views aren’t going to matter.” The final version of the ACA, for example, was passed as a reconciliation bill, with not one Republican vote.
In the Trump years, “the last four reconciliation bills did not get any votes from the minority,” added Rodney Whitlock, PhD, a political consultant at McDermott+Consulting, who worked 21 years for Republicans in the House. “When the majority chooses to use reconciliation, it is an admission that it has no interest in working with the minority.”
Hammering out a compromise will be tough, but Robert Pearl MD, former CEO of the Permanente Medical Group and a professor at Stanford (Calif.) University, said that if anyone can do it, it would be President Biden. Having served in the Senate for 36 years, “Biden knows Congress better than any president since Lyndon Johnson,” he said. “He can reach across the aisle and get legislation passed as much as anyone could these days.”
2. Restoring Obamacare
Mr. Biden has vowed to undo a gradual dismantling of the ACA that went on during the Trump administration through executive orders, rule-making, and new laws. “Reinvigorating the ACA was a central part of Biden’s platform as a candidate,” Mr. Levitt said.
Each Trump action against the ACA must be undone in the same way. Presidential orders must be met with presidential orders, regulations with regulations, and legislation with legislation.
The ACA is also being challenged in the Supreme Court. Republicans under Trump passed a law that reduced the penalty for not buying health insurance under the ACA to zero. Then a group of 20 states, led by Texas, filed a lawsuit asserting that this change makes the ACA unconstitutional.
The lawsuit was heard by the Supreme Court in November. From remarks made by the justices then, it appears that the court might well uphold the law when a verdict comes down in June.
But just in case, Mr. Biden wants Congress to enact a small penalty for not buying health insurance, which would remove the basis of the lawsuit.
Mr. Biden’s choice for secretary of Health and Human Services shows his level of commitment to protecting the ACA. His HHS nominee is California Attorney General Xavier Becerra, who led a group of 17 states defending the ACA in the current lawsuit.
In addition to undoing Trump’s changes, Mr. Biden plans to expand the ACA beyond the original legislation. The new COVID-19 bill contains provisions that would expand subsidies to buy insurance on the exchanges and would lower the maximum percentage of income that anyone has to pay for health insurance to 8.5%.
Dealing with Medicaid is also related to the ACA. In 2012, the Supreme Court struck down a mandate that states expand their Medicaid programs, with substantial funding from the federal government.
To date, 12 states still do not participate in the Medicaid expansion. To lure them into the expansion, the Democrat-controlled House last session passed a bill that would offer to pay the entire bill for the first 3 years of Medicaid expansion if they chose to enact an expansion.
3. Undoing other Trump actions in health care
In addition to changes in the ACA, Trump also enacted a number of other changes in health care that President Biden could undo. For example, Mr. Biden says he will reenter the World Health Organization (WHO) so that the United States could better coordinate a COVID-19 response with other nations. Trump exited the WHO with the stroke of a pen, and Mr. Biden can do the same in reverse.
Under Trump, the Centers for Medicare & Medicaid Services used waivers to weaken the ACA and allow states to alter their Medicaid programs. One waiver allows Georgia to leave the ACA exchanges and put brokers in charge of buying coverage. Other waivers allow states to transform federal Medicaid payments into block grants, which several states are planning to do.
The Trump CMS has allowed several states to use Medicaid waivers to add work requirements for Medicaid recipients. The courts have blocked the work rules so far, and the Biden CMS may decide to reverse these waivers or modify them.
“Undoing waivers is normally a fairly simple thing,” Mr. Levitt said. In January, however, the Trump CMS asked some waiver states to sign new contracts in which the CMS pledges not to end a waiver without 9 months’ notice. It’s unclear how many states signed such contracts and what obligation the Biden CMS has to enforce them.
The Trump CMS also stopped reimbursing insurers for waiving deductibles and copayments for low-income customers, as directed by the ACA. Without federal reimbursement, some insurers raised premiums by as much as 20% to cover the costs. It is unclear how the Biden CMS would tackle this change.
4. Negotiating lower drug prices
Allowing Medicare to negotiate drug prices, a major plank in Mr. Biden’s campaign, would seem like a slam dunk for the Democrats. This approach is backed by 89% of Americans, including 84% of Republicans, according to a Kaiser Family Foundation survey in December.
“With that level of support, it’s hard to go wrong politically on this issue,” Mr. Levitt said.
Many Republicans, however, do not favor negotiating drug prices, and the two parties continue to be far apart on how to control drug prices. Trump signed an action that allows Americans to buy cheaper drugs abroad, an approach that Mr. Biden also supports, but it is now tied up in the courts.
“A drug pricing bill has always been difficult to pass,” Dr. Whitlock said. “The issue is popular with the public, but change does not come easily. The drug lobby is one the strongest in Washington, and now it may be even stronger, since it was the drug companies that gave us the COVID vaccines.”
Dr. Whitlock said Republicans will want Democrats to compromise on drug pricing, but he doubts they will do so. The House passed a bill to negotiate drug prices last year, which never was voted on in the Senate. “It is difficult to imagine that the Democrats will be able to move rightward from that House bill,” Dr. Whitlock said. “Democrats are likely to stand pat on drug pricing.”
5. Introducing a public option
President Biden’s campaign proposal for a public option – health insurance offered by the federal government – and to lower the age for Medicare eligibility from 65 years to 60 years, resulted from a compromise between two factions of the Democratic party on how to expand coverage.
Although Mr. Biden and other moderates wanted to focus on fixing the ACA, Democrats led by Sen. Bernie Sanders of Vermont called for a single-payer system, dubbed “Medicare for all.” A public option was seen as the middle ground between the two camps.
“A public option would be a very controversial,” Dr. Whitlock said. Critics say it would pay at Medicare rates, which would reduce doctors’ reimbursements, and save very little money compared with a single-payer system.
Dr. Pearl sees similar problems with lowering the Medicare age. “This would be an expensive change that the federal government could not afford, particularly with all the spending on the pandemic,” he said. “And it would be tough on doctors and hospitals, because Medicare pays less than the private insurance payment they are now getting.”
“The public option is likely to get serious discussion within the Democratic caucus and get onto the Senate floor,” Mr. Levitt said. “The party won’t ignore it.” He notes that in the new Senate, Sen. Sanders chairs the budget committee, and from that position he is likely to push for expanding access to care.
Mr. Levitt says the Biden CMS might allow states to experiment with a statewide public option or even a single-payer model, but he concedes that states, with their budgets ravaged by COVID-19, do not currently have the money to launch such programs.
6. Reviving the CMS
Under President Obama, the CMS was the engine that implemented the ACA and shepherded wider use of value-based reimbursements, which reward providers for quality and outcomes rather than volume.
Under the Trump administration, CMS leadership continued to uphold value-based reimbursement, Dr. Pearl observed. “CMS leadership championed value-based payments, but they encountered a lot of pushback from doctors and hospitals and had to scale back their goals,” he said.
On the other hand, the Trump CMS took a 180-degree turn on the ACA and worked to take it apart. This took a toll on staff morale, according to Donald M. Berwick, MD, who ran the CMS under President Obama. “Many people in CMS did not feel supported during the Trump administration, and some of them left,” Dr. Berwick said.
The CMS needs experienced staff on board to write comprehensible rules and regulations that can overcome court challenges.
Having a fully functioning CMS also requires consistent leadership, which was a problem for Obama. When Mr. Obama nominated Dr. Berwick, 60 Senate votes were needed to confirm him, and Republicans would not vote for him. Mr. Obama eventually brought Dr. Berwick in as a recess appointment, but it meant he could serve for only 17 months.
Since then, Senate confirmation rules have changed so that only a simple majority is needed to confirm appointments. This is important for Biden’s nominees, Dr. Berwick said. “For a president, having your team in place means you are able to execute the policies you want,” he said. “You need to have consistent leadership.”
7. Potentially changing health care without Congress
Even with their newly won control of the Senate, the Democrats’ thin majorities in both houses of Congress may not be enough to pass much legislation if Republicans are solidly opposed.
Democrats in the House also have a narrow path this session in which to pass legislation. The Democratic leadership has an 11-vote majority, but it must contend with 15 moderate representatives in purple districts (where Democrats and Republicans have about equal support).
A bigger problem looms before the Democrats. In 2022, the party may well lose its majorities in both houses. Mr. Whitlock notes that the party of an incoming president normally loses seats in the first midterm election. “The last incoming president to keep both houses of Congress in his first midterm was Jimmy Carter,” he said.
If this happens, President Biden would have to govern without the support of Congress, which is what Barack Obama had to do through most of his presidency. As Mr. Obama’s vice president, Mr. Biden is well aware how that goes. Governing without Congress means relying on presidential orders and decrees.
In health care, Mr. Biden has a powerful policy-making tool, the Center for Medicare & Medicaid Innovation (CMMI). The CMMI was empowered by the ACA to initiate pilot programs for new payment models.
So far, the CMMI’s work has been mainly limited to accountable care organizations, bundled payments, and patient-centered medical homes, but it could also be used to enact new federal policies that would normally require Congressional action, Mr. Levitt said.
Conclusion
Expectations have been very high for what President Joe Biden can do in health care. He needs to unite a very divided political system to defeat a deadly pandemic, restore Obamacare, and sign landmark legislation, such as a drug-pricing bill.
But shepherding bills through Congress will be a challenge. “You need to have accountability, unity, and civility, which is a Herculean task,” Mr. Whitlock said. “You have to keep policies off the table that could blow up the bipartisanship.”
A version of this article first appeared on Medscape.com.
President Joe Biden has come into office after an unexpected shift in Congress. On Jan. 5, Democrats scored an upset by winning two U.S. Senate seats in runoff elections in Georgia, giving them control of the Senate.
Now the Democrats have control of all three levers of power – the Senate, the House, and the presidency – for the first time since the early years of the Obama administration.
How will President Biden use this new concentration of power to shape health care policy?
Democrats’ small majorities in both houses of Congress suggest that moderation and bipartisanship will be necessary to get things done. Moreover, Mr. Biden himself is calling for bipartisanship. “On this January day,” he said in his inauguration speech, “my whole soul is in this: Bringing America together, uniting our people, uniting our nation.”
Key health care actions that Mr. Biden could pursue include the following.
1. Passing a new COVID-19 relief bill
Above all, Mr. Biden is focused on overcoming the COVID-19 pandemic, which has been registering record deaths recently, and getting newly released vaccines to Americans.
“Dealing with the coronavirus pandemic is one of the most important battles our administration will face, and I will be informed by science and by experts,” the president said.
“There is no question that the pandemic is the highest priority for the Biden administration,” said Larry Levitt, executive vice president for health policy at the Henry J. Kaiser Family Foundation. “COVID will dominate the early weeks and months of this administration. His success rests, in particular, on improving the rollout of vaccines.”
Five days before his inauguration, the president-elect unveiled the American Rescue Plan, a massive, $1.9 trillion legislative package intended to hasten rollout of COVID-19 vaccines, improve COVID-19 testing, and provide financial help to businesses and individuals, among many other things.
The bill would add $1,400 to the recently passed $600 government relief payments for each American, amounting to a $2,000 check. It would also enact many non-COVID-19 measures, such as a $15-an-hour minimum wage and measures to bolster the Affordable Care Act (ACA).
If Democrats cannot reach a deal with the Republicans, they might turn the proposal into a reconciliation bill, which could then be passed with a simple majority. However, drafting a reconciliation bill is a long, complicated process that would require removing provisions that don’t meet the requirements of reconciliation, said Hazen Marshall, a Washington lobbyist and former staffer for Sen. Mitch McConnell.
Most importantly, Mr. Marshall said, reconciliation bills bring out diehard partisanship. “They involve a sledgehammer mentality,” he says. “You’re telling the other side that their views aren’t going to matter.” The final version of the ACA, for example, was passed as a reconciliation bill, with not one Republican vote.
In the Trump years, “the last four reconciliation bills did not get any votes from the minority,” added Rodney Whitlock, PhD, a political consultant at McDermott+Consulting, who worked 21 years for Republicans in the House. “When the majority chooses to use reconciliation, it is an admission that it has no interest in working with the minority.”
Hammering out a compromise will be tough, but Robert Pearl MD, former CEO of the Permanente Medical Group and a professor at Stanford (Calif.) University, said that if anyone can do it, it would be President Biden. Having served in the Senate for 36 years, “Biden knows Congress better than any president since Lyndon Johnson,” he said. “He can reach across the aisle and get legislation passed as much as anyone could these days.”
2. Restoring Obamacare
Mr. Biden has vowed to undo a gradual dismantling of the ACA that went on during the Trump administration through executive orders, rule-making, and new laws. “Reinvigorating the ACA was a central part of Biden’s platform as a candidate,” Mr. Levitt said.
Each Trump action against the ACA must be undone in the same way. Presidential orders must be met with presidential orders, regulations with regulations, and legislation with legislation.
The ACA is also being challenged in the Supreme Court. Republicans under Trump passed a law that reduced the penalty for not buying health insurance under the ACA to zero. Then a group of 20 states, led by Texas, filed a lawsuit asserting that this change makes the ACA unconstitutional.
The lawsuit was heard by the Supreme Court in November. From remarks made by the justices then, it appears that the court might well uphold the law when a verdict comes down in June.
But just in case, Mr. Biden wants Congress to enact a small penalty for not buying health insurance, which would remove the basis of the lawsuit.
Mr. Biden’s choice for secretary of Health and Human Services shows his level of commitment to protecting the ACA. His HHS nominee is California Attorney General Xavier Becerra, who led a group of 17 states defending the ACA in the current lawsuit.
In addition to undoing Trump’s changes, Mr. Biden plans to expand the ACA beyond the original legislation. The new COVID-19 bill contains provisions that would expand subsidies to buy insurance on the exchanges and would lower the maximum percentage of income that anyone has to pay for health insurance to 8.5%.
Dealing with Medicaid is also related to the ACA. In 2012, the Supreme Court struck down a mandate that states expand their Medicaid programs, with substantial funding from the federal government.
To date, 12 states still do not participate in the Medicaid expansion. To lure them into the expansion, the Democrat-controlled House last session passed a bill that would offer to pay the entire bill for the first 3 years of Medicaid expansion if they chose to enact an expansion.
3. Undoing other Trump actions in health care
In addition to changes in the ACA, Trump also enacted a number of other changes in health care that President Biden could undo. For example, Mr. Biden says he will reenter the World Health Organization (WHO) so that the United States could better coordinate a COVID-19 response with other nations. Trump exited the WHO with the stroke of a pen, and Mr. Biden can do the same in reverse.
Under Trump, the Centers for Medicare & Medicaid Services used waivers to weaken the ACA and allow states to alter their Medicaid programs. One waiver allows Georgia to leave the ACA exchanges and put brokers in charge of buying coverage. Other waivers allow states to transform federal Medicaid payments into block grants, which several states are planning to do.
The Trump CMS has allowed several states to use Medicaid waivers to add work requirements for Medicaid recipients. The courts have blocked the work rules so far, and the Biden CMS may decide to reverse these waivers or modify them.
“Undoing waivers is normally a fairly simple thing,” Mr. Levitt said. In January, however, the Trump CMS asked some waiver states to sign new contracts in which the CMS pledges not to end a waiver without 9 months’ notice. It’s unclear how many states signed such contracts and what obligation the Biden CMS has to enforce them.
The Trump CMS also stopped reimbursing insurers for waiving deductibles and copayments for low-income customers, as directed by the ACA. Without federal reimbursement, some insurers raised premiums by as much as 20% to cover the costs. It is unclear how the Biden CMS would tackle this change.
4. Negotiating lower drug prices
Allowing Medicare to negotiate drug prices, a major plank in Mr. Biden’s campaign, would seem like a slam dunk for the Democrats. This approach is backed by 89% of Americans, including 84% of Republicans, according to a Kaiser Family Foundation survey in December.
“With that level of support, it’s hard to go wrong politically on this issue,” Mr. Levitt said.
Many Republicans, however, do not favor negotiating drug prices, and the two parties continue to be far apart on how to control drug prices. Trump signed an action that allows Americans to buy cheaper drugs abroad, an approach that Mr. Biden also supports, but it is now tied up in the courts.
“A drug pricing bill has always been difficult to pass,” Dr. Whitlock said. “The issue is popular with the public, but change does not come easily. The drug lobby is one the strongest in Washington, and now it may be even stronger, since it was the drug companies that gave us the COVID vaccines.”
Dr. Whitlock said Republicans will want Democrats to compromise on drug pricing, but he doubts they will do so. The House passed a bill to negotiate drug prices last year, which never was voted on in the Senate. “It is difficult to imagine that the Democrats will be able to move rightward from that House bill,” Dr. Whitlock said. “Democrats are likely to stand pat on drug pricing.”
5. Introducing a public option
President Biden’s campaign proposal for a public option – health insurance offered by the federal government – and to lower the age for Medicare eligibility from 65 years to 60 years, resulted from a compromise between two factions of the Democratic party on how to expand coverage.
Although Mr. Biden and other moderates wanted to focus on fixing the ACA, Democrats led by Sen. Bernie Sanders of Vermont called for a single-payer system, dubbed “Medicare for all.” A public option was seen as the middle ground between the two camps.
“A public option would be a very controversial,” Dr. Whitlock said. Critics say it would pay at Medicare rates, which would reduce doctors’ reimbursements, and save very little money compared with a single-payer system.
Dr. Pearl sees similar problems with lowering the Medicare age. “This would be an expensive change that the federal government could not afford, particularly with all the spending on the pandemic,” he said. “And it would be tough on doctors and hospitals, because Medicare pays less than the private insurance payment they are now getting.”
“The public option is likely to get serious discussion within the Democratic caucus and get onto the Senate floor,” Mr. Levitt said. “The party won’t ignore it.” He notes that in the new Senate, Sen. Sanders chairs the budget committee, and from that position he is likely to push for expanding access to care.
Mr. Levitt says the Biden CMS might allow states to experiment with a statewide public option or even a single-payer model, but he concedes that states, with their budgets ravaged by COVID-19, do not currently have the money to launch such programs.
6. Reviving the CMS
Under President Obama, the CMS was the engine that implemented the ACA and shepherded wider use of value-based reimbursements, which reward providers for quality and outcomes rather than volume.
Under the Trump administration, CMS leadership continued to uphold value-based reimbursement, Dr. Pearl observed. “CMS leadership championed value-based payments, but they encountered a lot of pushback from doctors and hospitals and had to scale back their goals,” he said.
On the other hand, the Trump CMS took a 180-degree turn on the ACA and worked to take it apart. This took a toll on staff morale, according to Donald M. Berwick, MD, who ran the CMS under President Obama. “Many people in CMS did not feel supported during the Trump administration, and some of them left,” Dr. Berwick said.
The CMS needs experienced staff on board to write comprehensible rules and regulations that can overcome court challenges.
Having a fully functioning CMS also requires consistent leadership, which was a problem for Obama. When Mr. Obama nominated Dr. Berwick, 60 Senate votes were needed to confirm him, and Republicans would not vote for him. Mr. Obama eventually brought Dr. Berwick in as a recess appointment, but it meant he could serve for only 17 months.
Since then, Senate confirmation rules have changed so that only a simple majority is needed to confirm appointments. This is important for Biden’s nominees, Dr. Berwick said. “For a president, having your team in place means you are able to execute the policies you want,” he said. “You need to have consistent leadership.”
7. Potentially changing health care without Congress
Even with their newly won control of the Senate, the Democrats’ thin majorities in both houses of Congress may not be enough to pass much legislation if Republicans are solidly opposed.
Democrats in the House also have a narrow path this session in which to pass legislation. The Democratic leadership has an 11-vote majority, but it must contend with 15 moderate representatives in purple districts (where Democrats and Republicans have about equal support).
A bigger problem looms before the Democrats. In 2022, the party may well lose its majorities in both houses. Mr. Whitlock notes that the party of an incoming president normally loses seats in the first midterm election. “The last incoming president to keep both houses of Congress in his first midterm was Jimmy Carter,” he said.
If this happens, President Biden would have to govern without the support of Congress, which is what Barack Obama had to do through most of his presidency. As Mr. Obama’s vice president, Mr. Biden is well aware how that goes. Governing without Congress means relying on presidential orders and decrees.
In health care, Mr. Biden has a powerful policy-making tool, the Center for Medicare & Medicaid Innovation (CMMI). The CMMI was empowered by the ACA to initiate pilot programs for new payment models.
So far, the CMMI’s work has been mainly limited to accountable care organizations, bundled payments, and patient-centered medical homes, but it could also be used to enact new federal policies that would normally require Congressional action, Mr. Levitt said.
Conclusion
Expectations have been very high for what President Joe Biden can do in health care. He needs to unite a very divided political system to defeat a deadly pandemic, restore Obamacare, and sign landmark legislation, such as a drug-pricing bill.
But shepherding bills through Congress will be a challenge. “You need to have accountability, unity, and civility, which is a Herculean task,” Mr. Whitlock said. “You have to keep policies off the table that could blow up the bipartisanship.”
A version of this article first appeared on Medscape.com.
President Joe Biden has come into office after an unexpected shift in Congress. On Jan. 5, Democrats scored an upset by winning two U.S. Senate seats in runoff elections in Georgia, giving them control of the Senate.
Now the Democrats have control of all three levers of power – the Senate, the House, and the presidency – for the first time since the early years of the Obama administration.
How will President Biden use this new concentration of power to shape health care policy?
Democrats’ small majorities in both houses of Congress suggest that moderation and bipartisanship will be necessary to get things done. Moreover, Mr. Biden himself is calling for bipartisanship. “On this January day,” he said in his inauguration speech, “my whole soul is in this: Bringing America together, uniting our people, uniting our nation.”
Key health care actions that Mr. Biden could pursue include the following.
1. Passing a new COVID-19 relief bill
Above all, Mr. Biden is focused on overcoming the COVID-19 pandemic, which has been registering record deaths recently, and getting newly released vaccines to Americans.
“Dealing with the coronavirus pandemic is one of the most important battles our administration will face, and I will be informed by science and by experts,” the president said.
“There is no question that the pandemic is the highest priority for the Biden administration,” said Larry Levitt, executive vice president for health policy at the Henry J. Kaiser Family Foundation. “COVID will dominate the early weeks and months of this administration. His success rests, in particular, on improving the rollout of vaccines.”
Five days before his inauguration, the president-elect unveiled the American Rescue Plan, a massive, $1.9 trillion legislative package intended to hasten rollout of COVID-19 vaccines, improve COVID-19 testing, and provide financial help to businesses and individuals, among many other things.
The bill would add $1,400 to the recently passed $600 government relief payments for each American, amounting to a $2,000 check. It would also enact many non-COVID-19 measures, such as a $15-an-hour minimum wage and measures to bolster the Affordable Care Act (ACA).
If Democrats cannot reach a deal with the Republicans, they might turn the proposal into a reconciliation bill, which could then be passed with a simple majority. However, drafting a reconciliation bill is a long, complicated process that would require removing provisions that don’t meet the requirements of reconciliation, said Hazen Marshall, a Washington lobbyist and former staffer for Sen. Mitch McConnell.
Most importantly, Mr. Marshall said, reconciliation bills bring out diehard partisanship. “They involve a sledgehammer mentality,” he says. “You’re telling the other side that their views aren’t going to matter.” The final version of the ACA, for example, was passed as a reconciliation bill, with not one Republican vote.
In the Trump years, “the last four reconciliation bills did not get any votes from the minority,” added Rodney Whitlock, PhD, a political consultant at McDermott+Consulting, who worked 21 years for Republicans in the House. “When the majority chooses to use reconciliation, it is an admission that it has no interest in working with the minority.”
Hammering out a compromise will be tough, but Robert Pearl MD, former CEO of the Permanente Medical Group and a professor at Stanford (Calif.) University, said that if anyone can do it, it would be President Biden. Having served in the Senate for 36 years, “Biden knows Congress better than any president since Lyndon Johnson,” he said. “He can reach across the aisle and get legislation passed as much as anyone could these days.”
2. Restoring Obamacare
Mr. Biden has vowed to undo a gradual dismantling of the ACA that went on during the Trump administration through executive orders, rule-making, and new laws. “Reinvigorating the ACA was a central part of Biden’s platform as a candidate,” Mr. Levitt said.
Each Trump action against the ACA must be undone in the same way. Presidential orders must be met with presidential orders, regulations with regulations, and legislation with legislation.
The ACA is also being challenged in the Supreme Court. Republicans under Trump passed a law that reduced the penalty for not buying health insurance under the ACA to zero. Then a group of 20 states, led by Texas, filed a lawsuit asserting that this change makes the ACA unconstitutional.
The lawsuit was heard by the Supreme Court in November. From remarks made by the justices then, it appears that the court might well uphold the law when a verdict comes down in June.
But just in case, Mr. Biden wants Congress to enact a small penalty for not buying health insurance, which would remove the basis of the lawsuit.
Mr. Biden’s choice for secretary of Health and Human Services shows his level of commitment to protecting the ACA. His HHS nominee is California Attorney General Xavier Becerra, who led a group of 17 states defending the ACA in the current lawsuit.
In addition to undoing Trump’s changes, Mr. Biden plans to expand the ACA beyond the original legislation. The new COVID-19 bill contains provisions that would expand subsidies to buy insurance on the exchanges and would lower the maximum percentage of income that anyone has to pay for health insurance to 8.5%.
Dealing with Medicaid is also related to the ACA. In 2012, the Supreme Court struck down a mandate that states expand their Medicaid programs, with substantial funding from the federal government.
To date, 12 states still do not participate in the Medicaid expansion. To lure them into the expansion, the Democrat-controlled House last session passed a bill that would offer to pay the entire bill for the first 3 years of Medicaid expansion if they chose to enact an expansion.
3. Undoing other Trump actions in health care
In addition to changes in the ACA, Trump also enacted a number of other changes in health care that President Biden could undo. For example, Mr. Biden says he will reenter the World Health Organization (WHO) so that the United States could better coordinate a COVID-19 response with other nations. Trump exited the WHO with the stroke of a pen, and Mr. Biden can do the same in reverse.
Under Trump, the Centers for Medicare & Medicaid Services used waivers to weaken the ACA and allow states to alter their Medicaid programs. One waiver allows Georgia to leave the ACA exchanges and put brokers in charge of buying coverage. Other waivers allow states to transform federal Medicaid payments into block grants, which several states are planning to do.
The Trump CMS has allowed several states to use Medicaid waivers to add work requirements for Medicaid recipients. The courts have blocked the work rules so far, and the Biden CMS may decide to reverse these waivers or modify them.
“Undoing waivers is normally a fairly simple thing,” Mr. Levitt said. In January, however, the Trump CMS asked some waiver states to sign new contracts in which the CMS pledges not to end a waiver without 9 months’ notice. It’s unclear how many states signed such contracts and what obligation the Biden CMS has to enforce them.
The Trump CMS also stopped reimbursing insurers for waiving deductibles and copayments for low-income customers, as directed by the ACA. Without federal reimbursement, some insurers raised premiums by as much as 20% to cover the costs. It is unclear how the Biden CMS would tackle this change.
4. Negotiating lower drug prices
Allowing Medicare to negotiate drug prices, a major plank in Mr. Biden’s campaign, would seem like a slam dunk for the Democrats. This approach is backed by 89% of Americans, including 84% of Republicans, according to a Kaiser Family Foundation survey in December.
“With that level of support, it’s hard to go wrong politically on this issue,” Mr. Levitt said.
Many Republicans, however, do not favor negotiating drug prices, and the two parties continue to be far apart on how to control drug prices. Trump signed an action that allows Americans to buy cheaper drugs abroad, an approach that Mr. Biden also supports, but it is now tied up in the courts.
“A drug pricing bill has always been difficult to pass,” Dr. Whitlock said. “The issue is popular with the public, but change does not come easily. The drug lobby is one the strongest in Washington, and now it may be even stronger, since it was the drug companies that gave us the COVID vaccines.”
Dr. Whitlock said Republicans will want Democrats to compromise on drug pricing, but he doubts they will do so. The House passed a bill to negotiate drug prices last year, which never was voted on in the Senate. “It is difficult to imagine that the Democrats will be able to move rightward from that House bill,” Dr. Whitlock said. “Democrats are likely to stand pat on drug pricing.”
5. Introducing a public option
President Biden’s campaign proposal for a public option – health insurance offered by the federal government – and to lower the age for Medicare eligibility from 65 years to 60 years, resulted from a compromise between two factions of the Democratic party on how to expand coverage.
Although Mr. Biden and other moderates wanted to focus on fixing the ACA, Democrats led by Sen. Bernie Sanders of Vermont called for a single-payer system, dubbed “Medicare for all.” A public option was seen as the middle ground between the two camps.
“A public option would be a very controversial,” Dr. Whitlock said. Critics say it would pay at Medicare rates, which would reduce doctors’ reimbursements, and save very little money compared with a single-payer system.
Dr. Pearl sees similar problems with lowering the Medicare age. “This would be an expensive change that the federal government could not afford, particularly with all the spending on the pandemic,” he said. “And it would be tough on doctors and hospitals, because Medicare pays less than the private insurance payment they are now getting.”
“The public option is likely to get serious discussion within the Democratic caucus and get onto the Senate floor,” Mr. Levitt said. “The party won’t ignore it.” He notes that in the new Senate, Sen. Sanders chairs the budget committee, and from that position he is likely to push for expanding access to care.
Mr. Levitt says the Biden CMS might allow states to experiment with a statewide public option or even a single-payer model, but he concedes that states, with their budgets ravaged by COVID-19, do not currently have the money to launch such programs.
6. Reviving the CMS
Under President Obama, the CMS was the engine that implemented the ACA and shepherded wider use of value-based reimbursements, which reward providers for quality and outcomes rather than volume.
Under the Trump administration, CMS leadership continued to uphold value-based reimbursement, Dr. Pearl observed. “CMS leadership championed value-based payments, but they encountered a lot of pushback from doctors and hospitals and had to scale back their goals,” he said.
On the other hand, the Trump CMS took a 180-degree turn on the ACA and worked to take it apart. This took a toll on staff morale, according to Donald M. Berwick, MD, who ran the CMS under President Obama. “Many people in CMS did not feel supported during the Trump administration, and some of them left,” Dr. Berwick said.
The CMS needs experienced staff on board to write comprehensible rules and regulations that can overcome court challenges.
Having a fully functioning CMS also requires consistent leadership, which was a problem for Obama. When Mr. Obama nominated Dr. Berwick, 60 Senate votes were needed to confirm him, and Republicans would not vote for him. Mr. Obama eventually brought Dr. Berwick in as a recess appointment, but it meant he could serve for only 17 months.
Since then, Senate confirmation rules have changed so that only a simple majority is needed to confirm appointments. This is important for Biden’s nominees, Dr. Berwick said. “For a president, having your team in place means you are able to execute the policies you want,” he said. “You need to have consistent leadership.”
7. Potentially changing health care without Congress
Even with their newly won control of the Senate, the Democrats’ thin majorities in both houses of Congress may not be enough to pass much legislation if Republicans are solidly opposed.
Democrats in the House also have a narrow path this session in which to pass legislation. The Democratic leadership has an 11-vote majority, but it must contend with 15 moderate representatives in purple districts (where Democrats and Republicans have about equal support).
A bigger problem looms before the Democrats. In 2022, the party may well lose its majorities in both houses. Mr. Whitlock notes that the party of an incoming president normally loses seats in the first midterm election. “The last incoming president to keep both houses of Congress in his first midterm was Jimmy Carter,” he said.
If this happens, President Biden would have to govern without the support of Congress, which is what Barack Obama had to do through most of his presidency. As Mr. Obama’s vice president, Mr. Biden is well aware how that goes. Governing without Congress means relying on presidential orders and decrees.
In health care, Mr. Biden has a powerful policy-making tool, the Center for Medicare & Medicaid Innovation (CMMI). The CMMI was empowered by the ACA to initiate pilot programs for new payment models.
So far, the CMMI’s work has been mainly limited to accountable care organizations, bundled payments, and patient-centered medical homes, but it could also be used to enact new federal policies that would normally require Congressional action, Mr. Levitt said.
Conclusion
Expectations have been very high for what President Joe Biden can do in health care. He needs to unite a very divided political system to defeat a deadly pandemic, restore Obamacare, and sign landmark legislation, such as a drug-pricing bill.
But shepherding bills through Congress will be a challenge. “You need to have accountability, unity, and civility, which is a Herculean task,” Mr. Whitlock said. “You have to keep policies off the table that could blow up the bipartisanship.”
A version of this article first appeared on Medscape.com.
Still happening: Pelvic exams on anesthetized patients. Why?
“When I was doing ob.gyn. as a med student, the attending would have me do a pelvic right after the patient was under and before we started surgery,” said one participant in an online forum. “We didn’t exactly get permission but it was for teaching purposes.”
Yet others don’t see what the commotion is about. “There are a hundred things that are done during a surgery that don’t require your specific consent (some of them much more ‘humiliating’ than a pelvic exam). ... There’s not really much left to be shy about during a gyn/rectal/prostate surgery, let me put it that way,” one doctor wrote.
However, many physicians are adamantly opposed to the practice, and laws intended to stop or limit it are being enacted throughout the nation.
Renewed concerns have prompted new state laws
A few states have required consent for pelvic exams for many years, beginning with California in 2003. But up until 2019, providing pelvic exams without informed consent was illegal in only six states.
Continuing reports of unauthorized pelvic exams indicate that the practice has not disappeared. University of Michigan professor Maya M. Hammoud, MD, past president of the Association of Professors of Gynecology and Obstetrics, and many others attribute renewed interest in the issue to a 2018 article in the journal Bioethics by Phoebe Friesen, a medical ethicist at McGill University, Montreal, that laid out the ethical arguments against the practice.
Starting in 2019, an outpouring of new state bills have been introduced, and nine more states have passed laws. In addition, 14 other states considered similar bills but did not pass them, in some cases because teaching institutions argued that they were already dealing with the issue. This happened in Connecticut and Massachusetts, after representatives of Yale University, New Haven, Conn., met with legislators.
Laws against the practice have been passed by 15 states, including California, Florida, Illinois, and New York. Some teaching institutions have recently been clamping down on the practice, while many teaching physicians insist that at this point, it has all but ended.
A practice that may still continue
For many years, ethicists, women’s rights groups, state legislators, and organized medicine have been trying to eliminate the practice of unauthorized pelvic exams by medical students. Several key medical groups have come out against it, including the American Medical Association, the Association of American Medical Colleges, and the American College of Obstetricians and Gynecologists.
“Fifteen years ago, studies found a substantial number of cases, but my sense is that most of that has stopped,” said Dr. Hammoud.
Yet despite these changes, there are some disturbing signs that the practice persists.
“I don’t have data, but anecdotally I see it still going on,” said Peter Ubel, MD, a professor at Duke University, Durham, N.C., who was involved in one of those early studies. “Every so often when I’m making a speech, a medical student tells me about performing a pelvic exam without getting permission.
“Perhaps in some cases the attending [physician] did get permission and didn’t tell the medical student, but that would also be a problem,” Dr. Ubel said. “The medical student should be informed that permission was given. This helps them be sensitive to the need to get consent.”
In a 2019 survey of medical students, 92% said they performed a pelvic exam on an anesthetized female patient, and of those, 61% did so without explicit patient consent.
The survey – involving 101 medical students at seven U.S. medical schools – also found that 11% of the medical students said they were extremely uncomfortable with the practice. But nearly one-third of the medical students said that opting out might jeopardize their grades and future careers.
“I tried to opt out once from doing a pelvic exam when I hadn’t met the patient beforehand,” one of them wrote. “The resident told me no.”
Some physicians defend the practice
Why do many medical students and doctors think that getting consent for pelvic exams is not necessary?
Some argue that patients implicitly give consent when they walk through the doors of a teaching hospital. “Sorry, but you inherently agree to that when you’re seen in an academic teaching hospital,” wrote one participant in a Student Doctor Network forum. “You agree to have residents and medical students participate in your care, not just an attending. If you just want an attending, then you are free to go to a nonteaching hospital. That’s the deal.”
Others argued that since the anesthetized patient couldn’t feel what was going on, it shouldn’t matter. “Things like pelvic exams, rectal exams, or even heroic trauma surgery occur for training purposes when there is no memory, no sensation and no harm to be done [and] society gains a better practitioner of the art of medicine,” a physician in Columbus, Ohio, wrote on Quora, an online forum.
Some doctors argue that they don’t ask for specific consent when they touch a variety of other body parts, and pelvic exams should be no different. Pelvic exams are needed before surgery of the pelvic area, but they have also been given to women undergoing surgery in a different part of the body.
In 2019 a woman told Deseret News in Utah that she had been recovering from stomach surgery when a resident physician mentioned something she had noticed “when we looked at your cervix.” When she asked why the physician had examined her cervix to prepare for stomach surgery, “no one could give her a good answer.”
A ‘positive goal’ doesn’t make it okay
What is missing in many defenses of the practice is any recognition that genitals are the most intimate part of the body, and that a patient’s desire for privacy ought to come first. In a survey of women undergoing gynecologic surgery, 72% expected to be asked for consent before medical students undertook pelvic examinations under anesthesia.
Overruling patients’ concerns about their own privacy is unethical, said Eli Y. Adashi, MD, professor of medical science and former dean of medicine and biological sciences at Brown University, Providence, R.I.
Dr. Adashi said the principle of patient autonomy in medical ethics directs that patients must be involved in decision-making about their care – even when caretakers are pursuing a positive goal, such as helping to educate future doctors.
“Conducting pelvic exams on unconscious women without their specific consent is simply untenable and never has been tenable, and it ought to be discontinued if it hasn’t been already,” says Dr. Adashi, who wrote an opinion piece on the issue for JAMA.
Furthermore, it has been shown that ignoring the need to get consent for pelvic exams makes physicians less concerned about getting patient consent in general. A study led by Dr. Ubel found that medical students who had completed an ob.gyn. clerkship thought getting patients’ consent was significantly less important than those who had not completed that clerkship.
Why give pelvic exams to anesthetized women?
Despite the controversy, a number of medical educators continue to direct medical students to perform pelvic exams on anesthetized women. Why is that?
“Pelvic exams are not easy to do,” Dr. Hammoud said. “Learners need to keep working on them; they have to do a lot of them in order to do them well.”
To teach pelvic exams, most medical schools provide standardized patients – paid volunteers who submit to exams and critique the medical student’s work afterwards – but these encounters are limited because of their cost, says Guy Benrubi, MD, professor and emeritus chair of the department of obstetrics and gynecology at the University of Florida, Jacksonville.
He said teaching programs therefore need to supplement exams on standardized patients with exams on unpaid volunteers who provide consent. Programs prefer anesthetized patients, Dr. Benrubi said, because they are easier for novices to work on. “With patients under anesthesia, the muscles are relaxed and it’s easier for learners to detect organs. All the same, you need to get consent.”
Teaching institutions stiffen consent requirements
Faced with growing opposition to pelvic exams without consent, teaching institutions as well as gynecologic educators have recently been tightening their policies.
Dr. Hammoud said she has always informed patients orally about the possibility of medical students performing pelvic exams on them, but now some institutions, including her own, want a more involved process. The university recently began consent in writing for pelvic exams.
In addition, the university also now requires that medical students meet patients before performing pelvic exams and that teaching physicians explain the students’ involvement.
Dr. Hammoud said some institutions now require a separate consent form for pelvic exams, but the University of Michigan simply directs that the possibility of the patient getting a pelvic exam be part of the consent form.
This requirement, called “explicit consent,” was endorsed by APGO. It differs from having a separate consent form for pelvic exams, which would highlight the possibility of a pelvic exam, as many women’s rights activists are calling for.
Why not have a separate form? Dr. Hammoud is concerned that it would unnecessarily alarm patients. “When you point out a certain issue, you’re in effect saying to the patient that this is not normal,” she said, noting that, when asked for consent to do the exams, most women agree to it.
New wave of state laws prompted by renewed concerns
Dr. Hammoud thinks the laws are unnecessary. “These laws are excessive for the vast majority of physicians who practice ethically. The profession should come up with its own standards rather than having a plethora of laws.”
Several of the more recent laws have a broader scope than the original laws. The original laws simply state that medical students or physicians must get informed consent, but they did not stipulate how informed consent should be obtained. (The laws also typically prohibit pelvic exams when surgery will be in a different area of the body.)
The new laws often follow this format, but some go well beyond it. Some also apply to rectal exams (Maine and Maryland), to men as well as women (Utah and Maryland) requires separate consent (Utah), and require consent for all pelvic exams (Florida).
The struggle over Florida’s law
The original Florida bill was drafted in 2019 by state Sen. Lauren Book, a Democrat who is a victims’ rights advocate working with women who have undergone sexual trauma. In written comments for this article, she says not getting consent for pelvic exams is still going on.
“This disturbing practice is commonplace at medical schools and teaching hospitals across the country – including several Florida universities, based on accounts from current and former medical students and faculty,” Sen. Book stated. “At best, these exams have been wrongful learning experiences for medical students or at worst, the equivalent of a sexual assault.”
Dr. Ubel took exception to linking the teaching activities to sexual assault. “I understand why many women would be horrified by this practice, but it’s not as bad as it seems,” he said. “There is nothing sexual or prurient about these exams, and they are motivated purely by a desire to teach people to be better doctors. That said, patients have the right to say, ‘I don’t want it done to me.’ ”
In early 2020, Dr. Benrubi was part of a coalition of medical groups that was trying to influence Sen. Book’s bill as it went through the legislature. Sen. Book’s original bill was relatively mild, “but then, late in the process, it was changed into a more sweeping bill with some unclear language,” he said.
The final version was passed and signed into law by Gov. Ron DeSantis, a conservative Republican, in June.
Dr. Benrubi said that a large number of state legislators, including Sen. Book, have been agreeable to fixing the bill. This was supposed to happen in a special session in the fall, but that never materialized, and so the fix will have to wait until the regular session in early 2021.
“The law should not apply to patients undergoing routine pelvic exams,” Dr. Benrubi said. “It should only apply to women patients under anesthesia.”
But while organized medicine wants to walk back the law, Dr. Book wants to expand it. “This upcoming session, I look forward to working with physicians to continue to hone this new law, and to work toward inclusion for males. Everyone has a right to consent.”
A version of this article first appeared on Medscape.com.
“When I was doing ob.gyn. as a med student, the attending would have me do a pelvic right after the patient was under and before we started surgery,” said one participant in an online forum. “We didn’t exactly get permission but it was for teaching purposes.”
Yet others don’t see what the commotion is about. “There are a hundred things that are done during a surgery that don’t require your specific consent (some of them much more ‘humiliating’ than a pelvic exam). ... There’s not really much left to be shy about during a gyn/rectal/prostate surgery, let me put it that way,” one doctor wrote.
However, many physicians are adamantly opposed to the practice, and laws intended to stop or limit it are being enacted throughout the nation.
Renewed concerns have prompted new state laws
A few states have required consent for pelvic exams for many years, beginning with California in 2003. But up until 2019, providing pelvic exams without informed consent was illegal in only six states.
Continuing reports of unauthorized pelvic exams indicate that the practice has not disappeared. University of Michigan professor Maya M. Hammoud, MD, past president of the Association of Professors of Gynecology and Obstetrics, and many others attribute renewed interest in the issue to a 2018 article in the journal Bioethics by Phoebe Friesen, a medical ethicist at McGill University, Montreal, that laid out the ethical arguments against the practice.
Starting in 2019, an outpouring of new state bills have been introduced, and nine more states have passed laws. In addition, 14 other states considered similar bills but did not pass them, in some cases because teaching institutions argued that they were already dealing with the issue. This happened in Connecticut and Massachusetts, after representatives of Yale University, New Haven, Conn., met with legislators.
Laws against the practice have been passed by 15 states, including California, Florida, Illinois, and New York. Some teaching institutions have recently been clamping down on the practice, while many teaching physicians insist that at this point, it has all but ended.
A practice that may still continue
For many years, ethicists, women’s rights groups, state legislators, and organized medicine have been trying to eliminate the practice of unauthorized pelvic exams by medical students. Several key medical groups have come out against it, including the American Medical Association, the Association of American Medical Colleges, and the American College of Obstetricians and Gynecologists.
“Fifteen years ago, studies found a substantial number of cases, but my sense is that most of that has stopped,” said Dr. Hammoud.
Yet despite these changes, there are some disturbing signs that the practice persists.
“I don’t have data, but anecdotally I see it still going on,” said Peter Ubel, MD, a professor at Duke University, Durham, N.C., who was involved in one of those early studies. “Every so often when I’m making a speech, a medical student tells me about performing a pelvic exam without getting permission.
“Perhaps in some cases the attending [physician] did get permission and didn’t tell the medical student, but that would also be a problem,” Dr. Ubel said. “The medical student should be informed that permission was given. This helps them be sensitive to the need to get consent.”
In a 2019 survey of medical students, 92% said they performed a pelvic exam on an anesthetized female patient, and of those, 61% did so without explicit patient consent.
The survey – involving 101 medical students at seven U.S. medical schools – also found that 11% of the medical students said they were extremely uncomfortable with the practice. But nearly one-third of the medical students said that opting out might jeopardize their grades and future careers.
“I tried to opt out once from doing a pelvic exam when I hadn’t met the patient beforehand,” one of them wrote. “The resident told me no.”
Some physicians defend the practice
Why do many medical students and doctors think that getting consent for pelvic exams is not necessary?
Some argue that patients implicitly give consent when they walk through the doors of a teaching hospital. “Sorry, but you inherently agree to that when you’re seen in an academic teaching hospital,” wrote one participant in a Student Doctor Network forum. “You agree to have residents and medical students participate in your care, not just an attending. If you just want an attending, then you are free to go to a nonteaching hospital. That’s the deal.”
Others argued that since the anesthetized patient couldn’t feel what was going on, it shouldn’t matter. “Things like pelvic exams, rectal exams, or even heroic trauma surgery occur for training purposes when there is no memory, no sensation and no harm to be done [and] society gains a better practitioner of the art of medicine,” a physician in Columbus, Ohio, wrote on Quora, an online forum.
Some doctors argue that they don’t ask for specific consent when they touch a variety of other body parts, and pelvic exams should be no different. Pelvic exams are needed before surgery of the pelvic area, but they have also been given to women undergoing surgery in a different part of the body.
In 2019 a woman told Deseret News in Utah that she had been recovering from stomach surgery when a resident physician mentioned something she had noticed “when we looked at your cervix.” When she asked why the physician had examined her cervix to prepare for stomach surgery, “no one could give her a good answer.”
A ‘positive goal’ doesn’t make it okay
What is missing in many defenses of the practice is any recognition that genitals are the most intimate part of the body, and that a patient’s desire for privacy ought to come first. In a survey of women undergoing gynecologic surgery, 72% expected to be asked for consent before medical students undertook pelvic examinations under anesthesia.
Overruling patients’ concerns about their own privacy is unethical, said Eli Y. Adashi, MD, professor of medical science and former dean of medicine and biological sciences at Brown University, Providence, R.I.
Dr. Adashi said the principle of patient autonomy in medical ethics directs that patients must be involved in decision-making about their care – even when caretakers are pursuing a positive goal, such as helping to educate future doctors.
“Conducting pelvic exams on unconscious women without their specific consent is simply untenable and never has been tenable, and it ought to be discontinued if it hasn’t been already,” says Dr. Adashi, who wrote an opinion piece on the issue for JAMA.
Furthermore, it has been shown that ignoring the need to get consent for pelvic exams makes physicians less concerned about getting patient consent in general. A study led by Dr. Ubel found that medical students who had completed an ob.gyn. clerkship thought getting patients’ consent was significantly less important than those who had not completed that clerkship.
Why give pelvic exams to anesthetized women?
Despite the controversy, a number of medical educators continue to direct medical students to perform pelvic exams on anesthetized women. Why is that?
“Pelvic exams are not easy to do,” Dr. Hammoud said. “Learners need to keep working on them; they have to do a lot of them in order to do them well.”
To teach pelvic exams, most medical schools provide standardized patients – paid volunteers who submit to exams and critique the medical student’s work afterwards – but these encounters are limited because of their cost, says Guy Benrubi, MD, professor and emeritus chair of the department of obstetrics and gynecology at the University of Florida, Jacksonville.
He said teaching programs therefore need to supplement exams on standardized patients with exams on unpaid volunteers who provide consent. Programs prefer anesthetized patients, Dr. Benrubi said, because they are easier for novices to work on. “With patients under anesthesia, the muscles are relaxed and it’s easier for learners to detect organs. All the same, you need to get consent.”
Teaching institutions stiffen consent requirements
Faced with growing opposition to pelvic exams without consent, teaching institutions as well as gynecologic educators have recently been tightening their policies.
Dr. Hammoud said she has always informed patients orally about the possibility of medical students performing pelvic exams on them, but now some institutions, including her own, want a more involved process. The university recently began consent in writing for pelvic exams.
In addition, the university also now requires that medical students meet patients before performing pelvic exams and that teaching physicians explain the students’ involvement.
Dr. Hammoud said some institutions now require a separate consent form for pelvic exams, but the University of Michigan simply directs that the possibility of the patient getting a pelvic exam be part of the consent form.
This requirement, called “explicit consent,” was endorsed by APGO. It differs from having a separate consent form for pelvic exams, which would highlight the possibility of a pelvic exam, as many women’s rights activists are calling for.
Why not have a separate form? Dr. Hammoud is concerned that it would unnecessarily alarm patients. “When you point out a certain issue, you’re in effect saying to the patient that this is not normal,” she said, noting that, when asked for consent to do the exams, most women agree to it.
New wave of state laws prompted by renewed concerns
Dr. Hammoud thinks the laws are unnecessary. “These laws are excessive for the vast majority of physicians who practice ethically. The profession should come up with its own standards rather than having a plethora of laws.”
Several of the more recent laws have a broader scope than the original laws. The original laws simply state that medical students or physicians must get informed consent, but they did not stipulate how informed consent should be obtained. (The laws also typically prohibit pelvic exams when surgery will be in a different area of the body.)
The new laws often follow this format, but some go well beyond it. Some also apply to rectal exams (Maine and Maryland), to men as well as women (Utah and Maryland) requires separate consent (Utah), and require consent for all pelvic exams (Florida).
The struggle over Florida’s law
The original Florida bill was drafted in 2019 by state Sen. Lauren Book, a Democrat who is a victims’ rights advocate working with women who have undergone sexual trauma. In written comments for this article, she says not getting consent for pelvic exams is still going on.
“This disturbing practice is commonplace at medical schools and teaching hospitals across the country – including several Florida universities, based on accounts from current and former medical students and faculty,” Sen. Book stated. “At best, these exams have been wrongful learning experiences for medical students or at worst, the equivalent of a sexual assault.”
Dr. Ubel took exception to linking the teaching activities to sexual assault. “I understand why many women would be horrified by this practice, but it’s not as bad as it seems,” he said. “There is nothing sexual or prurient about these exams, and they are motivated purely by a desire to teach people to be better doctors. That said, patients have the right to say, ‘I don’t want it done to me.’ ”
In early 2020, Dr. Benrubi was part of a coalition of medical groups that was trying to influence Sen. Book’s bill as it went through the legislature. Sen. Book’s original bill was relatively mild, “but then, late in the process, it was changed into a more sweeping bill with some unclear language,” he said.
The final version was passed and signed into law by Gov. Ron DeSantis, a conservative Republican, in June.
Dr. Benrubi said that a large number of state legislators, including Sen. Book, have been agreeable to fixing the bill. This was supposed to happen in a special session in the fall, but that never materialized, and so the fix will have to wait until the regular session in early 2021.
“The law should not apply to patients undergoing routine pelvic exams,” Dr. Benrubi said. “It should only apply to women patients under anesthesia.”
But while organized medicine wants to walk back the law, Dr. Book wants to expand it. “This upcoming session, I look forward to working with physicians to continue to hone this new law, and to work toward inclusion for males. Everyone has a right to consent.”
A version of this article first appeared on Medscape.com.
“When I was doing ob.gyn. as a med student, the attending would have me do a pelvic right after the patient was under and before we started surgery,” said one participant in an online forum. “We didn’t exactly get permission but it was for teaching purposes.”
Yet others don’t see what the commotion is about. “There are a hundred things that are done during a surgery that don’t require your specific consent (some of them much more ‘humiliating’ than a pelvic exam). ... There’s not really much left to be shy about during a gyn/rectal/prostate surgery, let me put it that way,” one doctor wrote.
However, many physicians are adamantly opposed to the practice, and laws intended to stop or limit it are being enacted throughout the nation.
Renewed concerns have prompted new state laws
A few states have required consent for pelvic exams for many years, beginning with California in 2003. But up until 2019, providing pelvic exams without informed consent was illegal in only six states.
Continuing reports of unauthorized pelvic exams indicate that the practice has not disappeared. University of Michigan professor Maya M. Hammoud, MD, past president of the Association of Professors of Gynecology and Obstetrics, and many others attribute renewed interest in the issue to a 2018 article in the journal Bioethics by Phoebe Friesen, a medical ethicist at McGill University, Montreal, that laid out the ethical arguments against the practice.
Starting in 2019, an outpouring of new state bills have been introduced, and nine more states have passed laws. In addition, 14 other states considered similar bills but did not pass them, in some cases because teaching institutions argued that they were already dealing with the issue. This happened in Connecticut and Massachusetts, after representatives of Yale University, New Haven, Conn., met with legislators.
Laws against the practice have been passed by 15 states, including California, Florida, Illinois, and New York. Some teaching institutions have recently been clamping down on the practice, while many teaching physicians insist that at this point, it has all but ended.
A practice that may still continue
For many years, ethicists, women’s rights groups, state legislators, and organized medicine have been trying to eliminate the practice of unauthorized pelvic exams by medical students. Several key medical groups have come out against it, including the American Medical Association, the Association of American Medical Colleges, and the American College of Obstetricians and Gynecologists.
“Fifteen years ago, studies found a substantial number of cases, but my sense is that most of that has stopped,” said Dr. Hammoud.
Yet despite these changes, there are some disturbing signs that the practice persists.
“I don’t have data, but anecdotally I see it still going on,” said Peter Ubel, MD, a professor at Duke University, Durham, N.C., who was involved in one of those early studies. “Every so often when I’m making a speech, a medical student tells me about performing a pelvic exam without getting permission.
“Perhaps in some cases the attending [physician] did get permission and didn’t tell the medical student, but that would also be a problem,” Dr. Ubel said. “The medical student should be informed that permission was given. This helps them be sensitive to the need to get consent.”
In a 2019 survey of medical students, 92% said they performed a pelvic exam on an anesthetized female patient, and of those, 61% did so without explicit patient consent.
The survey – involving 101 medical students at seven U.S. medical schools – also found that 11% of the medical students said they were extremely uncomfortable with the practice. But nearly one-third of the medical students said that opting out might jeopardize their grades and future careers.
“I tried to opt out once from doing a pelvic exam when I hadn’t met the patient beforehand,” one of them wrote. “The resident told me no.”
Some physicians defend the practice
Why do many medical students and doctors think that getting consent for pelvic exams is not necessary?
Some argue that patients implicitly give consent when they walk through the doors of a teaching hospital. “Sorry, but you inherently agree to that when you’re seen in an academic teaching hospital,” wrote one participant in a Student Doctor Network forum. “You agree to have residents and medical students participate in your care, not just an attending. If you just want an attending, then you are free to go to a nonteaching hospital. That’s the deal.”
Others argued that since the anesthetized patient couldn’t feel what was going on, it shouldn’t matter. “Things like pelvic exams, rectal exams, or even heroic trauma surgery occur for training purposes when there is no memory, no sensation and no harm to be done [and] society gains a better practitioner of the art of medicine,” a physician in Columbus, Ohio, wrote on Quora, an online forum.
Some doctors argue that they don’t ask for specific consent when they touch a variety of other body parts, and pelvic exams should be no different. Pelvic exams are needed before surgery of the pelvic area, but they have also been given to women undergoing surgery in a different part of the body.
In 2019 a woman told Deseret News in Utah that she had been recovering from stomach surgery when a resident physician mentioned something she had noticed “when we looked at your cervix.” When she asked why the physician had examined her cervix to prepare for stomach surgery, “no one could give her a good answer.”
A ‘positive goal’ doesn’t make it okay
What is missing in many defenses of the practice is any recognition that genitals are the most intimate part of the body, and that a patient’s desire for privacy ought to come first. In a survey of women undergoing gynecologic surgery, 72% expected to be asked for consent before medical students undertook pelvic examinations under anesthesia.
Overruling patients’ concerns about their own privacy is unethical, said Eli Y. Adashi, MD, professor of medical science and former dean of medicine and biological sciences at Brown University, Providence, R.I.
Dr. Adashi said the principle of patient autonomy in medical ethics directs that patients must be involved in decision-making about their care – even when caretakers are pursuing a positive goal, such as helping to educate future doctors.
“Conducting pelvic exams on unconscious women without their specific consent is simply untenable and never has been tenable, and it ought to be discontinued if it hasn’t been already,” says Dr. Adashi, who wrote an opinion piece on the issue for JAMA.
Furthermore, it has been shown that ignoring the need to get consent for pelvic exams makes physicians less concerned about getting patient consent in general. A study led by Dr. Ubel found that medical students who had completed an ob.gyn. clerkship thought getting patients’ consent was significantly less important than those who had not completed that clerkship.
Why give pelvic exams to anesthetized women?
Despite the controversy, a number of medical educators continue to direct medical students to perform pelvic exams on anesthetized women. Why is that?
“Pelvic exams are not easy to do,” Dr. Hammoud said. “Learners need to keep working on them; they have to do a lot of them in order to do them well.”
To teach pelvic exams, most medical schools provide standardized patients – paid volunteers who submit to exams and critique the medical student’s work afterwards – but these encounters are limited because of their cost, says Guy Benrubi, MD, professor and emeritus chair of the department of obstetrics and gynecology at the University of Florida, Jacksonville.
He said teaching programs therefore need to supplement exams on standardized patients with exams on unpaid volunteers who provide consent. Programs prefer anesthetized patients, Dr. Benrubi said, because they are easier for novices to work on. “With patients under anesthesia, the muscles are relaxed and it’s easier for learners to detect organs. All the same, you need to get consent.”
Teaching institutions stiffen consent requirements
Faced with growing opposition to pelvic exams without consent, teaching institutions as well as gynecologic educators have recently been tightening their policies.
Dr. Hammoud said she has always informed patients orally about the possibility of medical students performing pelvic exams on them, but now some institutions, including her own, want a more involved process. The university recently began consent in writing for pelvic exams.
In addition, the university also now requires that medical students meet patients before performing pelvic exams and that teaching physicians explain the students’ involvement.
Dr. Hammoud said some institutions now require a separate consent form for pelvic exams, but the University of Michigan simply directs that the possibility of the patient getting a pelvic exam be part of the consent form.
This requirement, called “explicit consent,” was endorsed by APGO. It differs from having a separate consent form for pelvic exams, which would highlight the possibility of a pelvic exam, as many women’s rights activists are calling for.
Why not have a separate form? Dr. Hammoud is concerned that it would unnecessarily alarm patients. “When you point out a certain issue, you’re in effect saying to the patient that this is not normal,” she said, noting that, when asked for consent to do the exams, most women agree to it.
New wave of state laws prompted by renewed concerns
Dr. Hammoud thinks the laws are unnecessary. “These laws are excessive for the vast majority of physicians who practice ethically. The profession should come up with its own standards rather than having a plethora of laws.”
Several of the more recent laws have a broader scope than the original laws. The original laws simply state that medical students or physicians must get informed consent, but they did not stipulate how informed consent should be obtained. (The laws also typically prohibit pelvic exams when surgery will be in a different area of the body.)
The new laws often follow this format, but some go well beyond it. Some also apply to rectal exams (Maine and Maryland), to men as well as women (Utah and Maryland) requires separate consent (Utah), and require consent for all pelvic exams (Florida).
The struggle over Florida’s law
The original Florida bill was drafted in 2019 by state Sen. Lauren Book, a Democrat who is a victims’ rights advocate working with women who have undergone sexual trauma. In written comments for this article, she says not getting consent for pelvic exams is still going on.
“This disturbing practice is commonplace at medical schools and teaching hospitals across the country – including several Florida universities, based on accounts from current and former medical students and faculty,” Sen. Book stated. “At best, these exams have been wrongful learning experiences for medical students or at worst, the equivalent of a sexual assault.”
Dr. Ubel took exception to linking the teaching activities to sexual assault. “I understand why many women would be horrified by this practice, but it’s not as bad as it seems,” he said. “There is nothing sexual or prurient about these exams, and they are motivated purely by a desire to teach people to be better doctors. That said, patients have the right to say, ‘I don’t want it done to me.’ ”
In early 2020, Dr. Benrubi was part of a coalition of medical groups that was trying to influence Sen. Book’s bill as it went through the legislature. Sen. Book’s original bill was relatively mild, “but then, late in the process, it was changed into a more sweeping bill with some unclear language,” he said.
The final version was passed and signed into law by Gov. Ron DeSantis, a conservative Republican, in June.
Dr. Benrubi said that a large number of state legislators, including Sen. Book, have been agreeable to fixing the bill. This was supposed to happen in a special session in the fall, but that never materialized, and so the fix will have to wait until the regular session in early 2021.
“The law should not apply to patients undergoing routine pelvic exams,” Dr. Benrubi said. “It should only apply to women patients under anesthesia.”
But while organized medicine wants to walk back the law, Dr. Book wants to expand it. “This upcoming session, I look forward to working with physicians to continue to hone this new law, and to work toward inclusion for males. Everyone has a right to consent.”
A version of this article first appeared on Medscape.com.
Would it be smart to sell your medical practice now?
The COVID-19 pandemic has decimated the bottom lines of many private practices, prompting physician-owners to seriously contemplate selling.
Physician-owners have had to sell at lower prices, reflecting lower cash flow under COVID-19. But sales prices may rebound following news on Nov. 9 that a COVID-19 vaccine candidate produced by Pfizer and its German partner, BioNTech, may be ready for initial distribution before the end of the year.
“There are a lot of ifs still, but if things go according to expectations, we may see an increase in the value of practices,” said Mark O. Dietrich, a CPA in Framingham, Mass., who deals mostly with valuations of physician practices.
“Practice valuations have been lower because many patients have kept away and cash flow has been reduced,” Mr. Dietrich said. “But once patients feel safe, that barrier would be removed, and cash flow, which sales prices are generally based on, could rise. However, this may take a while. One major hurdle would be getting people to take the vaccine.”
Many doctors have been contemplating closing
The nation is currently undergoing a significant spike in COVID-19 hospitalizations, which could prompt another COVID-19–related downturn in practice volume, as occurred earlier in the year. That downturn forced many private practitioners to contemplate selling their practices.
In a survey released this summer by McKinsey & Company, 53% of independent physicians reported that they were worried about their practices surviving. Although many physicians have now reopened their offices, patient volume is reduced, and physicians are earning far less than before.
“In many cases, physicians who had been considering retirement in the next few years have moved their planning up and want to sell as soon as possible,” said John D. Fanburg, an attorney at Brach Eichler, a law firm in Roseland, N.J., who specializes in medical practice sales and mergers.
“For physicians over age 65, it’s not just worries about finances; it’s also worries about the health risks of staying open,” Mr. Fanburg added.
Mid-career physicians are also selling their practices. Many of them become employees of the hospital, large practice, or private-equity firm that bought the practice – receiving a level of compensation set by the sales agreement.
Will your practice be hard to sell?
With so many physicians ready to sell, are there enough potential buyers to acquire them all? Probably not, said Mr. Dietrich.
“Many hospitals may not need new practices right now,” he said. “In the depths of the pandemic, they furloughed many of their existing doctors and may not have brought all of them back yet.”
In fact, because of the pandemic, some buyers have delayed sales that were already in progress, said Monica H. Kaden, director of business valuations at Sobel Valuations, based in Livingston, N.J.
“Buyers are not only worried about their own cash flow but also about the possibility of lower revenues of the selling practices due to COVID-19,” she said, citing a very large multispecialty group that has put its purchase of a another large multispecialty group on hold.
Practice values have (temporarily) fallen
Many potential buyers are still looking, though. One thing that drives them is the possibility of discounted sales because of COVID-19. “The sense I get is that a lot of hospitals see this as an opportunity to pick up practices on the cheap,” Mr. Dietrich said.
COVID-19 has been reducing practice values somewhat, said Reed Tinsley, a CPA in Houston who performs medical practice valuations and runs a practice brokerage firm. “Practice revenues and net income are lower under COVID-19, so prices are lower.”
Ms. Kadan advised physicians to hold off selling if they can afford to wait. “It’s always best to sell when the practice volume looks the best, because then the practice is worth more. But there are doctors who can’t wait because revenues are really falling and they are running out of money. They may have no choice but to sell.”
Even in the best of times, not all practices can be sold, said Sean Tinsley, a broker and licensed financial adviser at Tinsley Medical Practice Brokers in Austin, Tex., which he runs with his father, Reed Tinsley.
“We turn down about as many deals to sell practices as we accept,” he said. “Brokers have to be very selective because we don’t get paid until the practice gets sold. Generally, we won’t take practices in rural areas or practices that still only have a fraction of their pre–COVID-19 volume.”
How long will it take to sell your practice?
Some practices find a buyer within weeks, but in other cases, it can take as long as a year, he said. Once the buyer is located, preparing the paperwork for the sale can take 45-60 days.
Doctors can sell their practices on their own, but a broker can help them find potential buyers and select the right price. Business brokers generally receive a greater percentage of the sales price than residential brokers. They have greater command of business and finance, and the sale is more complex than a residential sale.
The broker may also help with selling the building where the practice is located, which is usually a separate sale, said Bruce E. Wood, an attorney at CCB Law in Syracuse, N.Y., who deals with practice sales. “A hospital buying your practice may not want to buy the building, so it has to be sold separately. You can always sell the space to a different buyer.”
What’s the right price for your practice?
For small practices, brokers often set a price by establishing a multiple, such as two times net earnings, Sean Tinsley said. In many cases, practices haven’t retained net earnings, so the broker uses gross annual revenue and sets the price at 50%-55% of that figure.
An alternative that is widely used in the business world and for many large practices is to base the price on earnings before interest, taxes, depreciation, and amortization (EBITDA). To determine a price, the EBITDA is then multiplied by a particular multiple, which depends on the perceived value of the practice.
Higher multiples go to practices that have a qualified management team, have documented financial policies and procedures, or have had significant past growth. Generally, the multiple of EBITDA at smaller practices is 1 or 2; larger practices have a multiple of 5-7 times EBITDA, Sean Tinsley said.
COVID-19 has had the effect of reducing the multiple somewhat. “As market forces shift from a seller’s market to a buyer’s market, multiples will likely remain below pre–COVID-19 levels for the remainder of 2020 and the first half of 2021,” one report stated.
Certified valuators like Reed Tinsley have more complex ways to establish the value of a practice, but as a broker, Sean Tinsley tends to use the multiples approach. He asserted that the prices derived from this method are on the mark. “Almost all the time we sell at the asking price.”
Using valuations to set the price
A more complex and expensive way to set a price for a practice is to order a valuation of the practice. The valuator issues a report that runs dozens of pages and costs thousands of dollars.
Mr. Fanburg said that very few physicians selling practices order valuation reports, owing to the cost and complexity. As a result, “they don’t have a clear idea what their practices are worth.”
A comprehensive report is called a conclusion of value. The amount it finds – expressed as a range – is called “fair market value.” The report can be used in the courts for legal disputes as well as for deriving a sales price.
Practices that don’t want to pay for a conclusion of value can ask a valuator to assemble a less extensive report, called an opinion of calculated value. Also known as a calculation engagement or engagement letter, it still costs several thousand dollars.
This report has limited validity and can’t be used in the courts, according to Jarrod Barraza, a certified valuator in the Nashville, Tenn., office of Horne, a health care business valuator. “When I issue an engagement letter, I am not talking as an appraiser but as a valuation consultant, and I don’t call the result fair market value; it’s only estimating,” he said.
For all of the precision of formal reports, however, valuations of a practice can vary widely, according to Reed Tinsley. “Two valuations using the same methodology can differ by $300,000.”
Also, the valuation can be well above a reasonable asking price, said Sean Tinsley. “The market dictates the price. A traditional valuation almost invariably quotes a higher return than the market is willing to pay.”
Buyers’ valuations
Physicians who decide not to get a valuation still have to deal with valuations ordered by buyers. Hospitals and large practices often order valuations of the practices they want to buy, and private-equity firms use methods much like a valuation for the practices they are interested in.
Buyers rarely share the valuation report with the seller, so the seller has to accept the buyer’s price without being able to review the thought process behind it, Mr. Fanburg said. “Relying on the buyer to tell you what you’re worth means you may sell your practice well below its true value.”
When the buyer orders a valuation, the valuator interviews managers of the practice and asks for a great deal of information, says G. Don Barbo, managing director at VMG Health, a health care valuation firm based in Dallas.
Mr. Barbo said these documents include financial statements for the practice, usually going back 3-5 years; productivity reports for doctors and other providers; accounts receivables; reports of fixed assets; a roster of employees; employment agreements and management services agreements; reports on payer mix; facility leases and equipment lease agreements; budgets and projections; and tax returns.
Mr. Dietrich said valuators hone in on the practice’s current procedural terminology codes. “If the practice is coding too high, this would artificially increase the profit and purported value of the practice. For example, coding at 99214 rather than 99213 for an established patient means that the practice is being paid 45% more for each visit.” The valuator then reduces the value of the practice on the basis of the extent of the improper up-coding.
Mr. Barbo said some sellers don’t want all the scrutiny of the buyer’s valuation and just sell the practice’s tangible assets – furnishings, fixtures, and equipment – which do not require a great deal of documentation but yield a much lower price.
A primer on valuations
As a valuator, “my job is to project into the future,” Mr. Barraza said. “I am trying to see how the practice will fare going forward.”
Mr. Dietrich agreed, with one caveat: “As Yogi Berra said: ‘It’s difficult to make predictions, especially about the future.’ ”
The formal valuation assesses the practice in three ways: measuring income, assets, and what other practices sell for, called the market approach.
With the income approach, the most used measurement for practices, one tries to determine future income, which is what buyers are most interested in, Mr. Dietrich said. The income equals revenue (total collections) minus operating expenses and overhead.
“You are then left with all the money the physician is paid,” he said. “The issue is, how much is attributed to the physician’s own labor and how much to his or her ownership of the practice? This second category helps determine the value of the practice.”
The market approach is often used as a way to double-check the accuracy of the income approach. The appraiser looks for the prices of similar practices that have already been sold and then adjusts the price on the basis of differences with the practice up for sale.
The asset approach may be used when the practice has no positive cash flow. It establishes a price for tangible assets, which are often much lower in value than the values that the other approaches come up with. The asset approach can be a lower-priced alternative for practices that can’t be measured under the income or market approach.
“Equipment appraisers can do an inventory of your equipment,” Mr. Wood said. “Generally, equipment that is more than 3 years old, such as computers, is not that valuable, but an ultrasound machine probably has some resale value.”
Will the buyer pay for goodwill?
Many practice owners hope they can get money for the “goodwill” of their practice when they sell. Goodwill basically represents the reputation of the practice, which is difficult to pinpoint, and Mr. Wood said buyers often don’t want to pay for it.
“The goodwill is a wild card,” Mr. Wood said. “It can range from zero to crazy numbers. There is a Goodwill Registry – a list of the goodwill in other practice sales – that you can consult.”
One simple way to calculate the goodwill, he said, is to take the value of the practice based on examining income and remove the value of tangible assets. What is left is considered the goodwill.
Another form of intangible asset that is sometimes lumped together with goodwill is the value of the practice’s trained staff. “Some buyers agree to pay for the staff in place, because they plan to use that staff,” Ms. Kadan said. In one large deal she was involved with, the buyer agreed to pay something for the selling practice’s staff of 180 people.
Another item that buyers also do not typically pay for is the practice’s accounts receivable. They may also not pay for any liabilities the practice holds, such as the facility lease, equipment lease, and maintenance contracts, Mr. Barbo said. “The buyer then often stipulates that all liabilities are left to the practice, or stipulates any specific liabilities that it may assume.”
Selling to other doctors
Doctors can sell practices or shares in practices to other doctors. A retiring physician, for example, can sell his or her share to the other partners. A valuator may be brought in to establish the value of the doctor’s equity interest in the practice.
“Generally, practice buyouts aren’t lucrative for selling physician,” Mr. Wood said. “There are exceptions, of course, such as specialty practices in some cases.”
A practice can also be sold to a new doctor or to a previously employed physician who wants to be an owner. These physicians usually need to get a bank loan to buy the practice.
The bank assesses the finances of the selling practice to determine whether the buying physician will earn enough money to pay back the loan. “Banks don’t want lend more than the gross annual revenue of the practice, and some banks will only lend at 65% of gross annual revenue,” Sean Tinsley said.
COVID-19 has seriously affected banks’ lending decisions. Banks stopped lending to practice buyers at the beginning of the pandemic, and when they started lending again, they were more cautious, Sean Tinsley said. “Generally, banks want to see the practice at 85%-90% of pre–COVID-19 numbers before they make a loan.”
He added that, if a buyer can’t get a bank loan, the selling doctor may decide to finance the sale. The buyer agrees to a payment schedule to pay off the full price over several years.
Selling to or merging with other practices
The usual buyer is another practice, Reed Tinsley said. “You can sell to a group, but prices are low because, with COVID-19, buyers don’t want to incur a lot of money up front. Or you can merge with the practice, which means the selling doctor usually doesn’t get any money, but he does get a share in the larger practice. In that case, the partnership is the object of value, and it can be cashed out when the physician leaves the practice.”
Mergers can get very complicated. Mr. Fanburg said he has been working with seven groups that are merging into one. “The merger was scheduled to go live last January, but it was slowed down over negotiations about new managed care contracts and putting together a management structure, plus the groups were a little wary of each other. Now the deal is scheduled to go live next January.”
One advantage to selling to a larger entity, such as a big group practice or a hospital, is that the selling physician benefits from the higher reimbursement rates that large providers usually command. “If the buyer has more favorable reimbursement rates with insurers, it could pay the selling doctor much more than he is making now,” Mr. Barraza said.
Hospitals as buyers
Because of COVID-19, currently many hospitals don’t have money to buy more practices. However, this is most likely a temporary situation.
Hospitals typically offer less money than other buyers, according to Sean Tinsley. “We have never sold to a hospital, because hospitals generally don’t pay for goodwill. They pay for the practice assets and offer a dollar amount for each chart.”
Hospitals have to be careful not to pay physicians more than the usual amount for their practices, because the extra amount could be seen as a kickback for referrals, which would violate the federal Stark law and Anti-Kickback Statute. Not-for-profit hospitals also have to comply with regulations at the Internal Revenue Service.
Hospitals usually require that the selling physician continue to work in the practice after it is sold. The selling physician’s presence helps ensure that the practice’s output will not decline after sale. Although the sales price may be low, the hospital may make up for it by paying a higher compensation, Sean Tinsley said.
Selling to private-equity firms
Private-equity purchases are financed by investors who essentially want to “flip” practices – that is, they want to make them more profitable and then sell them to someone else. The private-equity firm starts by buying a “platform” practice, which forms the core of the venture. It then buys smaller practices that will be managed by the platform practice.
The number of private-equity deals increased continually through 2019, then plummeted in March because of COVID-19, but by the summer, activity began to rise again.
Physicians are very intrigued about selling to private-equity firms because they are known to pay the most for practices. But private-equity buyers focus on a fairly narrow group of specialties.
Generally, Sean Tinsley said, private-equity firms only look for pain, dermatology, and ophthalmology practices, but they have been starting to branch out to specialties such as gastroenterology. In 2018, there were only two private-equity deals for gastroenterology practices, but in 2019, there were 16, according to one assessment.
Private-equity firms buy very few of the practices they initially review, according to Mr. Fanburg. “Private equity negotiates with dozens or even hundreds of physician practices at a time, with only 1%-5% of those practices actually being acquired.”
The private-equity firm’s upfront payment to selling physicians is quite high, but then the physicians become employees of the new group and earn much less in compensation than they earned on this own.
“In order for the venture to get any value out of the acquisition, the doctors have to make less going forward than they did historically,” Mr. Dietrich said. That freed-up money boosts the value of the venture.
When the platform practice is sold – usually after 5 years or so – “chances are the management team will be replaced,” Mr. Fanburg said. “There could be new policies and objectives, which could mean a bumpy ride for physicians.”
Do you really want to sell?
“When a group of physicians comes to me asking for help selling their practice, my first question is, Why are you doing this?” Mr. Fanburg said. “You need a better reason for selling than just the money.
“Once you make the leap, there is a certain amount of autonomy you lose,” he continued. “The sale gives you an economic boost, but it may not be enough for the long haul. If you stay on with the buyer, your compensation is often lower. That makes sense if you’re retiring, but not if you’re a younger physician with many years of practice in the years ahead.
“When physicians say they see no other way out except to sell,” Mr. Fanburg said, “I tell them that their buyer will see a path to future growth for your practice. If you think reimbursements are getting worse, why are the buyers pressing ahead?”
A version of this article originally appeared on Medscape.com.
The COVID-19 pandemic has decimated the bottom lines of many private practices, prompting physician-owners to seriously contemplate selling.
Physician-owners have had to sell at lower prices, reflecting lower cash flow under COVID-19. But sales prices may rebound following news on Nov. 9 that a COVID-19 vaccine candidate produced by Pfizer and its German partner, BioNTech, may be ready for initial distribution before the end of the year.
“There are a lot of ifs still, but if things go according to expectations, we may see an increase in the value of practices,” said Mark O. Dietrich, a CPA in Framingham, Mass., who deals mostly with valuations of physician practices.
“Practice valuations have been lower because many patients have kept away and cash flow has been reduced,” Mr. Dietrich said. “But once patients feel safe, that barrier would be removed, and cash flow, which sales prices are generally based on, could rise. However, this may take a while. One major hurdle would be getting people to take the vaccine.”
Many doctors have been contemplating closing
The nation is currently undergoing a significant spike in COVID-19 hospitalizations, which could prompt another COVID-19–related downturn in practice volume, as occurred earlier in the year. That downturn forced many private practitioners to contemplate selling their practices.
In a survey released this summer by McKinsey & Company, 53% of independent physicians reported that they were worried about their practices surviving. Although many physicians have now reopened their offices, patient volume is reduced, and physicians are earning far less than before.
“In many cases, physicians who had been considering retirement in the next few years have moved their planning up and want to sell as soon as possible,” said John D. Fanburg, an attorney at Brach Eichler, a law firm in Roseland, N.J., who specializes in medical practice sales and mergers.
“For physicians over age 65, it’s not just worries about finances; it’s also worries about the health risks of staying open,” Mr. Fanburg added.
Mid-career physicians are also selling their practices. Many of them become employees of the hospital, large practice, or private-equity firm that bought the practice – receiving a level of compensation set by the sales agreement.
Will your practice be hard to sell?
With so many physicians ready to sell, are there enough potential buyers to acquire them all? Probably not, said Mr. Dietrich.
“Many hospitals may not need new practices right now,” he said. “In the depths of the pandemic, they furloughed many of their existing doctors and may not have brought all of them back yet.”
In fact, because of the pandemic, some buyers have delayed sales that were already in progress, said Monica H. Kaden, director of business valuations at Sobel Valuations, based in Livingston, N.J.
“Buyers are not only worried about their own cash flow but also about the possibility of lower revenues of the selling practices due to COVID-19,” she said, citing a very large multispecialty group that has put its purchase of a another large multispecialty group on hold.
Practice values have (temporarily) fallen
Many potential buyers are still looking, though. One thing that drives them is the possibility of discounted sales because of COVID-19. “The sense I get is that a lot of hospitals see this as an opportunity to pick up practices on the cheap,” Mr. Dietrich said.
COVID-19 has been reducing practice values somewhat, said Reed Tinsley, a CPA in Houston who performs medical practice valuations and runs a practice brokerage firm. “Practice revenues and net income are lower under COVID-19, so prices are lower.”
Ms. Kadan advised physicians to hold off selling if they can afford to wait. “It’s always best to sell when the practice volume looks the best, because then the practice is worth more. But there are doctors who can’t wait because revenues are really falling and they are running out of money. They may have no choice but to sell.”
Even in the best of times, not all practices can be sold, said Sean Tinsley, a broker and licensed financial adviser at Tinsley Medical Practice Brokers in Austin, Tex., which he runs with his father, Reed Tinsley.
“We turn down about as many deals to sell practices as we accept,” he said. “Brokers have to be very selective because we don’t get paid until the practice gets sold. Generally, we won’t take practices in rural areas or practices that still only have a fraction of their pre–COVID-19 volume.”
How long will it take to sell your practice?
Some practices find a buyer within weeks, but in other cases, it can take as long as a year, he said. Once the buyer is located, preparing the paperwork for the sale can take 45-60 days.
Doctors can sell their practices on their own, but a broker can help them find potential buyers and select the right price. Business brokers generally receive a greater percentage of the sales price than residential brokers. They have greater command of business and finance, and the sale is more complex than a residential sale.
The broker may also help with selling the building where the practice is located, which is usually a separate sale, said Bruce E. Wood, an attorney at CCB Law in Syracuse, N.Y., who deals with practice sales. “A hospital buying your practice may not want to buy the building, so it has to be sold separately. You can always sell the space to a different buyer.”
What’s the right price for your practice?
For small practices, brokers often set a price by establishing a multiple, such as two times net earnings, Sean Tinsley said. In many cases, practices haven’t retained net earnings, so the broker uses gross annual revenue and sets the price at 50%-55% of that figure.
An alternative that is widely used in the business world and for many large practices is to base the price on earnings before interest, taxes, depreciation, and amortization (EBITDA). To determine a price, the EBITDA is then multiplied by a particular multiple, which depends on the perceived value of the practice.
Higher multiples go to practices that have a qualified management team, have documented financial policies and procedures, or have had significant past growth. Generally, the multiple of EBITDA at smaller practices is 1 or 2; larger practices have a multiple of 5-7 times EBITDA, Sean Tinsley said.
COVID-19 has had the effect of reducing the multiple somewhat. “As market forces shift from a seller’s market to a buyer’s market, multiples will likely remain below pre–COVID-19 levels for the remainder of 2020 and the first half of 2021,” one report stated.
Certified valuators like Reed Tinsley have more complex ways to establish the value of a practice, but as a broker, Sean Tinsley tends to use the multiples approach. He asserted that the prices derived from this method are on the mark. “Almost all the time we sell at the asking price.”
Using valuations to set the price
A more complex and expensive way to set a price for a practice is to order a valuation of the practice. The valuator issues a report that runs dozens of pages and costs thousands of dollars.
Mr. Fanburg said that very few physicians selling practices order valuation reports, owing to the cost and complexity. As a result, “they don’t have a clear idea what their practices are worth.”
A comprehensive report is called a conclusion of value. The amount it finds – expressed as a range – is called “fair market value.” The report can be used in the courts for legal disputes as well as for deriving a sales price.
Practices that don’t want to pay for a conclusion of value can ask a valuator to assemble a less extensive report, called an opinion of calculated value. Also known as a calculation engagement or engagement letter, it still costs several thousand dollars.
This report has limited validity and can’t be used in the courts, according to Jarrod Barraza, a certified valuator in the Nashville, Tenn., office of Horne, a health care business valuator. “When I issue an engagement letter, I am not talking as an appraiser but as a valuation consultant, and I don’t call the result fair market value; it’s only estimating,” he said.
For all of the precision of formal reports, however, valuations of a practice can vary widely, according to Reed Tinsley. “Two valuations using the same methodology can differ by $300,000.”
Also, the valuation can be well above a reasonable asking price, said Sean Tinsley. “The market dictates the price. A traditional valuation almost invariably quotes a higher return than the market is willing to pay.”
Buyers’ valuations
Physicians who decide not to get a valuation still have to deal with valuations ordered by buyers. Hospitals and large practices often order valuations of the practices they want to buy, and private-equity firms use methods much like a valuation for the practices they are interested in.
Buyers rarely share the valuation report with the seller, so the seller has to accept the buyer’s price without being able to review the thought process behind it, Mr. Fanburg said. “Relying on the buyer to tell you what you’re worth means you may sell your practice well below its true value.”
When the buyer orders a valuation, the valuator interviews managers of the practice and asks for a great deal of information, says G. Don Barbo, managing director at VMG Health, a health care valuation firm based in Dallas.
Mr. Barbo said these documents include financial statements for the practice, usually going back 3-5 years; productivity reports for doctors and other providers; accounts receivables; reports of fixed assets; a roster of employees; employment agreements and management services agreements; reports on payer mix; facility leases and equipment lease agreements; budgets and projections; and tax returns.
Mr. Dietrich said valuators hone in on the practice’s current procedural terminology codes. “If the practice is coding too high, this would artificially increase the profit and purported value of the practice. For example, coding at 99214 rather than 99213 for an established patient means that the practice is being paid 45% more for each visit.” The valuator then reduces the value of the practice on the basis of the extent of the improper up-coding.
Mr. Barbo said some sellers don’t want all the scrutiny of the buyer’s valuation and just sell the practice’s tangible assets – furnishings, fixtures, and equipment – which do not require a great deal of documentation but yield a much lower price.
A primer on valuations
As a valuator, “my job is to project into the future,” Mr. Barraza said. “I am trying to see how the practice will fare going forward.”
Mr. Dietrich agreed, with one caveat: “As Yogi Berra said: ‘It’s difficult to make predictions, especially about the future.’ ”
The formal valuation assesses the practice in three ways: measuring income, assets, and what other practices sell for, called the market approach.
With the income approach, the most used measurement for practices, one tries to determine future income, which is what buyers are most interested in, Mr. Dietrich said. The income equals revenue (total collections) minus operating expenses and overhead.
“You are then left with all the money the physician is paid,” he said. “The issue is, how much is attributed to the physician’s own labor and how much to his or her ownership of the practice? This second category helps determine the value of the practice.”
The market approach is often used as a way to double-check the accuracy of the income approach. The appraiser looks for the prices of similar practices that have already been sold and then adjusts the price on the basis of differences with the practice up for sale.
The asset approach may be used when the practice has no positive cash flow. It establishes a price for tangible assets, which are often much lower in value than the values that the other approaches come up with. The asset approach can be a lower-priced alternative for practices that can’t be measured under the income or market approach.
“Equipment appraisers can do an inventory of your equipment,” Mr. Wood said. “Generally, equipment that is more than 3 years old, such as computers, is not that valuable, but an ultrasound machine probably has some resale value.”
Will the buyer pay for goodwill?
Many practice owners hope they can get money for the “goodwill” of their practice when they sell. Goodwill basically represents the reputation of the practice, which is difficult to pinpoint, and Mr. Wood said buyers often don’t want to pay for it.
“The goodwill is a wild card,” Mr. Wood said. “It can range from zero to crazy numbers. There is a Goodwill Registry – a list of the goodwill in other practice sales – that you can consult.”
One simple way to calculate the goodwill, he said, is to take the value of the practice based on examining income and remove the value of tangible assets. What is left is considered the goodwill.
Another form of intangible asset that is sometimes lumped together with goodwill is the value of the practice’s trained staff. “Some buyers agree to pay for the staff in place, because they plan to use that staff,” Ms. Kadan said. In one large deal she was involved with, the buyer agreed to pay something for the selling practice’s staff of 180 people.
Another item that buyers also do not typically pay for is the practice’s accounts receivable. They may also not pay for any liabilities the practice holds, such as the facility lease, equipment lease, and maintenance contracts, Mr. Barbo said. “The buyer then often stipulates that all liabilities are left to the practice, or stipulates any specific liabilities that it may assume.”
Selling to other doctors
Doctors can sell practices or shares in practices to other doctors. A retiring physician, for example, can sell his or her share to the other partners. A valuator may be brought in to establish the value of the doctor’s equity interest in the practice.
“Generally, practice buyouts aren’t lucrative for selling physician,” Mr. Wood said. “There are exceptions, of course, such as specialty practices in some cases.”
A practice can also be sold to a new doctor or to a previously employed physician who wants to be an owner. These physicians usually need to get a bank loan to buy the practice.
The bank assesses the finances of the selling practice to determine whether the buying physician will earn enough money to pay back the loan. “Banks don’t want lend more than the gross annual revenue of the practice, and some banks will only lend at 65% of gross annual revenue,” Sean Tinsley said.
COVID-19 has seriously affected banks’ lending decisions. Banks stopped lending to practice buyers at the beginning of the pandemic, and when they started lending again, they were more cautious, Sean Tinsley said. “Generally, banks want to see the practice at 85%-90% of pre–COVID-19 numbers before they make a loan.”
He added that, if a buyer can’t get a bank loan, the selling doctor may decide to finance the sale. The buyer agrees to a payment schedule to pay off the full price over several years.
Selling to or merging with other practices
The usual buyer is another practice, Reed Tinsley said. “You can sell to a group, but prices are low because, with COVID-19, buyers don’t want to incur a lot of money up front. Or you can merge with the practice, which means the selling doctor usually doesn’t get any money, but he does get a share in the larger practice. In that case, the partnership is the object of value, and it can be cashed out when the physician leaves the practice.”
Mergers can get very complicated. Mr. Fanburg said he has been working with seven groups that are merging into one. “The merger was scheduled to go live last January, but it was slowed down over negotiations about new managed care contracts and putting together a management structure, plus the groups were a little wary of each other. Now the deal is scheduled to go live next January.”
One advantage to selling to a larger entity, such as a big group practice or a hospital, is that the selling physician benefits from the higher reimbursement rates that large providers usually command. “If the buyer has more favorable reimbursement rates with insurers, it could pay the selling doctor much more than he is making now,” Mr. Barraza said.
Hospitals as buyers
Because of COVID-19, currently many hospitals don’t have money to buy more practices. However, this is most likely a temporary situation.
Hospitals typically offer less money than other buyers, according to Sean Tinsley. “We have never sold to a hospital, because hospitals generally don’t pay for goodwill. They pay for the practice assets and offer a dollar amount for each chart.”
Hospitals have to be careful not to pay physicians more than the usual amount for their practices, because the extra amount could be seen as a kickback for referrals, which would violate the federal Stark law and Anti-Kickback Statute. Not-for-profit hospitals also have to comply with regulations at the Internal Revenue Service.
Hospitals usually require that the selling physician continue to work in the practice after it is sold. The selling physician’s presence helps ensure that the practice’s output will not decline after sale. Although the sales price may be low, the hospital may make up for it by paying a higher compensation, Sean Tinsley said.
Selling to private-equity firms
Private-equity purchases are financed by investors who essentially want to “flip” practices – that is, they want to make them more profitable and then sell them to someone else. The private-equity firm starts by buying a “platform” practice, which forms the core of the venture. It then buys smaller practices that will be managed by the platform practice.
The number of private-equity deals increased continually through 2019, then plummeted in March because of COVID-19, but by the summer, activity began to rise again.
Physicians are very intrigued about selling to private-equity firms because they are known to pay the most for practices. But private-equity buyers focus on a fairly narrow group of specialties.
Generally, Sean Tinsley said, private-equity firms only look for pain, dermatology, and ophthalmology practices, but they have been starting to branch out to specialties such as gastroenterology. In 2018, there were only two private-equity deals for gastroenterology practices, but in 2019, there were 16, according to one assessment.
Private-equity firms buy very few of the practices they initially review, according to Mr. Fanburg. “Private equity negotiates with dozens or even hundreds of physician practices at a time, with only 1%-5% of those practices actually being acquired.”
The private-equity firm’s upfront payment to selling physicians is quite high, but then the physicians become employees of the new group and earn much less in compensation than they earned on this own.
“In order for the venture to get any value out of the acquisition, the doctors have to make less going forward than they did historically,” Mr. Dietrich said. That freed-up money boosts the value of the venture.
When the platform practice is sold – usually after 5 years or so – “chances are the management team will be replaced,” Mr. Fanburg said. “There could be new policies and objectives, which could mean a bumpy ride for physicians.”
Do you really want to sell?
“When a group of physicians comes to me asking for help selling their practice, my first question is, Why are you doing this?” Mr. Fanburg said. “You need a better reason for selling than just the money.
“Once you make the leap, there is a certain amount of autonomy you lose,” he continued. “The sale gives you an economic boost, but it may not be enough for the long haul. If you stay on with the buyer, your compensation is often lower. That makes sense if you’re retiring, but not if you’re a younger physician with many years of practice in the years ahead.
“When physicians say they see no other way out except to sell,” Mr. Fanburg said, “I tell them that their buyer will see a path to future growth for your practice. If you think reimbursements are getting worse, why are the buyers pressing ahead?”
A version of this article originally appeared on Medscape.com.
The COVID-19 pandemic has decimated the bottom lines of many private practices, prompting physician-owners to seriously contemplate selling.
Physician-owners have had to sell at lower prices, reflecting lower cash flow under COVID-19. But sales prices may rebound following news on Nov. 9 that a COVID-19 vaccine candidate produced by Pfizer and its German partner, BioNTech, may be ready for initial distribution before the end of the year.
“There are a lot of ifs still, but if things go according to expectations, we may see an increase in the value of practices,” said Mark O. Dietrich, a CPA in Framingham, Mass., who deals mostly with valuations of physician practices.
“Practice valuations have been lower because many patients have kept away and cash flow has been reduced,” Mr. Dietrich said. “But once patients feel safe, that barrier would be removed, and cash flow, which sales prices are generally based on, could rise. However, this may take a while. One major hurdle would be getting people to take the vaccine.”
Many doctors have been contemplating closing
The nation is currently undergoing a significant spike in COVID-19 hospitalizations, which could prompt another COVID-19–related downturn in practice volume, as occurred earlier in the year. That downturn forced many private practitioners to contemplate selling their practices.
In a survey released this summer by McKinsey & Company, 53% of independent physicians reported that they were worried about their practices surviving. Although many physicians have now reopened their offices, patient volume is reduced, and physicians are earning far less than before.
“In many cases, physicians who had been considering retirement in the next few years have moved their planning up and want to sell as soon as possible,” said John D. Fanburg, an attorney at Brach Eichler, a law firm in Roseland, N.J., who specializes in medical practice sales and mergers.
“For physicians over age 65, it’s not just worries about finances; it’s also worries about the health risks of staying open,” Mr. Fanburg added.
Mid-career physicians are also selling their practices. Many of them become employees of the hospital, large practice, or private-equity firm that bought the practice – receiving a level of compensation set by the sales agreement.
Will your practice be hard to sell?
With so many physicians ready to sell, are there enough potential buyers to acquire them all? Probably not, said Mr. Dietrich.
“Many hospitals may not need new practices right now,” he said. “In the depths of the pandemic, they furloughed many of their existing doctors and may not have brought all of them back yet.”
In fact, because of the pandemic, some buyers have delayed sales that were already in progress, said Monica H. Kaden, director of business valuations at Sobel Valuations, based in Livingston, N.J.
“Buyers are not only worried about their own cash flow but also about the possibility of lower revenues of the selling practices due to COVID-19,” she said, citing a very large multispecialty group that has put its purchase of a another large multispecialty group on hold.
Practice values have (temporarily) fallen
Many potential buyers are still looking, though. One thing that drives them is the possibility of discounted sales because of COVID-19. “The sense I get is that a lot of hospitals see this as an opportunity to pick up practices on the cheap,” Mr. Dietrich said.
COVID-19 has been reducing practice values somewhat, said Reed Tinsley, a CPA in Houston who performs medical practice valuations and runs a practice brokerage firm. “Practice revenues and net income are lower under COVID-19, so prices are lower.”
Ms. Kadan advised physicians to hold off selling if they can afford to wait. “It’s always best to sell when the practice volume looks the best, because then the practice is worth more. But there are doctors who can’t wait because revenues are really falling and they are running out of money. They may have no choice but to sell.”
Even in the best of times, not all practices can be sold, said Sean Tinsley, a broker and licensed financial adviser at Tinsley Medical Practice Brokers in Austin, Tex., which he runs with his father, Reed Tinsley.
“We turn down about as many deals to sell practices as we accept,” he said. “Brokers have to be very selective because we don’t get paid until the practice gets sold. Generally, we won’t take practices in rural areas or practices that still only have a fraction of their pre–COVID-19 volume.”
How long will it take to sell your practice?
Some practices find a buyer within weeks, but in other cases, it can take as long as a year, he said. Once the buyer is located, preparing the paperwork for the sale can take 45-60 days.
Doctors can sell their practices on their own, but a broker can help them find potential buyers and select the right price. Business brokers generally receive a greater percentage of the sales price than residential brokers. They have greater command of business and finance, and the sale is more complex than a residential sale.
The broker may also help with selling the building where the practice is located, which is usually a separate sale, said Bruce E. Wood, an attorney at CCB Law in Syracuse, N.Y., who deals with practice sales. “A hospital buying your practice may not want to buy the building, so it has to be sold separately. You can always sell the space to a different buyer.”
What’s the right price for your practice?
For small practices, brokers often set a price by establishing a multiple, such as two times net earnings, Sean Tinsley said. In many cases, practices haven’t retained net earnings, so the broker uses gross annual revenue and sets the price at 50%-55% of that figure.
An alternative that is widely used in the business world and for many large practices is to base the price on earnings before interest, taxes, depreciation, and amortization (EBITDA). To determine a price, the EBITDA is then multiplied by a particular multiple, which depends on the perceived value of the practice.
Higher multiples go to practices that have a qualified management team, have documented financial policies and procedures, or have had significant past growth. Generally, the multiple of EBITDA at smaller practices is 1 or 2; larger practices have a multiple of 5-7 times EBITDA, Sean Tinsley said.
COVID-19 has had the effect of reducing the multiple somewhat. “As market forces shift from a seller’s market to a buyer’s market, multiples will likely remain below pre–COVID-19 levels for the remainder of 2020 and the first half of 2021,” one report stated.
Certified valuators like Reed Tinsley have more complex ways to establish the value of a practice, but as a broker, Sean Tinsley tends to use the multiples approach. He asserted that the prices derived from this method are on the mark. “Almost all the time we sell at the asking price.”
Using valuations to set the price
A more complex and expensive way to set a price for a practice is to order a valuation of the practice. The valuator issues a report that runs dozens of pages and costs thousands of dollars.
Mr. Fanburg said that very few physicians selling practices order valuation reports, owing to the cost and complexity. As a result, “they don’t have a clear idea what their practices are worth.”
A comprehensive report is called a conclusion of value. The amount it finds – expressed as a range – is called “fair market value.” The report can be used in the courts for legal disputes as well as for deriving a sales price.
Practices that don’t want to pay for a conclusion of value can ask a valuator to assemble a less extensive report, called an opinion of calculated value. Also known as a calculation engagement or engagement letter, it still costs several thousand dollars.
This report has limited validity and can’t be used in the courts, according to Jarrod Barraza, a certified valuator in the Nashville, Tenn., office of Horne, a health care business valuator. “When I issue an engagement letter, I am not talking as an appraiser but as a valuation consultant, and I don’t call the result fair market value; it’s only estimating,” he said.
For all of the precision of formal reports, however, valuations of a practice can vary widely, according to Reed Tinsley. “Two valuations using the same methodology can differ by $300,000.”
Also, the valuation can be well above a reasonable asking price, said Sean Tinsley. “The market dictates the price. A traditional valuation almost invariably quotes a higher return than the market is willing to pay.”
Buyers’ valuations
Physicians who decide not to get a valuation still have to deal with valuations ordered by buyers. Hospitals and large practices often order valuations of the practices they want to buy, and private-equity firms use methods much like a valuation for the practices they are interested in.
Buyers rarely share the valuation report with the seller, so the seller has to accept the buyer’s price without being able to review the thought process behind it, Mr. Fanburg said. “Relying on the buyer to tell you what you’re worth means you may sell your practice well below its true value.”
When the buyer orders a valuation, the valuator interviews managers of the practice and asks for a great deal of information, says G. Don Barbo, managing director at VMG Health, a health care valuation firm based in Dallas.
Mr. Barbo said these documents include financial statements for the practice, usually going back 3-5 years; productivity reports for doctors and other providers; accounts receivables; reports of fixed assets; a roster of employees; employment agreements and management services agreements; reports on payer mix; facility leases and equipment lease agreements; budgets and projections; and tax returns.
Mr. Dietrich said valuators hone in on the practice’s current procedural terminology codes. “If the practice is coding too high, this would artificially increase the profit and purported value of the practice. For example, coding at 99214 rather than 99213 for an established patient means that the practice is being paid 45% more for each visit.” The valuator then reduces the value of the practice on the basis of the extent of the improper up-coding.
Mr. Barbo said some sellers don’t want all the scrutiny of the buyer’s valuation and just sell the practice’s tangible assets – furnishings, fixtures, and equipment – which do not require a great deal of documentation but yield a much lower price.
A primer on valuations
As a valuator, “my job is to project into the future,” Mr. Barraza said. “I am trying to see how the practice will fare going forward.”
Mr. Dietrich agreed, with one caveat: “As Yogi Berra said: ‘It’s difficult to make predictions, especially about the future.’ ”
The formal valuation assesses the practice in three ways: measuring income, assets, and what other practices sell for, called the market approach.
With the income approach, the most used measurement for practices, one tries to determine future income, which is what buyers are most interested in, Mr. Dietrich said. The income equals revenue (total collections) minus operating expenses and overhead.
“You are then left with all the money the physician is paid,” he said. “The issue is, how much is attributed to the physician’s own labor and how much to his or her ownership of the practice? This second category helps determine the value of the practice.”
The market approach is often used as a way to double-check the accuracy of the income approach. The appraiser looks for the prices of similar practices that have already been sold and then adjusts the price on the basis of differences with the practice up for sale.
The asset approach may be used when the practice has no positive cash flow. It establishes a price for tangible assets, which are often much lower in value than the values that the other approaches come up with. The asset approach can be a lower-priced alternative for practices that can’t be measured under the income or market approach.
“Equipment appraisers can do an inventory of your equipment,” Mr. Wood said. “Generally, equipment that is more than 3 years old, such as computers, is not that valuable, but an ultrasound machine probably has some resale value.”
Will the buyer pay for goodwill?
Many practice owners hope they can get money for the “goodwill” of their practice when they sell. Goodwill basically represents the reputation of the practice, which is difficult to pinpoint, and Mr. Wood said buyers often don’t want to pay for it.
“The goodwill is a wild card,” Mr. Wood said. “It can range from zero to crazy numbers. There is a Goodwill Registry – a list of the goodwill in other practice sales – that you can consult.”
One simple way to calculate the goodwill, he said, is to take the value of the practice based on examining income and remove the value of tangible assets. What is left is considered the goodwill.
Another form of intangible asset that is sometimes lumped together with goodwill is the value of the practice’s trained staff. “Some buyers agree to pay for the staff in place, because they plan to use that staff,” Ms. Kadan said. In one large deal she was involved with, the buyer agreed to pay something for the selling practice’s staff of 180 people.
Another item that buyers also do not typically pay for is the practice’s accounts receivable. They may also not pay for any liabilities the practice holds, such as the facility lease, equipment lease, and maintenance contracts, Mr. Barbo said. “The buyer then often stipulates that all liabilities are left to the practice, or stipulates any specific liabilities that it may assume.”
Selling to other doctors
Doctors can sell practices or shares in practices to other doctors. A retiring physician, for example, can sell his or her share to the other partners. A valuator may be brought in to establish the value of the doctor’s equity interest in the practice.
“Generally, practice buyouts aren’t lucrative for selling physician,” Mr. Wood said. “There are exceptions, of course, such as specialty practices in some cases.”
A practice can also be sold to a new doctor or to a previously employed physician who wants to be an owner. These physicians usually need to get a bank loan to buy the practice.
The bank assesses the finances of the selling practice to determine whether the buying physician will earn enough money to pay back the loan. “Banks don’t want lend more than the gross annual revenue of the practice, and some banks will only lend at 65% of gross annual revenue,” Sean Tinsley said.
COVID-19 has seriously affected banks’ lending decisions. Banks stopped lending to practice buyers at the beginning of the pandemic, and when they started lending again, they were more cautious, Sean Tinsley said. “Generally, banks want to see the practice at 85%-90% of pre–COVID-19 numbers before they make a loan.”
He added that, if a buyer can’t get a bank loan, the selling doctor may decide to finance the sale. The buyer agrees to a payment schedule to pay off the full price over several years.
Selling to or merging with other practices
The usual buyer is another practice, Reed Tinsley said. “You can sell to a group, but prices are low because, with COVID-19, buyers don’t want to incur a lot of money up front. Or you can merge with the practice, which means the selling doctor usually doesn’t get any money, but he does get a share in the larger practice. In that case, the partnership is the object of value, and it can be cashed out when the physician leaves the practice.”
Mergers can get very complicated. Mr. Fanburg said he has been working with seven groups that are merging into one. “The merger was scheduled to go live last January, but it was slowed down over negotiations about new managed care contracts and putting together a management structure, plus the groups were a little wary of each other. Now the deal is scheduled to go live next January.”
One advantage to selling to a larger entity, such as a big group practice or a hospital, is that the selling physician benefits from the higher reimbursement rates that large providers usually command. “If the buyer has more favorable reimbursement rates with insurers, it could pay the selling doctor much more than he is making now,” Mr. Barraza said.
Hospitals as buyers
Because of COVID-19, currently many hospitals don’t have money to buy more practices. However, this is most likely a temporary situation.
Hospitals typically offer less money than other buyers, according to Sean Tinsley. “We have never sold to a hospital, because hospitals generally don’t pay for goodwill. They pay for the practice assets and offer a dollar amount for each chart.”
Hospitals have to be careful not to pay physicians more than the usual amount for their practices, because the extra amount could be seen as a kickback for referrals, which would violate the federal Stark law and Anti-Kickback Statute. Not-for-profit hospitals also have to comply with regulations at the Internal Revenue Service.
Hospitals usually require that the selling physician continue to work in the practice after it is sold. The selling physician’s presence helps ensure that the practice’s output will not decline after sale. Although the sales price may be low, the hospital may make up for it by paying a higher compensation, Sean Tinsley said.
Selling to private-equity firms
Private-equity purchases are financed by investors who essentially want to “flip” practices – that is, they want to make them more profitable and then sell them to someone else. The private-equity firm starts by buying a “platform” practice, which forms the core of the venture. It then buys smaller practices that will be managed by the platform practice.
The number of private-equity deals increased continually through 2019, then plummeted in March because of COVID-19, but by the summer, activity began to rise again.
Physicians are very intrigued about selling to private-equity firms because they are known to pay the most for practices. But private-equity buyers focus on a fairly narrow group of specialties.
Generally, Sean Tinsley said, private-equity firms only look for pain, dermatology, and ophthalmology practices, but they have been starting to branch out to specialties such as gastroenterology. In 2018, there were only two private-equity deals for gastroenterology practices, but in 2019, there were 16, according to one assessment.
Private-equity firms buy very few of the practices they initially review, according to Mr. Fanburg. “Private equity negotiates with dozens or even hundreds of physician practices at a time, with only 1%-5% of those practices actually being acquired.”
The private-equity firm’s upfront payment to selling physicians is quite high, but then the physicians become employees of the new group and earn much less in compensation than they earned on this own.
“In order for the venture to get any value out of the acquisition, the doctors have to make less going forward than they did historically,” Mr. Dietrich said. That freed-up money boosts the value of the venture.
When the platform practice is sold – usually after 5 years or so – “chances are the management team will be replaced,” Mr. Fanburg said. “There could be new policies and objectives, which could mean a bumpy ride for physicians.”
Do you really want to sell?
“When a group of physicians comes to me asking for help selling their practice, my first question is, Why are you doing this?” Mr. Fanburg said. “You need a better reason for selling than just the money.
“Once you make the leap, there is a certain amount of autonomy you lose,” he continued. “The sale gives you an economic boost, but it may not be enough for the long haul. If you stay on with the buyer, your compensation is often lower. That makes sense if you’re retiring, but not if you’re a younger physician with many years of practice in the years ahead.
“When physicians say they see no other way out except to sell,” Mr. Fanburg said, “I tell them that their buyer will see a path to future growth for your practice. If you think reimbursements are getting worse, why are the buyers pressing ahead?”
A version of this article originally appeared on Medscape.com.
Good for profits, good for patients: A new form of medical visits
Ten patients smiled and waved out on the computer monitor, as Jacob Mirsky, MD, greeted each one, asked them to introduce themselves, and inquired as to how each was doing with their stress reduction tactics.
The attendees of the online session had been patients at in-person group visits at the Massachusetts General Hospital Revere HealthCare Center. But those in-person group sessions, known as shared medical appointments (SMAs), were shut down when COVID-19 arrived.
“Our group patients have been missing the sessions,” said Dr. Mirsky, a general internist who codirects the center’s group visit program. The online sessions, called virtual SMAs (V-SMAs), work well with COVID-19 social distancing.
In the group sessions, Dr. Mirsky reads a standardized message that addresses privacy concerns during the session. For the next 60-90 minutes, “we ask them to talk about what has gone well for them and what they are struggling with,” he said. “Then I answer their questions using materials in a PowerPoint to address key points, such as reducing salt for high blood pressure or interpreting blood sugar levels for diabetes.
“I try to end group sessions with one area of focus,” Dr. Mirsky said. “In the stress reduction group, this could be meditation. In the diabetes group, it could be a discussion on weight loss.” Then the program’s health coach goes over some key concepts on behavior change and invites participants to contact her after the session.
“The nice thing is that these virtual sessions are fully reimbursable by all of our insurers in Massachusetts,” Dr. Mirsky said. Through evaluation and management (E/M) codes, each patient in a group visit is paid the same as a patient in an individual visit with the same level of complexity.
Dr. Mirsky writes a note in the chart about each patient who was in the group session. “This includes information about the specific patient, such as the history and physical, and information about the group meeting,” he said. In the next few months, the center plans to put its other group sessions online – on blood pressure, obesity, diabetes, and insomnia.
Attracting doctors who hadn’t done groups before
said Marianne Sumego, MD, director of the Cleveland Clinic’s SMA program, which began 21 years ago.
In this era of COVID-19, group visits have either switched to V-SMAs or halted. However, the COVID-19 crisis has given group visits a second wind. Some doctors who never used SMAs before are now trying out this new mode of patient engagement,
Many of the 100 doctors using SMAs at the Cleveland Clinic have switched over to V-SMAs for now, and the new mode is also attracting colleagues who are new to SMAs, she said.
“When doctors started using telemedicine, virtual group visits started making sense to them,” Dr. Sumego said. “This is a time of a great deal of experimentation in practice design.”
Indeed, V-SMAs have eliminated some problems that had discouraged doctors from trying SMAs, said Amy Wheeler, MD, a general internist who founded the Revere SMA program and codirects it with Dr. Mirsky.
V-SMAs eliminate the need for a large space to hold sessions and reduce the number of staff needed to run sessions, Dr. Wheeler said. “Virtual group visits can actually be easier to use than in-person group visits.”
Dr. Sumego believes small practices in particular will take up V-SMAs because they are easier to run than regular SMAs. “Necessity drives change,” she said. “Across the country everyone is looking at the virtual group model.”
Group visits can help your bottom line
Medicare and many private payers cover group visits. In most cases, they tend to pay the same rate as for an individual office visit. As with telehealth, Medicare and many other payers are temporarily reimbursing for virtual visits at the same rate as for real visits.
Not all payers have a stated policy about covering SMAs, and physicians have to ask. The Centers for Medicare & Medicaid Services, for example, has not published any coding rules on SMAs. But in response to a query by the American Academy of Family Physicians, CMS said it would allow use of CPT codes for E/M services for individual patients.
Blue Cross Blue Shield of North Carolina is one of the few payers with a clearly stated policy on its website. Like Medicare, the insurer accepts E/M codes, and it requires that patients’ attendance must be voluntary; they must be established patients; and the visit must be specific to a disease or condition, although several conditions are allowed.
Dr. Mirsky said his group uses the same E/M level – 99213 – for all of his SMA patients. “Since a regular primary care visit is usually billed at a level 3 or 4, depending on how many topics are covered, we chose level 3 for groups, because the group session deals with just one topic.”
One challenge for billing for SMAs is that most health insurers require patients to provide a copay for each visit, which can discourage patients in groups that meet frequently, says Wayne Dysinger, MD, founder of Lifestyle Medical Solutions, a two-physician primary care practice in Riverside, Calif.
But Dr. Dysinger, who has been using SMAs for 5 years, usually doesn’t have to worry about copays because much of his work is capitated and doesn’t require a copay.
Also, some of Dr. Dysinger’s SMA patients are in direct primary care, in which the patients pay an $18 monthly membership fee. Other practices may charge a flat out-of-pocket fee.
How group visits operate
SMAs are based on the observation that patients with the same condition generally ask their doctor the same questions, and rather than repeat the answers each time, why not provide them to a group?
Dr. Wheeler said trying to be more efficient with her time was the primary reason she became interested in SMAs a dozen years ago. “I was trying to squeeze the advice patients needed into a normal patient visit, and it wasn’t working. When I tried to tell them everything they needed to know, I’d run behind for the rest of my day’s visits.”
She found she was continually repeating the same conversation with patients, but these talks weren’t detailed enough to be effective. “When my weight loss patients came back for the next appointment, they had not made the recommended changes in lifestyle. I started to realize how complicated weight loss was.” So Dr. Wheeler founded the SMA program at the Revere Center.
Doctors enjoy the patient interaction
Some doctors who use SMAs talk about how connected they feel with their patients. “For me, the group sessions are the most gratifying part of the week,” Dr. Dysinger says. “I like to see the patients interacting with me and with each other, and watch their health behavior change over time.”
“These groups have a great deal of energy,” he said. “They have a kind of vulnerability that is very raw, very human. People make commitments to meet goals. Will they meet them or not?”
Dr. Dysinger’s enthusiasm has been echoed by other doctors. In a study of older patients, physicians who used SMAs were more satisfied with care than physicians who relied on standard one-to-one interactions. In another study, the researchers surmised that, in SMAs, doctors learn from their patients how they can better meet their needs.
Dr. Dysinger thinks SMAs are widely applicable in primary care. He estimates that 80%-85% of appointments at a primary care practice involve chronic diseases, and this type of patient is a good fit for group visits. SMAs typically treat patients with diabetes, asthma, arthritis, and obesity.
Dr. Sumego said SMAs are used for specialty care at Cleveland Clinic, such as to help patients before and after bariatric surgery. SMAs have also been used to treat patients with ulcerative colitis, multiple sclerosis, cancer, HIV, menopause, insomnia, and stress, according to one report.
Dr. Dysinger, who runs a small practice, organizes his group sessions somewhat differently. He doesn’t organize his groups around conditions like diabetes, but instead his groups focus on four “pillars” of lifestyle medicine: nourishment, movement, resilience (involving sleep and stress), and connectedness.
Why patients like group visits
Feeling part of a whole is a major draw for many patients. “Patients seem to like committing to something bigger than just themselves,” Dr. Wheeler said. “They enjoy the sense of community that groups have, the joy of supporting one another.”
“It’s feeling that you’re not alone,” Dr. Mirsky said. “When a patient struggling with diabetes hears how hard it is for another patient, it validates their experience and gives them someone to connect with. There is a positive peer pressure.”
Many programs, including Dr. Wheeler’s and Dr. Mirsky’s in Boston, allow patients to drop in and out of sessions, rather than attending one course all the way through. But even under this format, Dr. Wheeler said that patients often tend to stick together. “At the end of a session, one patient asks another: ‘Which session do you want to go to next?’ ” she said.
Patients also learn from each other in SMAs. Patients exchange experiences and share advice they may not have had the chance to get during an individual visit.
The group dynamic can make it easier for some patients to reveal sensitive information, said Dr. Dysinger. “In these groups, people feel free to talk about their bowel movements, or about having to deal with the influence of a parent on their lives,” Dr. Dysinger said. “The sessions can have the feel of an [Alcoholics Anonymous] meeting, but they’re firmly grounded in medicine.”
Potential downsides of virtual group visits
SMAs and VSMAs may not work for every practice. Some small practices may not have enough patients to organize a group visit around a particular condition – even a common one like diabetes. In a presentation before the Society of General Internal Medicine, a physician from the Medical University of South Carolina, Charleston, warned that it may be difficult for a practice to fill diabetes group visits every year.
Additionally, some patients don’t want to talk about personal matters in a group. “They may not want to reveal certain things about themselves,” Dr. Mirsky said. “So I tell the group that if there is anything that anyone wants to talk about in private, I’m available.”
Another drawback of SMAs is that more experienced patients may have to slog through information they already know, which is a particular problem when patients can drop in and out of sessions. Dr. Mirsky noted that “what often ends up happening is that the experienced participant helps the newcomer.”
Finally, confidentially is a big concern in a group session. “In a one-on-one visit, you can go into details about the patient’s health, and even bring up an entry in the chart,” Dr. Wheeler said. “But in a group visit, you can’t raise any personal details about a patient unless the patient brings it up first.”
SMA patients sign confidentiality agreements in which they agree not to talk about other patients outside the session. Ensuring confidentiality becomes more complicated in virtual group visits, because someone located in the room near a participant could overhear the conversation. For this reason, patients in V-SMAs are advised to use headphones or, at a minimum, close the door to the room they are in.
To address privacy concerns, Zoom encrypts its data, but some privacy breeches have been reported, and a U.S. senator has been looking into Zoom’s privacy vulnerabilities.
Transferring groups to virtual groups
It took the COVID-19 crisis for most doctors to take up virtual SMAs. Dr. Sumego said that the Cleveland Clinic started virtual SMAs more than a year ago, but most other groups operating SMAs were apparently not providing them virtually before COVID-19 started.
Dr. Dysinger said he tried virtual SMAs in 2017 but dropped them because the technology – using Zoom – was challenging at the time, and his staff and most patients were resistant. “Only three to five people were attending the virtual sessions, and the meetings took place in the evening, which was hard on the staff.”
“When COVID-19 first appeared, our initial response was to try to keep the in-person group and add social distancing to it, but that wasn’t workable, so very quickly we shifted to Zoom meetings,” Dr. Dysinger said. “We had experience with Zoom already, and the Zoom technology had improved and was easier to use. COVID-19 forced it all forward.”
Are V-SMAs effective? While there have been many studies showing the effectiveness of in-person SMAs, there have been very few on V-SMAs. One 2018 study of obesity patients found that those attending in-person SMAs lost somewhat more weight than those in V-SMAs.
As with telemedicine, some patients have trouble with the technology of V-SMAs. Dr. Dysinger said 5%-10% of his SMA patients don’t make the switch over to V-SMAs – mainly because of problems in adapting to the technology – but the rest are happy. “We’re averaging 10 people per meeting, and as many as 20.”
Getting comfortable with group visits
Dealing with group visits takes a very different mindset than what doctors normally have, Dr. Wheeler said. “It took me 6-8 months to feel comfortable enough with group sessions to do them myself,” she recalled. “This was a very different way to practice, compared to the one-on-one care I was trained to give patients. Others may find the transition easier, though.
“Doctors are used to being in control of the patient visit, but the exchange in a group visit is more fluid,” Dr. Wheeler said. “Patients offer their own opinions, and this sends the discussion off on a tangent that is often quite useful. As doctors, we have to learn when to let these tangents continue, and know when the discussion might have to be brought back to the theme at hand. Often it’s better not to intercede.”
Do doctors need training to conduct SMAs? Patients in group visits reported worse communication with physicians than those in individual visits, according to a 2014 study. The authors surmised that the doctors needed to learn how to talk to groups and suggested that they get some training.
The potential staying power of V-SMAs post COVID?
Once the COVID-19 crisis is over, Medicare is scheduled to no longer provide the same level of reimbursement for virtual sessions as for real sessions. Dr. Mirsky anticipates a great deal of resistance to this change from thousands of physicians and patients who have become comfortable with telehealth, including virtual SMAs.
Dr. Dysinger thinks V-SMAs will continue. “When COVID-19 clears and we can go back to in-person groups, we expect to keep some virtual groups. People have already come to accept and value virtual groups.”
Dr. Wheeler sees virtual groups playing an essential role post COVID-19, when practices have to get back up to speed. “Virtual group visits could make it easier to deal with a large backlog of patients who couldn’t be seen up until now,” she said. “And virtual groups will be the only way to see patients who are still reluctant to meet in a group.”
A version of this article originally appeared on Medscape.com.
Ten patients smiled and waved out on the computer monitor, as Jacob Mirsky, MD, greeted each one, asked them to introduce themselves, and inquired as to how each was doing with their stress reduction tactics.
The attendees of the online session had been patients at in-person group visits at the Massachusetts General Hospital Revere HealthCare Center. But those in-person group sessions, known as shared medical appointments (SMAs), were shut down when COVID-19 arrived.
“Our group patients have been missing the sessions,” said Dr. Mirsky, a general internist who codirects the center’s group visit program. The online sessions, called virtual SMAs (V-SMAs), work well with COVID-19 social distancing.
In the group sessions, Dr. Mirsky reads a standardized message that addresses privacy concerns during the session. For the next 60-90 minutes, “we ask them to talk about what has gone well for them and what they are struggling with,” he said. “Then I answer their questions using materials in a PowerPoint to address key points, such as reducing salt for high blood pressure or interpreting blood sugar levels for diabetes.
“I try to end group sessions with one area of focus,” Dr. Mirsky said. “In the stress reduction group, this could be meditation. In the diabetes group, it could be a discussion on weight loss.” Then the program’s health coach goes over some key concepts on behavior change and invites participants to contact her after the session.
“The nice thing is that these virtual sessions are fully reimbursable by all of our insurers in Massachusetts,” Dr. Mirsky said. Through evaluation and management (E/M) codes, each patient in a group visit is paid the same as a patient in an individual visit with the same level of complexity.
Dr. Mirsky writes a note in the chart about each patient who was in the group session. “This includes information about the specific patient, such as the history and physical, and information about the group meeting,” he said. In the next few months, the center plans to put its other group sessions online – on blood pressure, obesity, diabetes, and insomnia.
Attracting doctors who hadn’t done groups before
said Marianne Sumego, MD, director of the Cleveland Clinic’s SMA program, which began 21 years ago.
In this era of COVID-19, group visits have either switched to V-SMAs or halted. However, the COVID-19 crisis has given group visits a second wind. Some doctors who never used SMAs before are now trying out this new mode of patient engagement,
Many of the 100 doctors using SMAs at the Cleveland Clinic have switched over to V-SMAs for now, and the new mode is also attracting colleagues who are new to SMAs, she said.
“When doctors started using telemedicine, virtual group visits started making sense to them,” Dr. Sumego said. “This is a time of a great deal of experimentation in practice design.”
Indeed, V-SMAs have eliminated some problems that had discouraged doctors from trying SMAs, said Amy Wheeler, MD, a general internist who founded the Revere SMA program and codirects it with Dr. Mirsky.
V-SMAs eliminate the need for a large space to hold sessions and reduce the number of staff needed to run sessions, Dr. Wheeler said. “Virtual group visits can actually be easier to use than in-person group visits.”
Dr. Sumego believes small practices in particular will take up V-SMAs because they are easier to run than regular SMAs. “Necessity drives change,” she said. “Across the country everyone is looking at the virtual group model.”
Group visits can help your bottom line
Medicare and many private payers cover group visits. In most cases, they tend to pay the same rate as for an individual office visit. As with telehealth, Medicare and many other payers are temporarily reimbursing for virtual visits at the same rate as for real visits.
Not all payers have a stated policy about covering SMAs, and physicians have to ask. The Centers for Medicare & Medicaid Services, for example, has not published any coding rules on SMAs. But in response to a query by the American Academy of Family Physicians, CMS said it would allow use of CPT codes for E/M services for individual patients.
Blue Cross Blue Shield of North Carolina is one of the few payers with a clearly stated policy on its website. Like Medicare, the insurer accepts E/M codes, and it requires that patients’ attendance must be voluntary; they must be established patients; and the visit must be specific to a disease or condition, although several conditions are allowed.
Dr. Mirsky said his group uses the same E/M level – 99213 – for all of his SMA patients. “Since a regular primary care visit is usually billed at a level 3 or 4, depending on how many topics are covered, we chose level 3 for groups, because the group session deals with just one topic.”
One challenge for billing for SMAs is that most health insurers require patients to provide a copay for each visit, which can discourage patients in groups that meet frequently, says Wayne Dysinger, MD, founder of Lifestyle Medical Solutions, a two-physician primary care practice in Riverside, Calif.
But Dr. Dysinger, who has been using SMAs for 5 years, usually doesn’t have to worry about copays because much of his work is capitated and doesn’t require a copay.
Also, some of Dr. Dysinger’s SMA patients are in direct primary care, in which the patients pay an $18 monthly membership fee. Other practices may charge a flat out-of-pocket fee.
How group visits operate
SMAs are based on the observation that patients with the same condition generally ask their doctor the same questions, and rather than repeat the answers each time, why not provide them to a group?
Dr. Wheeler said trying to be more efficient with her time was the primary reason she became interested in SMAs a dozen years ago. “I was trying to squeeze the advice patients needed into a normal patient visit, and it wasn’t working. When I tried to tell them everything they needed to know, I’d run behind for the rest of my day’s visits.”
She found she was continually repeating the same conversation with patients, but these talks weren’t detailed enough to be effective. “When my weight loss patients came back for the next appointment, they had not made the recommended changes in lifestyle. I started to realize how complicated weight loss was.” So Dr. Wheeler founded the SMA program at the Revere Center.
Doctors enjoy the patient interaction
Some doctors who use SMAs talk about how connected they feel with their patients. “For me, the group sessions are the most gratifying part of the week,” Dr. Dysinger says. “I like to see the patients interacting with me and with each other, and watch their health behavior change over time.”
“These groups have a great deal of energy,” he said. “They have a kind of vulnerability that is very raw, very human. People make commitments to meet goals. Will they meet them or not?”
Dr. Dysinger’s enthusiasm has been echoed by other doctors. In a study of older patients, physicians who used SMAs were more satisfied with care than physicians who relied on standard one-to-one interactions. In another study, the researchers surmised that, in SMAs, doctors learn from their patients how they can better meet their needs.
Dr. Dysinger thinks SMAs are widely applicable in primary care. He estimates that 80%-85% of appointments at a primary care practice involve chronic diseases, and this type of patient is a good fit for group visits. SMAs typically treat patients with diabetes, asthma, arthritis, and obesity.
Dr. Sumego said SMAs are used for specialty care at Cleveland Clinic, such as to help patients before and after bariatric surgery. SMAs have also been used to treat patients with ulcerative colitis, multiple sclerosis, cancer, HIV, menopause, insomnia, and stress, according to one report.
Dr. Dysinger, who runs a small practice, organizes his group sessions somewhat differently. He doesn’t organize his groups around conditions like diabetes, but instead his groups focus on four “pillars” of lifestyle medicine: nourishment, movement, resilience (involving sleep and stress), and connectedness.
Why patients like group visits
Feeling part of a whole is a major draw for many patients. “Patients seem to like committing to something bigger than just themselves,” Dr. Wheeler said. “They enjoy the sense of community that groups have, the joy of supporting one another.”
“It’s feeling that you’re not alone,” Dr. Mirsky said. “When a patient struggling with diabetes hears how hard it is for another patient, it validates their experience and gives them someone to connect with. There is a positive peer pressure.”
Many programs, including Dr. Wheeler’s and Dr. Mirsky’s in Boston, allow patients to drop in and out of sessions, rather than attending one course all the way through. But even under this format, Dr. Wheeler said that patients often tend to stick together. “At the end of a session, one patient asks another: ‘Which session do you want to go to next?’ ” she said.
Patients also learn from each other in SMAs. Patients exchange experiences and share advice they may not have had the chance to get during an individual visit.
The group dynamic can make it easier for some patients to reveal sensitive information, said Dr. Dysinger. “In these groups, people feel free to talk about their bowel movements, or about having to deal with the influence of a parent on their lives,” Dr. Dysinger said. “The sessions can have the feel of an [Alcoholics Anonymous] meeting, but they’re firmly grounded in medicine.”
Potential downsides of virtual group visits
SMAs and VSMAs may not work for every practice. Some small practices may not have enough patients to organize a group visit around a particular condition – even a common one like diabetes. In a presentation before the Society of General Internal Medicine, a physician from the Medical University of South Carolina, Charleston, warned that it may be difficult for a practice to fill diabetes group visits every year.
Additionally, some patients don’t want to talk about personal matters in a group. “They may not want to reveal certain things about themselves,” Dr. Mirsky said. “So I tell the group that if there is anything that anyone wants to talk about in private, I’m available.”
Another drawback of SMAs is that more experienced patients may have to slog through information they already know, which is a particular problem when patients can drop in and out of sessions. Dr. Mirsky noted that “what often ends up happening is that the experienced participant helps the newcomer.”
Finally, confidentially is a big concern in a group session. “In a one-on-one visit, you can go into details about the patient’s health, and even bring up an entry in the chart,” Dr. Wheeler said. “But in a group visit, you can’t raise any personal details about a patient unless the patient brings it up first.”
SMA patients sign confidentiality agreements in which they agree not to talk about other patients outside the session. Ensuring confidentiality becomes more complicated in virtual group visits, because someone located in the room near a participant could overhear the conversation. For this reason, patients in V-SMAs are advised to use headphones or, at a minimum, close the door to the room they are in.
To address privacy concerns, Zoom encrypts its data, but some privacy breeches have been reported, and a U.S. senator has been looking into Zoom’s privacy vulnerabilities.
Transferring groups to virtual groups
It took the COVID-19 crisis for most doctors to take up virtual SMAs. Dr. Sumego said that the Cleveland Clinic started virtual SMAs more than a year ago, but most other groups operating SMAs were apparently not providing them virtually before COVID-19 started.
Dr. Dysinger said he tried virtual SMAs in 2017 but dropped them because the technology – using Zoom – was challenging at the time, and his staff and most patients were resistant. “Only three to five people were attending the virtual sessions, and the meetings took place in the evening, which was hard on the staff.”
“When COVID-19 first appeared, our initial response was to try to keep the in-person group and add social distancing to it, but that wasn’t workable, so very quickly we shifted to Zoom meetings,” Dr. Dysinger said. “We had experience with Zoom already, and the Zoom technology had improved and was easier to use. COVID-19 forced it all forward.”
Are V-SMAs effective? While there have been many studies showing the effectiveness of in-person SMAs, there have been very few on V-SMAs. One 2018 study of obesity patients found that those attending in-person SMAs lost somewhat more weight than those in V-SMAs.
As with telemedicine, some patients have trouble with the technology of V-SMAs. Dr. Dysinger said 5%-10% of his SMA patients don’t make the switch over to V-SMAs – mainly because of problems in adapting to the technology – but the rest are happy. “We’re averaging 10 people per meeting, and as many as 20.”
Getting comfortable with group visits
Dealing with group visits takes a very different mindset than what doctors normally have, Dr. Wheeler said. “It took me 6-8 months to feel comfortable enough with group sessions to do them myself,” she recalled. “This was a very different way to practice, compared to the one-on-one care I was trained to give patients. Others may find the transition easier, though.
“Doctors are used to being in control of the patient visit, but the exchange in a group visit is more fluid,” Dr. Wheeler said. “Patients offer their own opinions, and this sends the discussion off on a tangent that is often quite useful. As doctors, we have to learn when to let these tangents continue, and know when the discussion might have to be brought back to the theme at hand. Often it’s better not to intercede.”
Do doctors need training to conduct SMAs? Patients in group visits reported worse communication with physicians than those in individual visits, according to a 2014 study. The authors surmised that the doctors needed to learn how to talk to groups and suggested that they get some training.
The potential staying power of V-SMAs post COVID?
Once the COVID-19 crisis is over, Medicare is scheduled to no longer provide the same level of reimbursement for virtual sessions as for real sessions. Dr. Mirsky anticipates a great deal of resistance to this change from thousands of physicians and patients who have become comfortable with telehealth, including virtual SMAs.
Dr. Dysinger thinks V-SMAs will continue. “When COVID-19 clears and we can go back to in-person groups, we expect to keep some virtual groups. People have already come to accept and value virtual groups.”
Dr. Wheeler sees virtual groups playing an essential role post COVID-19, when practices have to get back up to speed. “Virtual group visits could make it easier to deal with a large backlog of patients who couldn’t be seen up until now,” she said. “And virtual groups will be the only way to see patients who are still reluctant to meet in a group.”
A version of this article originally appeared on Medscape.com.
Ten patients smiled and waved out on the computer monitor, as Jacob Mirsky, MD, greeted each one, asked them to introduce themselves, and inquired as to how each was doing with their stress reduction tactics.
The attendees of the online session had been patients at in-person group visits at the Massachusetts General Hospital Revere HealthCare Center. But those in-person group sessions, known as shared medical appointments (SMAs), were shut down when COVID-19 arrived.
“Our group patients have been missing the sessions,” said Dr. Mirsky, a general internist who codirects the center’s group visit program. The online sessions, called virtual SMAs (V-SMAs), work well with COVID-19 social distancing.
In the group sessions, Dr. Mirsky reads a standardized message that addresses privacy concerns during the session. For the next 60-90 minutes, “we ask them to talk about what has gone well for them and what they are struggling with,” he said. “Then I answer their questions using materials in a PowerPoint to address key points, such as reducing salt for high blood pressure or interpreting blood sugar levels for diabetes.
“I try to end group sessions with one area of focus,” Dr. Mirsky said. “In the stress reduction group, this could be meditation. In the diabetes group, it could be a discussion on weight loss.” Then the program’s health coach goes over some key concepts on behavior change and invites participants to contact her after the session.
“The nice thing is that these virtual sessions are fully reimbursable by all of our insurers in Massachusetts,” Dr. Mirsky said. Through evaluation and management (E/M) codes, each patient in a group visit is paid the same as a patient in an individual visit with the same level of complexity.
Dr. Mirsky writes a note in the chart about each patient who was in the group session. “This includes information about the specific patient, such as the history and physical, and information about the group meeting,” he said. In the next few months, the center plans to put its other group sessions online – on blood pressure, obesity, diabetes, and insomnia.
Attracting doctors who hadn’t done groups before
said Marianne Sumego, MD, director of the Cleveland Clinic’s SMA program, which began 21 years ago.
In this era of COVID-19, group visits have either switched to V-SMAs or halted. However, the COVID-19 crisis has given group visits a second wind. Some doctors who never used SMAs before are now trying out this new mode of patient engagement,
Many of the 100 doctors using SMAs at the Cleveland Clinic have switched over to V-SMAs for now, and the new mode is also attracting colleagues who are new to SMAs, she said.
“When doctors started using telemedicine, virtual group visits started making sense to them,” Dr. Sumego said. “This is a time of a great deal of experimentation in practice design.”
Indeed, V-SMAs have eliminated some problems that had discouraged doctors from trying SMAs, said Amy Wheeler, MD, a general internist who founded the Revere SMA program and codirects it with Dr. Mirsky.
V-SMAs eliminate the need for a large space to hold sessions and reduce the number of staff needed to run sessions, Dr. Wheeler said. “Virtual group visits can actually be easier to use than in-person group visits.”
Dr. Sumego believes small practices in particular will take up V-SMAs because they are easier to run than regular SMAs. “Necessity drives change,” she said. “Across the country everyone is looking at the virtual group model.”
Group visits can help your bottom line
Medicare and many private payers cover group visits. In most cases, they tend to pay the same rate as for an individual office visit. As with telehealth, Medicare and many other payers are temporarily reimbursing for virtual visits at the same rate as for real visits.
Not all payers have a stated policy about covering SMAs, and physicians have to ask. The Centers for Medicare & Medicaid Services, for example, has not published any coding rules on SMAs. But in response to a query by the American Academy of Family Physicians, CMS said it would allow use of CPT codes for E/M services for individual patients.
Blue Cross Blue Shield of North Carolina is one of the few payers with a clearly stated policy on its website. Like Medicare, the insurer accepts E/M codes, and it requires that patients’ attendance must be voluntary; they must be established patients; and the visit must be specific to a disease or condition, although several conditions are allowed.
Dr. Mirsky said his group uses the same E/M level – 99213 – for all of his SMA patients. “Since a regular primary care visit is usually billed at a level 3 or 4, depending on how many topics are covered, we chose level 3 for groups, because the group session deals with just one topic.”
One challenge for billing for SMAs is that most health insurers require patients to provide a copay for each visit, which can discourage patients in groups that meet frequently, says Wayne Dysinger, MD, founder of Lifestyle Medical Solutions, a two-physician primary care practice in Riverside, Calif.
But Dr. Dysinger, who has been using SMAs for 5 years, usually doesn’t have to worry about copays because much of his work is capitated and doesn’t require a copay.
Also, some of Dr. Dysinger’s SMA patients are in direct primary care, in which the patients pay an $18 monthly membership fee. Other practices may charge a flat out-of-pocket fee.
How group visits operate
SMAs are based on the observation that patients with the same condition generally ask their doctor the same questions, and rather than repeat the answers each time, why not provide them to a group?
Dr. Wheeler said trying to be more efficient with her time was the primary reason she became interested in SMAs a dozen years ago. “I was trying to squeeze the advice patients needed into a normal patient visit, and it wasn’t working. When I tried to tell them everything they needed to know, I’d run behind for the rest of my day’s visits.”
She found she was continually repeating the same conversation with patients, but these talks weren’t detailed enough to be effective. “When my weight loss patients came back for the next appointment, they had not made the recommended changes in lifestyle. I started to realize how complicated weight loss was.” So Dr. Wheeler founded the SMA program at the Revere Center.
Doctors enjoy the patient interaction
Some doctors who use SMAs talk about how connected they feel with their patients. “For me, the group sessions are the most gratifying part of the week,” Dr. Dysinger says. “I like to see the patients interacting with me and with each other, and watch their health behavior change over time.”
“These groups have a great deal of energy,” he said. “They have a kind of vulnerability that is very raw, very human. People make commitments to meet goals. Will they meet them or not?”
Dr. Dysinger’s enthusiasm has been echoed by other doctors. In a study of older patients, physicians who used SMAs were more satisfied with care than physicians who relied on standard one-to-one interactions. In another study, the researchers surmised that, in SMAs, doctors learn from their patients how they can better meet their needs.
Dr. Dysinger thinks SMAs are widely applicable in primary care. He estimates that 80%-85% of appointments at a primary care practice involve chronic diseases, and this type of patient is a good fit for group visits. SMAs typically treat patients with diabetes, asthma, arthritis, and obesity.
Dr. Sumego said SMAs are used for specialty care at Cleveland Clinic, such as to help patients before and after bariatric surgery. SMAs have also been used to treat patients with ulcerative colitis, multiple sclerosis, cancer, HIV, menopause, insomnia, and stress, according to one report.
Dr. Dysinger, who runs a small practice, organizes his group sessions somewhat differently. He doesn’t organize his groups around conditions like diabetes, but instead his groups focus on four “pillars” of lifestyle medicine: nourishment, movement, resilience (involving sleep and stress), and connectedness.
Why patients like group visits
Feeling part of a whole is a major draw for many patients. “Patients seem to like committing to something bigger than just themselves,” Dr. Wheeler said. “They enjoy the sense of community that groups have, the joy of supporting one another.”
“It’s feeling that you’re not alone,” Dr. Mirsky said. “When a patient struggling with diabetes hears how hard it is for another patient, it validates their experience and gives them someone to connect with. There is a positive peer pressure.”
Many programs, including Dr. Wheeler’s and Dr. Mirsky’s in Boston, allow patients to drop in and out of sessions, rather than attending one course all the way through. But even under this format, Dr. Wheeler said that patients often tend to stick together. “At the end of a session, one patient asks another: ‘Which session do you want to go to next?’ ” she said.
Patients also learn from each other in SMAs. Patients exchange experiences and share advice they may not have had the chance to get during an individual visit.
The group dynamic can make it easier for some patients to reveal sensitive information, said Dr. Dysinger. “In these groups, people feel free to talk about their bowel movements, or about having to deal with the influence of a parent on their lives,” Dr. Dysinger said. “The sessions can have the feel of an [Alcoholics Anonymous] meeting, but they’re firmly grounded in medicine.”
Potential downsides of virtual group visits
SMAs and VSMAs may not work for every practice. Some small practices may not have enough patients to organize a group visit around a particular condition – even a common one like diabetes. In a presentation before the Society of General Internal Medicine, a physician from the Medical University of South Carolina, Charleston, warned that it may be difficult for a practice to fill diabetes group visits every year.
Additionally, some patients don’t want to talk about personal matters in a group. “They may not want to reveal certain things about themselves,” Dr. Mirsky said. “So I tell the group that if there is anything that anyone wants to talk about in private, I’m available.”
Another drawback of SMAs is that more experienced patients may have to slog through information they already know, which is a particular problem when patients can drop in and out of sessions. Dr. Mirsky noted that “what often ends up happening is that the experienced participant helps the newcomer.”
Finally, confidentially is a big concern in a group session. “In a one-on-one visit, you can go into details about the patient’s health, and even bring up an entry in the chart,” Dr. Wheeler said. “But in a group visit, you can’t raise any personal details about a patient unless the patient brings it up first.”
SMA patients sign confidentiality agreements in which they agree not to talk about other patients outside the session. Ensuring confidentiality becomes more complicated in virtual group visits, because someone located in the room near a participant could overhear the conversation. For this reason, patients in V-SMAs are advised to use headphones or, at a minimum, close the door to the room they are in.
To address privacy concerns, Zoom encrypts its data, but some privacy breeches have been reported, and a U.S. senator has been looking into Zoom’s privacy vulnerabilities.
Transferring groups to virtual groups
It took the COVID-19 crisis for most doctors to take up virtual SMAs. Dr. Sumego said that the Cleveland Clinic started virtual SMAs more than a year ago, but most other groups operating SMAs were apparently not providing them virtually before COVID-19 started.
Dr. Dysinger said he tried virtual SMAs in 2017 but dropped them because the technology – using Zoom – was challenging at the time, and his staff and most patients were resistant. “Only three to five people were attending the virtual sessions, and the meetings took place in the evening, which was hard on the staff.”
“When COVID-19 first appeared, our initial response was to try to keep the in-person group and add social distancing to it, but that wasn’t workable, so very quickly we shifted to Zoom meetings,” Dr. Dysinger said. “We had experience with Zoom already, and the Zoom technology had improved and was easier to use. COVID-19 forced it all forward.”
Are V-SMAs effective? While there have been many studies showing the effectiveness of in-person SMAs, there have been very few on V-SMAs. One 2018 study of obesity patients found that those attending in-person SMAs lost somewhat more weight than those in V-SMAs.
As with telemedicine, some patients have trouble with the technology of V-SMAs. Dr. Dysinger said 5%-10% of his SMA patients don’t make the switch over to V-SMAs – mainly because of problems in adapting to the technology – but the rest are happy. “We’re averaging 10 people per meeting, and as many as 20.”
Getting comfortable with group visits
Dealing with group visits takes a very different mindset than what doctors normally have, Dr. Wheeler said. “It took me 6-8 months to feel comfortable enough with group sessions to do them myself,” she recalled. “This was a very different way to practice, compared to the one-on-one care I was trained to give patients. Others may find the transition easier, though.
“Doctors are used to being in control of the patient visit, but the exchange in a group visit is more fluid,” Dr. Wheeler said. “Patients offer their own opinions, and this sends the discussion off on a tangent that is often quite useful. As doctors, we have to learn when to let these tangents continue, and know when the discussion might have to be brought back to the theme at hand. Often it’s better not to intercede.”
Do doctors need training to conduct SMAs? Patients in group visits reported worse communication with physicians than those in individual visits, according to a 2014 study. The authors surmised that the doctors needed to learn how to talk to groups and suggested that they get some training.
The potential staying power of V-SMAs post COVID?
Once the COVID-19 crisis is over, Medicare is scheduled to no longer provide the same level of reimbursement for virtual sessions as for real sessions. Dr. Mirsky anticipates a great deal of resistance to this change from thousands of physicians and patients who have become comfortable with telehealth, including virtual SMAs.
Dr. Dysinger thinks V-SMAs will continue. “When COVID-19 clears and we can go back to in-person groups, we expect to keep some virtual groups. People have already come to accept and value virtual groups.”
Dr. Wheeler sees virtual groups playing an essential role post COVID-19, when practices have to get back up to speed. “Virtual group visits could make it easier to deal with a large backlog of patients who couldn’t be seen up until now,” she said. “And virtual groups will be the only way to see patients who are still reluctant to meet in a group.”
A version of this article originally appeared on Medscape.com.
Is your job performance being evaluated for the wrong factors?
Most physicians get an annual performance review, and may be either elated, disappointed, or confused with their rating.
But some physicians say the right factors aren’t being evaluated or, in many cases, the performance measures promote efforts that are counterproductive.
“Bonuses are a behaviorist approach,” said Richard Gunderman, MD, professor in the schools of medicine, liberal arts, and philanthropy at Indiana University, Indianapolis. “The presumption is that people will change if they get some money – that they will do what the incentive wants them to do and refrain from what it doesn’t want them to do.”
Dr. Gunderman said this often means just going through the motions to get the bonus, and not sharing goals that only the administration cares about. “The goals might be to lower costs, ensure compliance with regulations or billing requirements, or make patterns of care more uniform. These are not changes that are well tailored to what patients want or how doctors think.”
The bonus is a central feature of the annual review. Merritt Hawkins, the physician search firm, reported that 75% of the physician jobs that it searches for involve some kind of production bonus. Bonuses often make up at least 5% of total compensation, but they can be quite hefty in some specialties.
Having to fulfill measures that they’re not excited about can lead physicians to feel disengaged from their work, Dr. Gunderman said. And this disengagement can contribute to physician burnout, which has climbed to very high rates in recent years.
A 2018 paper by two physician leadership experts explored this problem with bonuses. “A growing consensus [of experts] suggests that quality-incentive pay isn’t paying the dividends first envisioned,” they wrote.
The problem is that the measurements tied to a bonus represent an extrinsic motivation – involving goals that doctors don’t really believe in. Instead, physicians need to be intrinsically motivated. They need to be inspired “to manage their own lives,” “to get better at something,” and “to be a part of a larger cause,” they wrote.
How to develop a better review process
“The best way to motivate improved performance is through purpose and mission,” said Robert Pearl, MD, former CEO of the Permanente Medical Group in California and now a lecturer on strategy at Stanford (Calif.) University.
The review process, Dr. Pearl said, should inspire physicians to do better. The doctors should be asking themselves: “How well did we do in helping maximize the health of all of our patients? And how well did we do in avoiding medical errors, preventing complications, meeting the needs of our patients, and achieving superior quality outcomes?”
When he was CEO of Permanente, the huge physician group that works exclusively for health maintenance organization Kaiser, Dr. Pearl and fellow leaders revamped the review system that all Permanente physicians undergo.
First, the Permanente executives provided all physicians with everyone’s patient-satisfaction data, including their own. That way, each physician could compare performance with others and assess strengths and weaknesses. Then Permanente offered educational programs so that physicians could get help in meeting their goals.
“This approach helped improve quality of care, patient satisfaction, and fulfillment of physicians,” Dr. Pearl said. Kaiser Permanente earned the highest health plan member satisfaction rating by J.D. Power and higher rankings by the National Committee for Quality Assurance.
Permanente does not base the bonus on relative value units but on performance measures that are carefully balanced to avoid too much focus on certain measures. “There needs to be an array of quality measures because doctors deal with a complex set of problems,” Dr. Pearl said. For example, a primary care physician at Permanente is assessed on about 30 different measures.
Physicians are more likely to be successful when you emphasize collaboration. Dr. Pearl said.
Although Permanente physicians are compared with each other, they are not pitted against each other but rather are asked to collaborate. “Physicians are more likely to be successful when you emphasize collaboration,” he said. “They can teach each other. You can be good at some things, and your colleague can be good at others.”
Permanente still has one-on-one yearly evaluations, but much of the assessment work is done in monthly meetings within each department. “There, small groups of doctors look at their data and discuss how each of them can improve,” Dr. Pearl noted.
The 360-degree review is valuable but has some problems
Physicians should be getting a lot more feedback about their behavior than they are actually getting, according to Milton Hammerly, MD, chief medical officer at QualChoice Health Insurance in Little Rock, Ark.
“After residency, you get very little feedback on your work,” said Dr. Hammerly, who used to work for a hospital system. “Annual reviews for physicians focus almost exclusively on outcomes, productivity, and quality metrics, but not on people skills, what is called ‘emotional intelligence.’ ”
Dr. Hammerly said he saw the consequence of this lack of education when he was vice president for medical affairs at the hospital system. He was constantly dealing with physicians who exhibited serious disruptive behavior and had to be disciplined. “If only they had gotten a little help earlier on,” he noted.
Dr. Hammerly said that 360-degree evaluations, which are common in corporations but rarely used for physicians, could benefit the profession. He discovered the 360-degree evaluation when it was used for him at QualChoice, and he has been a fan ever since.
The approach involves collecting evaluations of you from your boss, your peers, and from people who work for you. That is, from 360 degrees around you. These people are asked to rate your strengths and weaknesses in a variety of competencies. In this way, you get feedback from all of your work relationships, not just from your boss.
Ideally, the evaluators are anonymous, and the subject works with a facilitator to process the information. But 360-degree evaluations can be done in all kinds of ways.
Critics of the 360-degree evaluations say the usual anonymity of evaluators allows them to be too harsh. Also, evaluators may be too subjective: What they say about you says more about their own perspective than anything about you.
But many people think 360-degree evaluations are at least going in the right direction, because they focus on people skills rather than just meeting metrics.
Robert Centor, MD, an internist in Birmingham, Ala., and a member of the performance measures committee of the American College of Physicians, said the best way to improve performance is to have conversations about your work with colleagues on the department level. “For example, 20 doctors could meet to discuss a certain issue, such as the need for more vaccinations. That doesn’t have to get rewarded with a bonus payment.”
Dr. Pearl said that “doctors need feedback from their colleagues. Without feedback, how else do you get better? You can only improve if you can know how you’re performing, compared to others.”
A version of this article originally appeared on Medscape.com.
Most physicians get an annual performance review, and may be either elated, disappointed, or confused with their rating.
But some physicians say the right factors aren’t being evaluated or, in many cases, the performance measures promote efforts that are counterproductive.
“Bonuses are a behaviorist approach,” said Richard Gunderman, MD, professor in the schools of medicine, liberal arts, and philanthropy at Indiana University, Indianapolis. “The presumption is that people will change if they get some money – that they will do what the incentive wants them to do and refrain from what it doesn’t want them to do.”
Dr. Gunderman said this often means just going through the motions to get the bonus, and not sharing goals that only the administration cares about. “The goals might be to lower costs, ensure compliance with regulations or billing requirements, or make patterns of care more uniform. These are not changes that are well tailored to what patients want or how doctors think.”
The bonus is a central feature of the annual review. Merritt Hawkins, the physician search firm, reported that 75% of the physician jobs that it searches for involve some kind of production bonus. Bonuses often make up at least 5% of total compensation, but they can be quite hefty in some specialties.
Having to fulfill measures that they’re not excited about can lead physicians to feel disengaged from their work, Dr. Gunderman said. And this disengagement can contribute to physician burnout, which has climbed to very high rates in recent years.
A 2018 paper by two physician leadership experts explored this problem with bonuses. “A growing consensus [of experts] suggests that quality-incentive pay isn’t paying the dividends first envisioned,” they wrote.
The problem is that the measurements tied to a bonus represent an extrinsic motivation – involving goals that doctors don’t really believe in. Instead, physicians need to be intrinsically motivated. They need to be inspired “to manage their own lives,” “to get better at something,” and “to be a part of a larger cause,” they wrote.
How to develop a better review process
“The best way to motivate improved performance is through purpose and mission,” said Robert Pearl, MD, former CEO of the Permanente Medical Group in California and now a lecturer on strategy at Stanford (Calif.) University.
The review process, Dr. Pearl said, should inspire physicians to do better. The doctors should be asking themselves: “How well did we do in helping maximize the health of all of our patients? And how well did we do in avoiding medical errors, preventing complications, meeting the needs of our patients, and achieving superior quality outcomes?”
When he was CEO of Permanente, the huge physician group that works exclusively for health maintenance organization Kaiser, Dr. Pearl and fellow leaders revamped the review system that all Permanente physicians undergo.
First, the Permanente executives provided all physicians with everyone’s patient-satisfaction data, including their own. That way, each physician could compare performance with others and assess strengths and weaknesses. Then Permanente offered educational programs so that physicians could get help in meeting their goals.
“This approach helped improve quality of care, patient satisfaction, and fulfillment of physicians,” Dr. Pearl said. Kaiser Permanente earned the highest health plan member satisfaction rating by J.D. Power and higher rankings by the National Committee for Quality Assurance.
Permanente does not base the bonus on relative value units but on performance measures that are carefully balanced to avoid too much focus on certain measures. “There needs to be an array of quality measures because doctors deal with a complex set of problems,” Dr. Pearl said. For example, a primary care physician at Permanente is assessed on about 30 different measures.
Physicians are more likely to be successful when you emphasize collaboration. Dr. Pearl said.
Although Permanente physicians are compared with each other, they are not pitted against each other but rather are asked to collaborate. “Physicians are more likely to be successful when you emphasize collaboration,” he said. “They can teach each other. You can be good at some things, and your colleague can be good at others.”
Permanente still has one-on-one yearly evaluations, but much of the assessment work is done in monthly meetings within each department. “There, small groups of doctors look at their data and discuss how each of them can improve,” Dr. Pearl noted.
The 360-degree review is valuable but has some problems
Physicians should be getting a lot more feedback about their behavior than they are actually getting, according to Milton Hammerly, MD, chief medical officer at QualChoice Health Insurance in Little Rock, Ark.
“After residency, you get very little feedback on your work,” said Dr. Hammerly, who used to work for a hospital system. “Annual reviews for physicians focus almost exclusively on outcomes, productivity, and quality metrics, but not on people skills, what is called ‘emotional intelligence.’ ”
Dr. Hammerly said he saw the consequence of this lack of education when he was vice president for medical affairs at the hospital system. He was constantly dealing with physicians who exhibited serious disruptive behavior and had to be disciplined. “If only they had gotten a little help earlier on,” he noted.
Dr. Hammerly said that 360-degree evaluations, which are common in corporations but rarely used for physicians, could benefit the profession. He discovered the 360-degree evaluation when it was used for him at QualChoice, and he has been a fan ever since.
The approach involves collecting evaluations of you from your boss, your peers, and from people who work for you. That is, from 360 degrees around you. These people are asked to rate your strengths and weaknesses in a variety of competencies. In this way, you get feedback from all of your work relationships, not just from your boss.
Ideally, the evaluators are anonymous, and the subject works with a facilitator to process the information. But 360-degree evaluations can be done in all kinds of ways.
Critics of the 360-degree evaluations say the usual anonymity of evaluators allows them to be too harsh. Also, evaluators may be too subjective: What they say about you says more about their own perspective than anything about you.
But many people think 360-degree evaluations are at least going in the right direction, because they focus on people skills rather than just meeting metrics.
Robert Centor, MD, an internist in Birmingham, Ala., and a member of the performance measures committee of the American College of Physicians, said the best way to improve performance is to have conversations about your work with colleagues on the department level. “For example, 20 doctors could meet to discuss a certain issue, such as the need for more vaccinations. That doesn’t have to get rewarded with a bonus payment.”
Dr. Pearl said that “doctors need feedback from their colleagues. Without feedback, how else do you get better? You can only improve if you can know how you’re performing, compared to others.”
A version of this article originally appeared on Medscape.com.
Most physicians get an annual performance review, and may be either elated, disappointed, or confused with their rating.
But some physicians say the right factors aren’t being evaluated or, in many cases, the performance measures promote efforts that are counterproductive.
“Bonuses are a behaviorist approach,” said Richard Gunderman, MD, professor in the schools of medicine, liberal arts, and philanthropy at Indiana University, Indianapolis. “The presumption is that people will change if they get some money – that they will do what the incentive wants them to do and refrain from what it doesn’t want them to do.”
Dr. Gunderman said this often means just going through the motions to get the bonus, and not sharing goals that only the administration cares about. “The goals might be to lower costs, ensure compliance with regulations or billing requirements, or make patterns of care more uniform. These are not changes that are well tailored to what patients want or how doctors think.”
The bonus is a central feature of the annual review. Merritt Hawkins, the physician search firm, reported that 75% of the physician jobs that it searches for involve some kind of production bonus. Bonuses often make up at least 5% of total compensation, but they can be quite hefty in some specialties.
Having to fulfill measures that they’re not excited about can lead physicians to feel disengaged from their work, Dr. Gunderman said. And this disengagement can contribute to physician burnout, which has climbed to very high rates in recent years.
A 2018 paper by two physician leadership experts explored this problem with bonuses. “A growing consensus [of experts] suggests that quality-incentive pay isn’t paying the dividends first envisioned,” they wrote.
The problem is that the measurements tied to a bonus represent an extrinsic motivation – involving goals that doctors don’t really believe in. Instead, physicians need to be intrinsically motivated. They need to be inspired “to manage their own lives,” “to get better at something,” and “to be a part of a larger cause,” they wrote.
How to develop a better review process
“The best way to motivate improved performance is through purpose and mission,” said Robert Pearl, MD, former CEO of the Permanente Medical Group in California and now a lecturer on strategy at Stanford (Calif.) University.
The review process, Dr. Pearl said, should inspire physicians to do better. The doctors should be asking themselves: “How well did we do in helping maximize the health of all of our patients? And how well did we do in avoiding medical errors, preventing complications, meeting the needs of our patients, and achieving superior quality outcomes?”
When he was CEO of Permanente, the huge physician group that works exclusively for health maintenance organization Kaiser, Dr. Pearl and fellow leaders revamped the review system that all Permanente physicians undergo.
First, the Permanente executives provided all physicians with everyone’s patient-satisfaction data, including their own. That way, each physician could compare performance with others and assess strengths and weaknesses. Then Permanente offered educational programs so that physicians could get help in meeting their goals.
“This approach helped improve quality of care, patient satisfaction, and fulfillment of physicians,” Dr. Pearl said. Kaiser Permanente earned the highest health plan member satisfaction rating by J.D. Power and higher rankings by the National Committee for Quality Assurance.
Permanente does not base the bonus on relative value units but on performance measures that are carefully balanced to avoid too much focus on certain measures. “There needs to be an array of quality measures because doctors deal with a complex set of problems,” Dr. Pearl said. For example, a primary care physician at Permanente is assessed on about 30 different measures.
Physicians are more likely to be successful when you emphasize collaboration. Dr. Pearl said.
Although Permanente physicians are compared with each other, they are not pitted against each other but rather are asked to collaborate. “Physicians are more likely to be successful when you emphasize collaboration,” he said. “They can teach each other. You can be good at some things, and your colleague can be good at others.”
Permanente still has one-on-one yearly evaluations, but much of the assessment work is done in monthly meetings within each department. “There, small groups of doctors look at their data and discuss how each of them can improve,” Dr. Pearl noted.
The 360-degree review is valuable but has some problems
Physicians should be getting a lot more feedback about their behavior than they are actually getting, according to Milton Hammerly, MD, chief medical officer at QualChoice Health Insurance in Little Rock, Ark.
“After residency, you get very little feedback on your work,” said Dr. Hammerly, who used to work for a hospital system. “Annual reviews for physicians focus almost exclusively on outcomes, productivity, and quality metrics, but not on people skills, what is called ‘emotional intelligence.’ ”
Dr. Hammerly said he saw the consequence of this lack of education when he was vice president for medical affairs at the hospital system. He was constantly dealing with physicians who exhibited serious disruptive behavior and had to be disciplined. “If only they had gotten a little help earlier on,” he noted.
Dr. Hammerly said that 360-degree evaluations, which are common in corporations but rarely used for physicians, could benefit the profession. He discovered the 360-degree evaluation when it was used for him at QualChoice, and he has been a fan ever since.
The approach involves collecting evaluations of you from your boss, your peers, and from people who work for you. That is, from 360 degrees around you. These people are asked to rate your strengths and weaknesses in a variety of competencies. In this way, you get feedback from all of your work relationships, not just from your boss.
Ideally, the evaluators are anonymous, and the subject works with a facilitator to process the information. But 360-degree evaluations can be done in all kinds of ways.
Critics of the 360-degree evaluations say the usual anonymity of evaluators allows them to be too harsh. Also, evaluators may be too subjective: What they say about you says more about their own perspective than anything about you.
But many people think 360-degree evaluations are at least going in the right direction, because they focus on people skills rather than just meeting metrics.
Robert Centor, MD, an internist in Birmingham, Ala., and a member of the performance measures committee of the American College of Physicians, said the best way to improve performance is to have conversations about your work with colleagues on the department level. “For example, 20 doctors could meet to discuss a certain issue, such as the need for more vaccinations. That doesn’t have to get rewarded with a bonus payment.”
Dr. Pearl said that “doctors need feedback from their colleagues. Without feedback, how else do you get better? You can only improve if you can know how you’re performing, compared to others.”
A version of this article originally appeared on Medscape.com.
COVID-19: What will happen to physician income this year?
“At a combined system and hospital board meeting yesterday, there was a financial presentation,” said a cardiologist in Minnesota, who declined to be named. “We have ‘salary support’ through May 16, which means we will be receiving base pay at our 2019 level. After May 16, I think it’s fairly certain salaries will be decreased.”
A general internist in the same area added: “The system has decided to pay physicians and other employees for 8 weeks, until May 15, and they are borrowing about $150 million to do this. We don’t know what will happen after May 15, but we are supposed to have an update in early May.”
Physician income is of huge interest, and many aspects of it are discussed in Medscape’s Physician Compensation Report 2020, just released.
The worst may be yet to come
Of all the categories of physicians, “I am worried about private practices the most,” said Travis Singleton, senior vice president at Merritt Hawkins, a physician search firm. “They don’t have a financial cushion, and will start seeing big drops in revenue at the end of May.”
“A lot of the A/R [accounts receivables] for practices come within 30 days, and very little comes in after 90 days,” said Terrence R. McWilliams, MD, chief clinical consultant at HSG Advisors, a consultancy for not-for-profit hospitals and their employed physician networks around the country. “So private practices are reaching the point where prior A/R will start to dwindle and they will start feeling the decline in new claims submissions.”
Large practices may have a bigger financial cushion, but in many cases, they also have more liabilities. “We don’t know the financial loss yet, but I think it’s been devastating,” said Paul M. Yonover, MD, a urologist at UroPartners, a large single-specialty practice in Chicago with 62 urologists. “In fact, the financial loss may well be larger than our loss in volume, because we have to support our own surgery center, pathology lab, radiation center, and other in-house services.”
Employed physicians in limbo
In contrast to physicians in private practices, many employed physicians at hospitals and health systems have been shielded from the impact of COVID-19 – at least for now.
“The experiences of employed physicians are very mixed,” said Mr. Singleton at Merritt Hawkins. “Some health systems have reduced physicians’ pay by 20%, but other systems have been putting off any reductions.”
Hospitals and health systems are struggling. “Stopping elective surgeries deeply affected hospitals,” said Ryan Inman, founder of Physician Wealth Services in San Diego. “With fewer elective surgeries, they have much less income coming in. Some big hospitals that are pillars of their community are under great financial stress.”
“Hospitals’ patient volumes have fallen by 50%-90%,” Mr. McWilliams reported. “Lower volume means lower pay for employed physicians, who are paid by straight productivity or other models that require high volumes. However, some health systems have intervened to make sure these physicians get some money.”
Base pay is often safe for now, but quarterly bonuses are on the chopping block. “Employed physicians are often getting a guaranteed salary for a month or two, but no bonuses or extra distributions,” said Joel Greenwald, MD, a financial adviser for physicians in St. Louis Park, Minn., a state mecca for physician employment. “They’ve been told that they will continue to get their base salary but forget about the quarterly bonuses. This amounts to salary reductions of 10%-30%.”
Ensuring payment for these doctors means lowering their productivity benchmarks, but the benchmarks might still be too high for these times. An internist at a large health system in Minneapolis–St. Paul reports that, at a lunch meeting, employed doctors learned that payment benchmarks will be reduced to 70% of their 2019 monthly average.
“I am seeing nowhere near 70% of what I was seeing last year,” he said in an interview, asking that his name not be used. “Given how slow things have been, I am probably closer to 30%, but have not been given any data on this, so I am guessing at this point.”
Adapting to a brave new world
Even as they face a dark financial future, physicians have had to completely revamp the way they practice medicine – a cumbersome process that, in itself, incurred some financial losses. They had to obtain masks and other PPE, reposition or even close down their waiting rooms, cut back on unneeded staff, and adapt to telemedicine.
“It’s been an incredibly challenging time,” said Dr. Yonover, the Chicago urologist. “As a doctor. I cannot avoid contact, and it’s not totally clear yet how the virus spreads. But I don’t have the option of closing the door. As a practice owner, you’re responsible for the health and well-being of employees, patients, and the business.”
“A practice’s daily routine is somewhat slower and costlier,” said David N. Gans, MSHA, senior fellow at the Medical Group Management Association (MGMA), which represents group practices. “Between each patient, you have to clean a lot more than previously, and you have to stock up on PPE such as masks and gowns. PPE used to be limited to infectious patients, but now it’s universal.”
At PA Clinical Network, a clinically integrated network in Pennsylvania, volume fell 40%-50% and income fell 30%-50% from late March to late April, according to Jaan Sidorov, MD, an internist who is CEO of the network, which has 158 physicians in a variety of specialties working in 54 practices around the state.
“Revenue went down but it didn’t crash,” he said. “And our physicians pivoted very quickly. They adapted to telehealth and applied for the federal loan programs. They didn’t use waiting rooms. In some cases, staff was out in the parking lot, putting stethoscopes through patients’ windows.”
“None of the practices closed, not even temporarily,” Dr. Sidorov said. “But clearly this cannot go forever without having serious consequences.”
How much can telemedicine help?
Telemedicine has been a lifeline for many struggling practices. “As much as 20%-40% of a practice’s losses can be recouped through telemedicine, depending on variables like patients’ attitudes,” said Mr. Singleton at Merritt Hawkins.
The rise in telemedicine was made possible by a temporary relaxation of the limits on telemedicine payments by Medicare and many private payers. Medicare is currently paying the same rates for telemedicine as it does for in-office visits.
In a recent MGMA Stat survey, 97% of practices reported that they had taken up telemedicine, according to Mr. Gans. He estimates that 80% of primary care could be converted to telemedicine, including medication refills, ongoing care of chronic patients, and recording patients’ vital signs from home.
Some primary care physicians are now using telemedicine for 100% of their visits. “I voluntarily closed my practice weeks ago except for virtual visits due to the risk of exposure for my patients,” a doctor in South Carolina told the Primary Care Collaborative in mid-April. “I continue to pay my staff out of pocket but have reduced hours and am not receiving any income myself.”
However, Mr. Inman of Physician Wealth Services said family medicine clients using telemedicine for all of their patients are earning less per visit, even though the Medicare reimbursement is the same as for an office visit. “They earn less because they cannot charge for any ancillaries, such as labs or imaging,” he said.
“Telemedicine has its limits,” Mr. Singleton said. It cannot replace elective surgeries, and even in primary care practices, “there is a lot of work for which patients have to come in, such as physicals or providing vaccines,” he said. “I know of one doctor who has refrigerator full of vaccines to give out. That pays his bills.”
In many cases, “telemedicine” simply means using the phone, with no video. Many patients can only use the phone, and Medicare now reimburses for some kinds of phone visits. In a mid-April survey of primary care providers, 44% were using the telephone for the majority of their visits, and 14% were not using video at all. Medicare recently decided to pay physicians the same amount for telephone visits as in-person visits.
Financial boosts will run out soon
Many private practices are surviving only because they have managed to tap into new federal programs that can finance them for the short-term. Here are the main examples:
Receiving advance Medicare payments. Through the Medicare Accelerated and Advance Payment Program, physicians can be paid up to 3 months of their average Medicare reimbursement in advance. However, repayment starts 120 days after receiving the money and must be completed within 210 days.
Obtaining a federal loan. Under the Paycheck Protection Program (PPP), which is available to all kinds of small businesses, practices can apply for up to 2.5 times their average monthly payroll costs.
PPP money can be used for payroll, rent, mortgage interest, or utility payments for up to 8 weeks. The loan will be entirely forgiven as long as the rules are followed. For example, three quarters of the money must go to payroll, and laid-off employees must be rehired by June 30.
There was such a rush for the first round of PPP loans that many physicians failed to get the loan. “Many of my physician clients applied for the loan as soon as they could, but none of them got it,” said Mr. Inman, the San Diego financial adviser. “We are hoping that the next round of funding will provide them some relief.” The second round started on April 27.
Physicians who have already obtained the PPP loan are very relieved. “This loan made it possible for us to pay our employees,” said George W. Monks, MD, a dermatologist in Tulsa, Okla., and president of the Oklahoma Medical Association.
Staff benefiting from higher unemployment payments. Many practices and hospitals are laying off their staff so that they can collect unemployment benefits. This is a good time to do that because the federal government has boosted unemployment payments by $600 a week, creating a total benefit that is greater than many people earned at their regular jobs.
This extra boost ends in July, but practices with PPP loans will have to rehire their laid-off workers a month before that. Getting laid-off staffers to come back in is going to be critical, and some practices are already having a hard time convincing them to come back, said Michael La Penna, a physician practice manager in Grand Rapids, Mich.
“They are finding that those people don’t want to come back in yet,” he said. “In many cases they have to care for children at home or have been getting generous unemployment checks.”
The problem with all these temporary financial boosts is that they will disappear within weeks or months from now. Mr. La Penna is concerned that the sudden loss of this support could send some practices spinning into bankruptcy. “Unless volume gets better very soon, time is running out for a lot of practices,” he said.
Hospitals, which also have been depending on federal assistance, may run out of money, too. Daniel Wrenne, a financial planner for physicians in Lexington, Ky., said smaller hospitals are particularly vulnerable because they lack the capital. He said a friend who is an attorney for hospitals predicted that 25% of small regional hospitals “won’t make it through this.”
Such financial turmoil might prompt many physicians to retire or find a new job, said Gary Price, MD, a plastic surgeon in New Haven, Conn., and president of the Physicians Foundation, an advocacy group for the profession. In a survey of doctors by the Physicians Foundation and Merritt Hawkins, released on April 21, 18% planned to retire, temporarily close their practices, or opt out of patient care, and another 14%, presumably employed physicians, planned to change jobs.
Is recovery around the corner?
In early May, practices in many parts of the country were seeing the possibility of a return to normal business – or at least what could pass for normal in these unusual times.
“From mid-March to mid-April, hospitals and practices were in panic mode,” said MGMA’s Mr. Gans. “They were focusing on the here and now. But from mid-April to mid-May, they could begin looking at the big picture and decide how they will get back into business.”
Surgeons devastated by bans on elective surgeries might see a bounce in cases, as the backlog of patients comes back in. By late April, 10 states reinstituted elective surgeries, including California, Arizona, Georgia, Indiana, Colorado, and Oklahoma, and New York has reinstituted elective surgeries for some counties.
Dr. Price said he hopes to reopen his plastic surgery practice by the end of June. “If it takes longer than that, I’m not sure that the practice will survive.” His PPP loan would have run out and he would have to lay off his staff. “At that point, ongoing viability of practice would become a real question.”
Dr. Monks said he hopes a lot more patients will come to his dermatology practice. As of the end of April, “we’re starting to see an uptick in the number of patients wanting to come in,” he said. “They seem to be more comfortable with the new world we’re living in.
“Viewing the backlog of cases that haven’t been attended to,” Dr. Monks added, “I think we’ll be really busy for a while.”
But Mr. La Penna said he thinks the expected backlog of elective patients will be more like a trickle than a flood. “Many patients aren’t going to want to return that fast,” he said. “They may have a condition that makes exposure to COVID-19 more risky, like diabetes or high blood pressure, or they’re elderly, or they live in a household with one of these risk groups.”
Andrew Musbach, cofounder of MD Wealth Management in Chelsea, Mich., said he expects a slow recovery for primary care physicians as well. “Even when the lockdowns are over, not everyone is going to feel comfortable coming to a hospital or visiting a doctor’s office unless it’s absolutely necessary,” he said.
Getting back to normal patient volumes will involve finding better ways to protect patients and staff from COVID-19, Dr. Yonover said. At his urology practice, “we take all the usual precautions, but nothing yet has made it dramatically easier to protect patients and staff,” he said. “Rapid, accurate testing for COVID-19 would change the landscape, but I have no idea when that will come.”
Mr. Wrenne advises his physician clients that a financial recovery will take months. “I tell them to plan for 6 months, until October, before income returns to pre–COVID-19 levels. Reimbursement lags appointments by as much as 3 months, plus it will probably take the economy 2-3 months more to get back to normal.”
“We are facing a recession, and how long it will last is anyone’s guess,” said Alex Kilian, a physician wealth manager at Aldrich Wealth in San Diego. “The federal government’s efforts to stimulate the economy is keeping it from crashing, but there are no real signs that it will actually pick up. It may take years for the travel and entertainment industries to come back.”
A recession means patients will have less spending power, and health care sectors like laser eye surgery may be damaged for years to come, said John B. Pinto, an ophthalmology practice management consultant in San Diego. “[That kind of surgery] is purely elective and relatively costly,” he said. “When people get back to work, they are going to be building up their savings and avoiding new debt. They won’t be having [laser eye surgery].”
“There won’t be any quick return to normal for me,” said Dr. Price, the Connecticut plastic surgeon. “The damage this time will probably be worse than in the Great Recession. Back then, plastic surgery was off by 20%, but this time you have the extra problem of patients reluctant to come into medical offices.”
“To get patients to come in, facilities are going to have to convince patients that they are safe,” Mr. Singleton said. “That may mean undertaking some marketing and promotion, and hospitals tend to be much better at that than practices.”
What a new wave of COVID-19 would mean
Some states have begun reopening public places, which could signal patients to return to doctors’ offices even though doctors’ offices were never officially closed. Oklahoma, for example, reopened restaurants, movie theaters, and sports venues on May 1.
Dr. Monks, president of the Oklahoma Medical Association, said his group opposes states reopening. “The governor’s order is too hasty and overly ambitious,” he said. “Oklahoma has seen an ongoing growth in the number of cases, hospitalizations, and deaths in the past week alone [in late April].”
The concern is that opening up public places too soon would create a new wave of COVID-19, which would not only be a public health disaster, but also a financial disaster for physicians. Doctors would be back where they were in March, but unlike in March, they would not benefit from revenues from previously busy times.
Mr. Pinto said the number of COVID-19 cases will rise and fall in the next 2 years, forcing states to reenact new bans on public gatherings and on elective surgeries until the numbers subside again.
Mr. Pinto said authorities in Singapore have successfully handled such waves of the disease through short bans that are tantamount to tapping the brakes of a car. “As the car gathers speed down the hill, you tap the brake,” he said. “I suspect we’ll be seeing a lot of brake-tapping until a vaccine can be developed and distributed.”
Gary LeRoy, MD, president of the American Academy of Family Physicians, recalled the worldwide Spanish Flu pandemic a century ago. “People were allowed out of their houses after 2 months, and the flu spiked up again,” he said. “I hope we don’t make that mistake this time.”
Dr. LeRoy said it’s not possible to predict how the COVID-19 crisis will play out. “What will the future be like? I don’t know the answer,” he said. “The information we learn in next hours, days, or months will probably change everything.”
A version of this article originally appeared on Medscape.com.
“At a combined system and hospital board meeting yesterday, there was a financial presentation,” said a cardiologist in Minnesota, who declined to be named. “We have ‘salary support’ through May 16, which means we will be receiving base pay at our 2019 level. After May 16, I think it’s fairly certain salaries will be decreased.”
A general internist in the same area added: “The system has decided to pay physicians and other employees for 8 weeks, until May 15, and they are borrowing about $150 million to do this. We don’t know what will happen after May 15, but we are supposed to have an update in early May.”
Physician income is of huge interest, and many aspects of it are discussed in Medscape’s Physician Compensation Report 2020, just released.
The worst may be yet to come
Of all the categories of physicians, “I am worried about private practices the most,” said Travis Singleton, senior vice president at Merritt Hawkins, a physician search firm. “They don’t have a financial cushion, and will start seeing big drops in revenue at the end of May.”
“A lot of the A/R [accounts receivables] for practices come within 30 days, and very little comes in after 90 days,” said Terrence R. McWilliams, MD, chief clinical consultant at HSG Advisors, a consultancy for not-for-profit hospitals and their employed physician networks around the country. “So private practices are reaching the point where prior A/R will start to dwindle and they will start feeling the decline in new claims submissions.”
Large practices may have a bigger financial cushion, but in many cases, they also have more liabilities. “We don’t know the financial loss yet, but I think it’s been devastating,” said Paul M. Yonover, MD, a urologist at UroPartners, a large single-specialty practice in Chicago with 62 urologists. “In fact, the financial loss may well be larger than our loss in volume, because we have to support our own surgery center, pathology lab, radiation center, and other in-house services.”
Employed physicians in limbo
In contrast to physicians in private practices, many employed physicians at hospitals and health systems have been shielded from the impact of COVID-19 – at least for now.
“The experiences of employed physicians are very mixed,” said Mr. Singleton at Merritt Hawkins. “Some health systems have reduced physicians’ pay by 20%, but other systems have been putting off any reductions.”
Hospitals and health systems are struggling. “Stopping elective surgeries deeply affected hospitals,” said Ryan Inman, founder of Physician Wealth Services in San Diego. “With fewer elective surgeries, they have much less income coming in. Some big hospitals that are pillars of their community are under great financial stress.”
“Hospitals’ patient volumes have fallen by 50%-90%,” Mr. McWilliams reported. “Lower volume means lower pay for employed physicians, who are paid by straight productivity or other models that require high volumes. However, some health systems have intervened to make sure these physicians get some money.”
Base pay is often safe for now, but quarterly bonuses are on the chopping block. “Employed physicians are often getting a guaranteed salary for a month or two, but no bonuses or extra distributions,” said Joel Greenwald, MD, a financial adviser for physicians in St. Louis Park, Minn., a state mecca for physician employment. “They’ve been told that they will continue to get their base salary but forget about the quarterly bonuses. This amounts to salary reductions of 10%-30%.”
Ensuring payment for these doctors means lowering their productivity benchmarks, but the benchmarks might still be too high for these times. An internist at a large health system in Minneapolis–St. Paul reports that, at a lunch meeting, employed doctors learned that payment benchmarks will be reduced to 70% of their 2019 monthly average.
“I am seeing nowhere near 70% of what I was seeing last year,” he said in an interview, asking that his name not be used. “Given how slow things have been, I am probably closer to 30%, but have not been given any data on this, so I am guessing at this point.”
Adapting to a brave new world
Even as they face a dark financial future, physicians have had to completely revamp the way they practice medicine – a cumbersome process that, in itself, incurred some financial losses. They had to obtain masks and other PPE, reposition or even close down their waiting rooms, cut back on unneeded staff, and adapt to telemedicine.
“It’s been an incredibly challenging time,” said Dr. Yonover, the Chicago urologist. “As a doctor. I cannot avoid contact, and it’s not totally clear yet how the virus spreads. But I don’t have the option of closing the door. As a practice owner, you’re responsible for the health and well-being of employees, patients, and the business.”
“A practice’s daily routine is somewhat slower and costlier,” said David N. Gans, MSHA, senior fellow at the Medical Group Management Association (MGMA), which represents group practices. “Between each patient, you have to clean a lot more than previously, and you have to stock up on PPE such as masks and gowns. PPE used to be limited to infectious patients, but now it’s universal.”
At PA Clinical Network, a clinically integrated network in Pennsylvania, volume fell 40%-50% and income fell 30%-50% from late March to late April, according to Jaan Sidorov, MD, an internist who is CEO of the network, which has 158 physicians in a variety of specialties working in 54 practices around the state.
“Revenue went down but it didn’t crash,” he said. “And our physicians pivoted very quickly. They adapted to telehealth and applied for the federal loan programs. They didn’t use waiting rooms. In some cases, staff was out in the parking lot, putting stethoscopes through patients’ windows.”
“None of the practices closed, not even temporarily,” Dr. Sidorov said. “But clearly this cannot go forever without having serious consequences.”
How much can telemedicine help?
Telemedicine has been a lifeline for many struggling practices. “As much as 20%-40% of a practice’s losses can be recouped through telemedicine, depending on variables like patients’ attitudes,” said Mr. Singleton at Merritt Hawkins.
The rise in telemedicine was made possible by a temporary relaxation of the limits on telemedicine payments by Medicare and many private payers. Medicare is currently paying the same rates for telemedicine as it does for in-office visits.
In a recent MGMA Stat survey, 97% of practices reported that they had taken up telemedicine, according to Mr. Gans. He estimates that 80% of primary care could be converted to telemedicine, including medication refills, ongoing care of chronic patients, and recording patients’ vital signs from home.
Some primary care physicians are now using telemedicine for 100% of their visits. “I voluntarily closed my practice weeks ago except for virtual visits due to the risk of exposure for my patients,” a doctor in South Carolina told the Primary Care Collaborative in mid-April. “I continue to pay my staff out of pocket but have reduced hours and am not receiving any income myself.”
However, Mr. Inman of Physician Wealth Services said family medicine clients using telemedicine for all of their patients are earning less per visit, even though the Medicare reimbursement is the same as for an office visit. “They earn less because they cannot charge for any ancillaries, such as labs or imaging,” he said.
“Telemedicine has its limits,” Mr. Singleton said. It cannot replace elective surgeries, and even in primary care practices, “there is a lot of work for which patients have to come in, such as physicals or providing vaccines,” he said. “I know of one doctor who has refrigerator full of vaccines to give out. That pays his bills.”
In many cases, “telemedicine” simply means using the phone, with no video. Many patients can only use the phone, and Medicare now reimburses for some kinds of phone visits. In a mid-April survey of primary care providers, 44% were using the telephone for the majority of their visits, and 14% were not using video at all. Medicare recently decided to pay physicians the same amount for telephone visits as in-person visits.
Financial boosts will run out soon
Many private practices are surviving only because they have managed to tap into new federal programs that can finance them for the short-term. Here are the main examples:
Receiving advance Medicare payments. Through the Medicare Accelerated and Advance Payment Program, physicians can be paid up to 3 months of their average Medicare reimbursement in advance. However, repayment starts 120 days after receiving the money and must be completed within 210 days.
Obtaining a federal loan. Under the Paycheck Protection Program (PPP), which is available to all kinds of small businesses, practices can apply for up to 2.5 times their average monthly payroll costs.
PPP money can be used for payroll, rent, mortgage interest, or utility payments for up to 8 weeks. The loan will be entirely forgiven as long as the rules are followed. For example, three quarters of the money must go to payroll, and laid-off employees must be rehired by June 30.
There was such a rush for the first round of PPP loans that many physicians failed to get the loan. “Many of my physician clients applied for the loan as soon as they could, but none of them got it,” said Mr. Inman, the San Diego financial adviser. “We are hoping that the next round of funding will provide them some relief.” The second round started on April 27.
Physicians who have already obtained the PPP loan are very relieved. “This loan made it possible for us to pay our employees,” said George W. Monks, MD, a dermatologist in Tulsa, Okla., and president of the Oklahoma Medical Association.
Staff benefiting from higher unemployment payments. Many practices and hospitals are laying off their staff so that they can collect unemployment benefits. This is a good time to do that because the federal government has boosted unemployment payments by $600 a week, creating a total benefit that is greater than many people earned at their regular jobs.
This extra boost ends in July, but practices with PPP loans will have to rehire their laid-off workers a month before that. Getting laid-off staffers to come back in is going to be critical, and some practices are already having a hard time convincing them to come back, said Michael La Penna, a physician practice manager in Grand Rapids, Mich.
“They are finding that those people don’t want to come back in yet,” he said. “In many cases they have to care for children at home or have been getting generous unemployment checks.”
The problem with all these temporary financial boosts is that they will disappear within weeks or months from now. Mr. La Penna is concerned that the sudden loss of this support could send some practices spinning into bankruptcy. “Unless volume gets better very soon, time is running out for a lot of practices,” he said.
Hospitals, which also have been depending on federal assistance, may run out of money, too. Daniel Wrenne, a financial planner for physicians in Lexington, Ky., said smaller hospitals are particularly vulnerable because they lack the capital. He said a friend who is an attorney for hospitals predicted that 25% of small regional hospitals “won’t make it through this.”
Such financial turmoil might prompt many physicians to retire or find a new job, said Gary Price, MD, a plastic surgeon in New Haven, Conn., and president of the Physicians Foundation, an advocacy group for the profession. In a survey of doctors by the Physicians Foundation and Merritt Hawkins, released on April 21, 18% planned to retire, temporarily close their practices, or opt out of patient care, and another 14%, presumably employed physicians, planned to change jobs.
Is recovery around the corner?
In early May, practices in many parts of the country were seeing the possibility of a return to normal business – or at least what could pass for normal in these unusual times.
“From mid-March to mid-April, hospitals and practices were in panic mode,” said MGMA’s Mr. Gans. “They were focusing on the here and now. But from mid-April to mid-May, they could begin looking at the big picture and decide how they will get back into business.”
Surgeons devastated by bans on elective surgeries might see a bounce in cases, as the backlog of patients comes back in. By late April, 10 states reinstituted elective surgeries, including California, Arizona, Georgia, Indiana, Colorado, and Oklahoma, and New York has reinstituted elective surgeries for some counties.
Dr. Price said he hopes to reopen his plastic surgery practice by the end of June. “If it takes longer than that, I’m not sure that the practice will survive.” His PPP loan would have run out and he would have to lay off his staff. “At that point, ongoing viability of practice would become a real question.”
Dr. Monks said he hopes a lot more patients will come to his dermatology practice. As of the end of April, “we’re starting to see an uptick in the number of patients wanting to come in,” he said. “They seem to be more comfortable with the new world we’re living in.
“Viewing the backlog of cases that haven’t been attended to,” Dr. Monks added, “I think we’ll be really busy for a while.”
But Mr. La Penna said he thinks the expected backlog of elective patients will be more like a trickle than a flood. “Many patients aren’t going to want to return that fast,” he said. “They may have a condition that makes exposure to COVID-19 more risky, like diabetes or high blood pressure, or they’re elderly, or they live in a household with one of these risk groups.”
Andrew Musbach, cofounder of MD Wealth Management in Chelsea, Mich., said he expects a slow recovery for primary care physicians as well. “Even when the lockdowns are over, not everyone is going to feel comfortable coming to a hospital or visiting a doctor’s office unless it’s absolutely necessary,” he said.
Getting back to normal patient volumes will involve finding better ways to protect patients and staff from COVID-19, Dr. Yonover said. At his urology practice, “we take all the usual precautions, but nothing yet has made it dramatically easier to protect patients and staff,” he said. “Rapid, accurate testing for COVID-19 would change the landscape, but I have no idea when that will come.”
Mr. Wrenne advises his physician clients that a financial recovery will take months. “I tell them to plan for 6 months, until October, before income returns to pre–COVID-19 levels. Reimbursement lags appointments by as much as 3 months, plus it will probably take the economy 2-3 months more to get back to normal.”
“We are facing a recession, and how long it will last is anyone’s guess,” said Alex Kilian, a physician wealth manager at Aldrich Wealth in San Diego. “The federal government’s efforts to stimulate the economy is keeping it from crashing, but there are no real signs that it will actually pick up. It may take years for the travel and entertainment industries to come back.”
A recession means patients will have less spending power, and health care sectors like laser eye surgery may be damaged for years to come, said John B. Pinto, an ophthalmology practice management consultant in San Diego. “[That kind of surgery] is purely elective and relatively costly,” he said. “When people get back to work, they are going to be building up their savings and avoiding new debt. They won’t be having [laser eye surgery].”
“There won’t be any quick return to normal for me,” said Dr. Price, the Connecticut plastic surgeon. “The damage this time will probably be worse than in the Great Recession. Back then, plastic surgery was off by 20%, but this time you have the extra problem of patients reluctant to come into medical offices.”
“To get patients to come in, facilities are going to have to convince patients that they are safe,” Mr. Singleton said. “That may mean undertaking some marketing and promotion, and hospitals tend to be much better at that than practices.”
What a new wave of COVID-19 would mean
Some states have begun reopening public places, which could signal patients to return to doctors’ offices even though doctors’ offices were never officially closed. Oklahoma, for example, reopened restaurants, movie theaters, and sports venues on May 1.
Dr. Monks, president of the Oklahoma Medical Association, said his group opposes states reopening. “The governor’s order is too hasty and overly ambitious,” he said. “Oklahoma has seen an ongoing growth in the number of cases, hospitalizations, and deaths in the past week alone [in late April].”
The concern is that opening up public places too soon would create a new wave of COVID-19, which would not only be a public health disaster, but also a financial disaster for physicians. Doctors would be back where they were in March, but unlike in March, they would not benefit from revenues from previously busy times.
Mr. Pinto said the number of COVID-19 cases will rise and fall in the next 2 years, forcing states to reenact new bans on public gatherings and on elective surgeries until the numbers subside again.
Mr. Pinto said authorities in Singapore have successfully handled such waves of the disease through short bans that are tantamount to tapping the brakes of a car. “As the car gathers speed down the hill, you tap the brake,” he said. “I suspect we’ll be seeing a lot of brake-tapping until a vaccine can be developed and distributed.”
Gary LeRoy, MD, president of the American Academy of Family Physicians, recalled the worldwide Spanish Flu pandemic a century ago. “People were allowed out of their houses after 2 months, and the flu spiked up again,” he said. “I hope we don’t make that mistake this time.”
Dr. LeRoy said it’s not possible to predict how the COVID-19 crisis will play out. “What will the future be like? I don’t know the answer,” he said. “The information we learn in next hours, days, or months will probably change everything.”
A version of this article originally appeared on Medscape.com.
“At a combined system and hospital board meeting yesterday, there was a financial presentation,” said a cardiologist in Minnesota, who declined to be named. “We have ‘salary support’ through May 16, which means we will be receiving base pay at our 2019 level. After May 16, I think it’s fairly certain salaries will be decreased.”
A general internist in the same area added: “The system has decided to pay physicians and other employees for 8 weeks, until May 15, and they are borrowing about $150 million to do this. We don’t know what will happen after May 15, but we are supposed to have an update in early May.”
Physician income is of huge interest, and many aspects of it are discussed in Medscape’s Physician Compensation Report 2020, just released.
The worst may be yet to come
Of all the categories of physicians, “I am worried about private practices the most,” said Travis Singleton, senior vice president at Merritt Hawkins, a physician search firm. “They don’t have a financial cushion, and will start seeing big drops in revenue at the end of May.”
“A lot of the A/R [accounts receivables] for practices come within 30 days, and very little comes in after 90 days,” said Terrence R. McWilliams, MD, chief clinical consultant at HSG Advisors, a consultancy for not-for-profit hospitals and their employed physician networks around the country. “So private practices are reaching the point where prior A/R will start to dwindle and they will start feeling the decline in new claims submissions.”
Large practices may have a bigger financial cushion, but in many cases, they also have more liabilities. “We don’t know the financial loss yet, but I think it’s been devastating,” said Paul M. Yonover, MD, a urologist at UroPartners, a large single-specialty practice in Chicago with 62 urologists. “In fact, the financial loss may well be larger than our loss in volume, because we have to support our own surgery center, pathology lab, radiation center, and other in-house services.”
Employed physicians in limbo
In contrast to physicians in private practices, many employed physicians at hospitals and health systems have been shielded from the impact of COVID-19 – at least for now.
“The experiences of employed physicians are very mixed,” said Mr. Singleton at Merritt Hawkins. “Some health systems have reduced physicians’ pay by 20%, but other systems have been putting off any reductions.”
Hospitals and health systems are struggling. “Stopping elective surgeries deeply affected hospitals,” said Ryan Inman, founder of Physician Wealth Services in San Diego. “With fewer elective surgeries, they have much less income coming in. Some big hospitals that are pillars of their community are under great financial stress.”
“Hospitals’ patient volumes have fallen by 50%-90%,” Mr. McWilliams reported. “Lower volume means lower pay for employed physicians, who are paid by straight productivity or other models that require high volumes. However, some health systems have intervened to make sure these physicians get some money.”
Base pay is often safe for now, but quarterly bonuses are on the chopping block. “Employed physicians are often getting a guaranteed salary for a month or two, but no bonuses or extra distributions,” said Joel Greenwald, MD, a financial adviser for physicians in St. Louis Park, Minn., a state mecca for physician employment. “They’ve been told that they will continue to get their base salary but forget about the quarterly bonuses. This amounts to salary reductions of 10%-30%.”
Ensuring payment for these doctors means lowering their productivity benchmarks, but the benchmarks might still be too high for these times. An internist at a large health system in Minneapolis–St. Paul reports that, at a lunch meeting, employed doctors learned that payment benchmarks will be reduced to 70% of their 2019 monthly average.
“I am seeing nowhere near 70% of what I was seeing last year,” he said in an interview, asking that his name not be used. “Given how slow things have been, I am probably closer to 30%, but have not been given any data on this, so I am guessing at this point.”
Adapting to a brave new world
Even as they face a dark financial future, physicians have had to completely revamp the way they practice medicine – a cumbersome process that, in itself, incurred some financial losses. They had to obtain masks and other PPE, reposition or even close down their waiting rooms, cut back on unneeded staff, and adapt to telemedicine.
“It’s been an incredibly challenging time,” said Dr. Yonover, the Chicago urologist. “As a doctor. I cannot avoid contact, and it’s not totally clear yet how the virus spreads. But I don’t have the option of closing the door. As a practice owner, you’re responsible for the health and well-being of employees, patients, and the business.”
“A practice’s daily routine is somewhat slower and costlier,” said David N. Gans, MSHA, senior fellow at the Medical Group Management Association (MGMA), which represents group practices. “Between each patient, you have to clean a lot more than previously, and you have to stock up on PPE such as masks and gowns. PPE used to be limited to infectious patients, but now it’s universal.”
At PA Clinical Network, a clinically integrated network in Pennsylvania, volume fell 40%-50% and income fell 30%-50% from late March to late April, according to Jaan Sidorov, MD, an internist who is CEO of the network, which has 158 physicians in a variety of specialties working in 54 practices around the state.
“Revenue went down but it didn’t crash,” he said. “And our physicians pivoted very quickly. They adapted to telehealth and applied for the federal loan programs. They didn’t use waiting rooms. In some cases, staff was out in the parking lot, putting stethoscopes through patients’ windows.”
“None of the practices closed, not even temporarily,” Dr. Sidorov said. “But clearly this cannot go forever without having serious consequences.”
How much can telemedicine help?
Telemedicine has been a lifeline for many struggling practices. “As much as 20%-40% of a practice’s losses can be recouped through telemedicine, depending on variables like patients’ attitudes,” said Mr. Singleton at Merritt Hawkins.
The rise in telemedicine was made possible by a temporary relaxation of the limits on telemedicine payments by Medicare and many private payers. Medicare is currently paying the same rates for telemedicine as it does for in-office visits.
In a recent MGMA Stat survey, 97% of practices reported that they had taken up telemedicine, according to Mr. Gans. He estimates that 80% of primary care could be converted to telemedicine, including medication refills, ongoing care of chronic patients, and recording patients’ vital signs from home.
Some primary care physicians are now using telemedicine for 100% of their visits. “I voluntarily closed my practice weeks ago except for virtual visits due to the risk of exposure for my patients,” a doctor in South Carolina told the Primary Care Collaborative in mid-April. “I continue to pay my staff out of pocket but have reduced hours and am not receiving any income myself.”
However, Mr. Inman of Physician Wealth Services said family medicine clients using telemedicine for all of their patients are earning less per visit, even though the Medicare reimbursement is the same as for an office visit. “They earn less because they cannot charge for any ancillaries, such as labs or imaging,” he said.
“Telemedicine has its limits,” Mr. Singleton said. It cannot replace elective surgeries, and even in primary care practices, “there is a lot of work for which patients have to come in, such as physicals or providing vaccines,” he said. “I know of one doctor who has refrigerator full of vaccines to give out. That pays his bills.”
In many cases, “telemedicine” simply means using the phone, with no video. Many patients can only use the phone, and Medicare now reimburses for some kinds of phone visits. In a mid-April survey of primary care providers, 44% were using the telephone for the majority of their visits, and 14% were not using video at all. Medicare recently decided to pay physicians the same amount for telephone visits as in-person visits.
Financial boosts will run out soon
Many private practices are surviving only because they have managed to tap into new federal programs that can finance them for the short-term. Here are the main examples:
Receiving advance Medicare payments. Through the Medicare Accelerated and Advance Payment Program, physicians can be paid up to 3 months of their average Medicare reimbursement in advance. However, repayment starts 120 days after receiving the money and must be completed within 210 days.
Obtaining a federal loan. Under the Paycheck Protection Program (PPP), which is available to all kinds of small businesses, practices can apply for up to 2.5 times their average monthly payroll costs.
PPP money can be used for payroll, rent, mortgage interest, or utility payments for up to 8 weeks. The loan will be entirely forgiven as long as the rules are followed. For example, three quarters of the money must go to payroll, and laid-off employees must be rehired by June 30.
There was such a rush for the first round of PPP loans that many physicians failed to get the loan. “Many of my physician clients applied for the loan as soon as they could, but none of them got it,” said Mr. Inman, the San Diego financial adviser. “We are hoping that the next round of funding will provide them some relief.” The second round started on April 27.
Physicians who have already obtained the PPP loan are very relieved. “This loan made it possible for us to pay our employees,” said George W. Monks, MD, a dermatologist in Tulsa, Okla., and president of the Oklahoma Medical Association.
Staff benefiting from higher unemployment payments. Many practices and hospitals are laying off their staff so that they can collect unemployment benefits. This is a good time to do that because the federal government has boosted unemployment payments by $600 a week, creating a total benefit that is greater than many people earned at their regular jobs.
This extra boost ends in July, but practices with PPP loans will have to rehire their laid-off workers a month before that. Getting laid-off staffers to come back in is going to be critical, and some practices are already having a hard time convincing them to come back, said Michael La Penna, a physician practice manager in Grand Rapids, Mich.
“They are finding that those people don’t want to come back in yet,” he said. “In many cases they have to care for children at home or have been getting generous unemployment checks.”
The problem with all these temporary financial boosts is that they will disappear within weeks or months from now. Mr. La Penna is concerned that the sudden loss of this support could send some practices spinning into bankruptcy. “Unless volume gets better very soon, time is running out for a lot of practices,” he said.
Hospitals, which also have been depending on federal assistance, may run out of money, too. Daniel Wrenne, a financial planner for physicians in Lexington, Ky., said smaller hospitals are particularly vulnerable because they lack the capital. He said a friend who is an attorney for hospitals predicted that 25% of small regional hospitals “won’t make it through this.”
Such financial turmoil might prompt many physicians to retire or find a new job, said Gary Price, MD, a plastic surgeon in New Haven, Conn., and president of the Physicians Foundation, an advocacy group for the profession. In a survey of doctors by the Physicians Foundation and Merritt Hawkins, released on April 21, 18% planned to retire, temporarily close their practices, or opt out of patient care, and another 14%, presumably employed physicians, planned to change jobs.
Is recovery around the corner?
In early May, practices in many parts of the country were seeing the possibility of a return to normal business – or at least what could pass for normal in these unusual times.
“From mid-March to mid-April, hospitals and practices were in panic mode,” said MGMA’s Mr. Gans. “They were focusing on the here and now. But from mid-April to mid-May, they could begin looking at the big picture and decide how they will get back into business.”
Surgeons devastated by bans on elective surgeries might see a bounce in cases, as the backlog of patients comes back in. By late April, 10 states reinstituted elective surgeries, including California, Arizona, Georgia, Indiana, Colorado, and Oklahoma, and New York has reinstituted elective surgeries for some counties.
Dr. Price said he hopes to reopen his plastic surgery practice by the end of June. “If it takes longer than that, I’m not sure that the practice will survive.” His PPP loan would have run out and he would have to lay off his staff. “At that point, ongoing viability of practice would become a real question.”
Dr. Monks said he hopes a lot more patients will come to his dermatology practice. As of the end of April, “we’re starting to see an uptick in the number of patients wanting to come in,” he said. “They seem to be more comfortable with the new world we’re living in.
“Viewing the backlog of cases that haven’t been attended to,” Dr. Monks added, “I think we’ll be really busy for a while.”
But Mr. La Penna said he thinks the expected backlog of elective patients will be more like a trickle than a flood. “Many patients aren’t going to want to return that fast,” he said. “They may have a condition that makes exposure to COVID-19 more risky, like diabetes or high blood pressure, or they’re elderly, or they live in a household with one of these risk groups.”
Andrew Musbach, cofounder of MD Wealth Management in Chelsea, Mich., said he expects a slow recovery for primary care physicians as well. “Even when the lockdowns are over, not everyone is going to feel comfortable coming to a hospital or visiting a doctor’s office unless it’s absolutely necessary,” he said.
Getting back to normal patient volumes will involve finding better ways to protect patients and staff from COVID-19, Dr. Yonover said. At his urology practice, “we take all the usual precautions, but nothing yet has made it dramatically easier to protect patients and staff,” he said. “Rapid, accurate testing for COVID-19 would change the landscape, but I have no idea when that will come.”
Mr. Wrenne advises his physician clients that a financial recovery will take months. “I tell them to plan for 6 months, until October, before income returns to pre–COVID-19 levels. Reimbursement lags appointments by as much as 3 months, plus it will probably take the economy 2-3 months more to get back to normal.”
“We are facing a recession, and how long it will last is anyone’s guess,” said Alex Kilian, a physician wealth manager at Aldrich Wealth in San Diego. “The federal government’s efforts to stimulate the economy is keeping it from crashing, but there are no real signs that it will actually pick up. It may take years for the travel and entertainment industries to come back.”
A recession means patients will have less spending power, and health care sectors like laser eye surgery may be damaged for years to come, said John B. Pinto, an ophthalmology practice management consultant in San Diego. “[That kind of surgery] is purely elective and relatively costly,” he said. “When people get back to work, they are going to be building up their savings and avoiding new debt. They won’t be having [laser eye surgery].”
“There won’t be any quick return to normal for me,” said Dr. Price, the Connecticut plastic surgeon. “The damage this time will probably be worse than in the Great Recession. Back then, plastic surgery was off by 20%, but this time you have the extra problem of patients reluctant to come into medical offices.”
“To get patients to come in, facilities are going to have to convince patients that they are safe,” Mr. Singleton said. “That may mean undertaking some marketing and promotion, and hospitals tend to be much better at that than practices.”
What a new wave of COVID-19 would mean
Some states have begun reopening public places, which could signal patients to return to doctors’ offices even though doctors’ offices were never officially closed. Oklahoma, for example, reopened restaurants, movie theaters, and sports venues on May 1.
Dr. Monks, president of the Oklahoma Medical Association, said his group opposes states reopening. “The governor’s order is too hasty and overly ambitious,” he said. “Oklahoma has seen an ongoing growth in the number of cases, hospitalizations, and deaths in the past week alone [in late April].”
The concern is that opening up public places too soon would create a new wave of COVID-19, which would not only be a public health disaster, but also a financial disaster for physicians. Doctors would be back where they were in March, but unlike in March, they would not benefit from revenues from previously busy times.
Mr. Pinto said the number of COVID-19 cases will rise and fall in the next 2 years, forcing states to reenact new bans on public gatherings and on elective surgeries until the numbers subside again.
Mr. Pinto said authorities in Singapore have successfully handled such waves of the disease through short bans that are tantamount to tapping the brakes of a car. “As the car gathers speed down the hill, you tap the brake,” he said. “I suspect we’ll be seeing a lot of brake-tapping until a vaccine can be developed and distributed.”
Gary LeRoy, MD, president of the American Academy of Family Physicians, recalled the worldwide Spanish Flu pandemic a century ago. “People were allowed out of their houses after 2 months, and the flu spiked up again,” he said. “I hope we don’t make that mistake this time.”
Dr. LeRoy said it’s not possible to predict how the COVID-19 crisis will play out. “What will the future be like? I don’t know the answer,” he said. “The information we learn in next hours, days, or months will probably change everything.”
A version of this article originally appeared on Medscape.com.
COVID-19: Employers cut doc pay and bonuses: What’s your recourse?
Employed physicians have had to take large pay cuts, give up bonuses, go on leave, or have even been terminated. In many cases, these actions violate their contract. How can they fight them?
Michael D., MD, a colorectal surgeon employed in a large surgical practice in Georgia, is still trying to make sense of a late-night directive from the practice, received in late March.
The practice had just started seeing a steep decline in appointments because of the COVID-19 pandemic. In a hastily arranged group phone call at 11:00 p.m., the CEO told the group what would have to be done.
They would be taking a 50% reduction in salaries, their bonuses for work already done were being withheld, and they would have to use their paid time off (PTO) in order to get their full March salary.
“It’s been over 2 weeks now, and still we’ve seen nothing formalized in writing,” said Dr. D., who asked that his name not be used because he was told that, under no circumstances, should anyone talk to the media.
“They have not told us anything more since then,” he said. “There’s just been a lot of hearsay and speculation.”
Dr. D. has been in touch with employed physicians at other practices, and their experiences run the gamut. One doctor at a large multispecialty group said his salary hadn’t been reduced at all, but a cardiologist was just told he will be laid off in 60 days.
Asking for big sacrifices
As the pandemic has intensified, employed physicians have started to see massive changes in their payment arrangements. They have had to take large pay cuts, give up bonuses, go on leave, and have even been terminated.
“In my 11 years of work on physician contracts, I have never seen changes as drastic as these,” said Kyle Claussen, a physician contract attorney and CEO of Resolve, a company that advises physicians on their careers. The company is based in Columbia, Mo.
He has heard from more than 100 doctors about these proposed changes in their contracts and related matters. Even graduating residents, he said, are being told that the start dates for their new jobs will be delayed.
In many cases, these actions violate the employed physicians’ contracts, said Ericka Adler, a physician contract attorney at Roetzel & Andress in Chicago.
“Some employers are acting out of desperation and are not making legally sound decisions,” Ms. Adler said. “It’s especially upsetting when they do not try to even talk to or work with the doctor first.”
Employers making unfounded unilateral changes
Ms. Adler said some employers are simply issuing a letter to all doctors. “It goes something like, ‘Just to let you know, we are cutting compensation effective immediately,’ and this may apply across the board to all doctors,” she said.
“But the problem with letters is that this is a contractual matter,” she said. “The employer needs to renegotiate each doctor’s contract.”
Employers might insist that the unilateral changes are based on terms in the contract, but this is usually unfounded, both lawyers said. A “force majeure” clause in contracts would allow the employer to set aside terms under certain specified emergencies, and the pandemic might be one of them. But Mr. Claussen said force majeure clauses are rare in physician contracts, and Ms. Adler said she has never seen one.
Lacking a force majeure clause, employers may try to turn to a common law doctrine that allows employers to set aside a contract when it is impossible to perform its terms, owing, for example, to “an unexpected intervening event.” But this tactic is also questionable, says Ms. Adler, who also represents the employer’s side of the contract. “This is a very high standard and unlikely to be satisfied,” she said.
Employers are desperate to amend contracts
Lacking a cause to take unilateral action, many employers are desperately trying to amend their physician contracts – the subject of the plaintive emails that employed physicians started receiving in mid-March.
“Doctors are trying to decide how they will react to these documents,” Mr. Claussen said. “If they don’t sign, they run the risk of being terminated.” He is expecting termination letters for some of these doctors to start coming in 2-3 weeks.
In response to these amendments, “doctors want to reach out to their employers and see if something can be negotiated,” he said. “Some employers have been amenable, but others have so far not been.”
Ms. Adler said the amendments typically offer open-ended arrangements favoring the employer. “The document might call for a temporary pay cut until the employer thinks they can restore the old salary, but it is up to the employer to decide when that would be,” she said.
Also, when the employer owes the physician for services already performed, the amendments don’t promise to pay them the full amount owed, she said.
Ms. Adler advises doctors to ask for a provision that restoration of their original salary will occur at a definite point in time, such as 30 days after the organization is back at previous volume. And if the doctor is owed money, the doctor should ask for full payment – and to sweeten that offer, allow the employer to pay the doctor back over a period, she says.
Just in the past month, employers have been pushing for several specific changes in doctors’ employment status. Here are some changes that Mr. Claussen and Ms. Adler have been seeing.
Withholding quarterly bonuses
In March, just before quarterly bonus payments were due, employed physicians started getting notices that they would not get the bonus, Mr. Claussen said. This covered work already done, and it amounted to a lot of money because practices were busy then.
“Not paying bonuses is a very big deal because they can make up to 50% of a physician’s total compensation,” Mr. Claussen said. He added that unilaterally withholding those funds, without a change in the contract, is legally questionable.
In addition to these changes on past bonuses, he said employers are now trying to temporarily end bonuses going forward through the contract amendments. “It’s not a good idea to sign this,” he said.
Doctors paid on pure production are left in the lurch
As volume falls, some hospitals and practices are shutting down doctors’ offices for all but emergencies, leaving their employed doctors with practically nothing to do. Doctors paid purely on their productivity are devastated by this change because their income virtually goes to zero, Mr. Claussen said.
He said office shutdowns are particularly common for specialists because hospitals have been stopping elective procedures during the pandemic, but they can also happen in primary care, which has seen steep declines in patient volume, too.
Having doctors on pure production means that employers can keep doctors hired without having to pay them, Mr. Claussen said. He has seen some employers try to shift more doctors into pure production through the amended contracts.
But Ms. Adler said having doctors on pure production is actually disadvantageous for employers in the current climate. The employer may end up being owed money because of advance payments they have already made to these doctors, she said.
In any case, both lawyers agreed that doctors on a pure production model are in an untenable situation right now. Ms. Adler said they are not earning money but are still technically at work, so they cannot collect unemployment compensation, which would give them some income.
Forcing doctors to use paid time off
To provide some pay for doctors who have no volume, many employers are forcing these doctors to use up their PTO days, which typically amount to about 4 weeks, Mr. Claussen said. “These doctors have no choice in the matter,” he said.
Furthermore, while on PTO, they are being required to take call. Employers are still obligated to cover call, and there may not be enough doctors still working to fill the call schedule. But making doctors do this work on their time off may be a violation of the contract, Mr. Claussen said.
Terminating physicians
Doctors who have little to do are often put on furlough. This means they don’t get paid but they keep their benefits, Ms. Adler said. The next step, she said, is to lay them off, with the stated intention of rehiring them.
Once laid off, she said, they can get unemployment payments. “Unemployment payments may not be anywhere near what they were earning before, but they are better than not earning anything,” Ms. Adler said.
In some cases, employers are just terminating them and are offering no prospect of rehiring them, she said. Ms. Adler said terminations can be a big problem for doctors. Physicians might have to repay a signing bonus or they might lose their malpractice coverage, forcing them to buy a tail. They could also be subject to a noncompete clause, which would not allow them to practice in the area, she said.
Terminating without cause typically requires 60-90 days’ notice, which both sides might use to negotiate some changes in the contract. But Ms. Adler said some employers are firing doctors with cause, and are using legally questionable reasons to do so.
“In most cases, these employers are grasping at straws,” she said. As a result, she expects many fired doctors will file wrongful termination lawsuits. She thinks employers are better advised to negotiate with the physicians.
Delaying start dates for new physicians
Typically, graduating residents and fellows signed with their new employers months ago and are ready to start working on July 1. But some employers are pushing back the start date for several months, Mr. Claussen said.
Mr. Claussen has been helping several clients in this situation. He said these delays are often a clear violation of the employment contract. Most contracts require an amendment to change the start date, he said.
Mr. Claussen said some employers have agreed to a new start date in an amended contract, giving the new physicians a solid date to work with. Not having work can be a real problem for graduating residents, who typically have to start paying off loans.
Now physicians won’t become a new partner
Mr. Claussen said physicians who are up for becoming partner are now being told that the deal is off. With less money coming in, existing partners are not willing to share it with a new partner, and there is no work for a new partner.
“The promise to make them partner is usually a verbal promise, so it is much less likely to be a breach of contract,” he said. “It is frustrating for physicians who were expecting to become partner.”
What can physicians do?
When employers present changes to them, physicians often feel their hands are tied, Ms. Adler said. In these dangerous times, they are expected to make sacrifices to keep the organization from going out of business.
Even if they wanted to file suits against their employer, “they can’t go to court right now because the courts are closed,” Ms. Adler said. “Employers are banking on doctors not doing anything.”
In most cases, however, doctors don’t have to act right away, she said. “Just because you have not reacted to the new situation does not mean you accepted it,” she said. “You can wait months, even years to file a lawsuit, depending on the state and the cause of action.”
Ms. Adler recommended that doctors make it clear that they don’t agree with the changes. An attorney experienced in physician contracts can review the changes being made and the amended contracts being offered.
Thanks to recent federal changes, employers have to have some ways to continue paying physicians, Ms. Adler said. Medical practices with fewer than 500 employees can get loans from the federal government that would not have to be repaid if they met certain stipulations, such as hiring back all the employees they terminate, she said.
Mr. Claussen said physicians should resist the obvious dangers, such as a shift to a pure production salary, denying bonus payments for work already done, and forcing physicians you use up PTO days.
He also suggested persuading employers to postpone rather than eliminate payments. “Some employers have agreed to postpone payments until a date later in 2020 rather than eliminate them,” he said. “The aim is that the organization will be back on its feet at that time.”
Mr. Claussen said he is trying to limit the contract amendments to 1 or 2 months. Because the situation caused by the pandemic is so fluid, “this allows for flexibility,” he said. “We can revisit the situation and come up with different changes.”
Ms. Adler doubts employers would accept short-term changes with a definite end date because such changes would not be in the employer’s interest. But Mr. Claussen said one employer has agreed to reevaluate its contracts in June.
Both lawyers agreed that many employers are trying to work with their physicians. “In 90% of the cases I have seen, both sides cooperate,” Ms. Adler said. “Because of the situation, people are being much more conciliatory than they would have been.”
A version of this article originally appeared on Medscape.com.
Employed physicians have had to take large pay cuts, give up bonuses, go on leave, or have even been terminated. In many cases, these actions violate their contract. How can they fight them?
Michael D., MD, a colorectal surgeon employed in a large surgical practice in Georgia, is still trying to make sense of a late-night directive from the practice, received in late March.
The practice had just started seeing a steep decline in appointments because of the COVID-19 pandemic. In a hastily arranged group phone call at 11:00 p.m., the CEO told the group what would have to be done.
They would be taking a 50% reduction in salaries, their bonuses for work already done were being withheld, and they would have to use their paid time off (PTO) in order to get their full March salary.
“It’s been over 2 weeks now, and still we’ve seen nothing formalized in writing,” said Dr. D., who asked that his name not be used because he was told that, under no circumstances, should anyone talk to the media.
“They have not told us anything more since then,” he said. “There’s just been a lot of hearsay and speculation.”
Dr. D. has been in touch with employed physicians at other practices, and their experiences run the gamut. One doctor at a large multispecialty group said his salary hadn’t been reduced at all, but a cardiologist was just told he will be laid off in 60 days.
Asking for big sacrifices
As the pandemic has intensified, employed physicians have started to see massive changes in their payment arrangements. They have had to take large pay cuts, give up bonuses, go on leave, and have even been terminated.
“In my 11 years of work on physician contracts, I have never seen changes as drastic as these,” said Kyle Claussen, a physician contract attorney and CEO of Resolve, a company that advises physicians on their careers. The company is based in Columbia, Mo.
He has heard from more than 100 doctors about these proposed changes in their contracts and related matters. Even graduating residents, he said, are being told that the start dates for their new jobs will be delayed.
In many cases, these actions violate the employed physicians’ contracts, said Ericka Adler, a physician contract attorney at Roetzel & Andress in Chicago.
“Some employers are acting out of desperation and are not making legally sound decisions,” Ms. Adler said. “It’s especially upsetting when they do not try to even talk to or work with the doctor first.”
Employers making unfounded unilateral changes
Ms. Adler said some employers are simply issuing a letter to all doctors. “It goes something like, ‘Just to let you know, we are cutting compensation effective immediately,’ and this may apply across the board to all doctors,” she said.
“But the problem with letters is that this is a contractual matter,” she said. “The employer needs to renegotiate each doctor’s contract.”
Employers might insist that the unilateral changes are based on terms in the contract, but this is usually unfounded, both lawyers said. A “force majeure” clause in contracts would allow the employer to set aside terms under certain specified emergencies, and the pandemic might be one of them. But Mr. Claussen said force majeure clauses are rare in physician contracts, and Ms. Adler said she has never seen one.
Lacking a force majeure clause, employers may try to turn to a common law doctrine that allows employers to set aside a contract when it is impossible to perform its terms, owing, for example, to “an unexpected intervening event.” But this tactic is also questionable, says Ms. Adler, who also represents the employer’s side of the contract. “This is a very high standard and unlikely to be satisfied,” she said.
Employers are desperate to amend contracts
Lacking a cause to take unilateral action, many employers are desperately trying to amend their physician contracts – the subject of the plaintive emails that employed physicians started receiving in mid-March.
“Doctors are trying to decide how they will react to these documents,” Mr. Claussen said. “If they don’t sign, they run the risk of being terminated.” He is expecting termination letters for some of these doctors to start coming in 2-3 weeks.
In response to these amendments, “doctors want to reach out to their employers and see if something can be negotiated,” he said. “Some employers have been amenable, but others have so far not been.”
Ms. Adler said the amendments typically offer open-ended arrangements favoring the employer. “The document might call for a temporary pay cut until the employer thinks they can restore the old salary, but it is up to the employer to decide when that would be,” she said.
Also, when the employer owes the physician for services already performed, the amendments don’t promise to pay them the full amount owed, she said.
Ms. Adler advises doctors to ask for a provision that restoration of their original salary will occur at a definite point in time, such as 30 days after the organization is back at previous volume. And if the doctor is owed money, the doctor should ask for full payment – and to sweeten that offer, allow the employer to pay the doctor back over a period, she says.
Just in the past month, employers have been pushing for several specific changes in doctors’ employment status. Here are some changes that Mr. Claussen and Ms. Adler have been seeing.
Withholding quarterly bonuses
In March, just before quarterly bonus payments were due, employed physicians started getting notices that they would not get the bonus, Mr. Claussen said. This covered work already done, and it amounted to a lot of money because practices were busy then.
“Not paying bonuses is a very big deal because they can make up to 50% of a physician’s total compensation,” Mr. Claussen said. He added that unilaterally withholding those funds, without a change in the contract, is legally questionable.
In addition to these changes on past bonuses, he said employers are now trying to temporarily end bonuses going forward through the contract amendments. “It’s not a good idea to sign this,” he said.
Doctors paid on pure production are left in the lurch
As volume falls, some hospitals and practices are shutting down doctors’ offices for all but emergencies, leaving their employed doctors with practically nothing to do. Doctors paid purely on their productivity are devastated by this change because their income virtually goes to zero, Mr. Claussen said.
He said office shutdowns are particularly common for specialists because hospitals have been stopping elective procedures during the pandemic, but they can also happen in primary care, which has seen steep declines in patient volume, too.
Having doctors on pure production means that employers can keep doctors hired without having to pay them, Mr. Claussen said. He has seen some employers try to shift more doctors into pure production through the amended contracts.
But Ms. Adler said having doctors on pure production is actually disadvantageous for employers in the current climate. The employer may end up being owed money because of advance payments they have already made to these doctors, she said.
In any case, both lawyers agreed that doctors on a pure production model are in an untenable situation right now. Ms. Adler said they are not earning money but are still technically at work, so they cannot collect unemployment compensation, which would give them some income.
Forcing doctors to use paid time off
To provide some pay for doctors who have no volume, many employers are forcing these doctors to use up their PTO days, which typically amount to about 4 weeks, Mr. Claussen said. “These doctors have no choice in the matter,” he said.
Furthermore, while on PTO, they are being required to take call. Employers are still obligated to cover call, and there may not be enough doctors still working to fill the call schedule. But making doctors do this work on their time off may be a violation of the contract, Mr. Claussen said.
Terminating physicians
Doctors who have little to do are often put on furlough. This means they don’t get paid but they keep their benefits, Ms. Adler said. The next step, she said, is to lay them off, with the stated intention of rehiring them.
Once laid off, she said, they can get unemployment payments. “Unemployment payments may not be anywhere near what they were earning before, but they are better than not earning anything,” Ms. Adler said.
In some cases, employers are just terminating them and are offering no prospect of rehiring them, she said. Ms. Adler said terminations can be a big problem for doctors. Physicians might have to repay a signing bonus or they might lose their malpractice coverage, forcing them to buy a tail. They could also be subject to a noncompete clause, which would not allow them to practice in the area, she said.
Terminating without cause typically requires 60-90 days’ notice, which both sides might use to negotiate some changes in the contract. But Ms. Adler said some employers are firing doctors with cause, and are using legally questionable reasons to do so.
“In most cases, these employers are grasping at straws,” she said. As a result, she expects many fired doctors will file wrongful termination lawsuits. She thinks employers are better advised to negotiate with the physicians.
Delaying start dates for new physicians
Typically, graduating residents and fellows signed with their new employers months ago and are ready to start working on July 1. But some employers are pushing back the start date for several months, Mr. Claussen said.
Mr. Claussen has been helping several clients in this situation. He said these delays are often a clear violation of the employment contract. Most contracts require an amendment to change the start date, he said.
Mr. Claussen said some employers have agreed to a new start date in an amended contract, giving the new physicians a solid date to work with. Not having work can be a real problem for graduating residents, who typically have to start paying off loans.
Now physicians won’t become a new partner
Mr. Claussen said physicians who are up for becoming partner are now being told that the deal is off. With less money coming in, existing partners are not willing to share it with a new partner, and there is no work for a new partner.
“The promise to make them partner is usually a verbal promise, so it is much less likely to be a breach of contract,” he said. “It is frustrating for physicians who were expecting to become partner.”
What can physicians do?
When employers present changes to them, physicians often feel their hands are tied, Ms. Adler said. In these dangerous times, they are expected to make sacrifices to keep the organization from going out of business.
Even if they wanted to file suits against their employer, “they can’t go to court right now because the courts are closed,” Ms. Adler said. “Employers are banking on doctors not doing anything.”
In most cases, however, doctors don’t have to act right away, she said. “Just because you have not reacted to the new situation does not mean you accepted it,” she said. “You can wait months, even years to file a lawsuit, depending on the state and the cause of action.”
Ms. Adler recommended that doctors make it clear that they don’t agree with the changes. An attorney experienced in physician contracts can review the changes being made and the amended contracts being offered.
Thanks to recent federal changes, employers have to have some ways to continue paying physicians, Ms. Adler said. Medical practices with fewer than 500 employees can get loans from the federal government that would not have to be repaid if they met certain stipulations, such as hiring back all the employees they terminate, she said.
Mr. Claussen said physicians should resist the obvious dangers, such as a shift to a pure production salary, denying bonus payments for work already done, and forcing physicians you use up PTO days.
He also suggested persuading employers to postpone rather than eliminate payments. “Some employers have agreed to postpone payments until a date later in 2020 rather than eliminate them,” he said. “The aim is that the organization will be back on its feet at that time.”
Mr. Claussen said he is trying to limit the contract amendments to 1 or 2 months. Because the situation caused by the pandemic is so fluid, “this allows for flexibility,” he said. “We can revisit the situation and come up with different changes.”
Ms. Adler doubts employers would accept short-term changes with a definite end date because such changes would not be in the employer’s interest. But Mr. Claussen said one employer has agreed to reevaluate its contracts in June.
Both lawyers agreed that many employers are trying to work with their physicians. “In 90% of the cases I have seen, both sides cooperate,” Ms. Adler said. “Because of the situation, people are being much more conciliatory than they would have been.”
A version of this article originally appeared on Medscape.com.
Employed physicians have had to take large pay cuts, give up bonuses, go on leave, or have even been terminated. In many cases, these actions violate their contract. How can they fight them?
Michael D., MD, a colorectal surgeon employed in a large surgical practice in Georgia, is still trying to make sense of a late-night directive from the practice, received in late March.
The practice had just started seeing a steep decline in appointments because of the COVID-19 pandemic. In a hastily arranged group phone call at 11:00 p.m., the CEO told the group what would have to be done.
They would be taking a 50% reduction in salaries, their bonuses for work already done were being withheld, and they would have to use their paid time off (PTO) in order to get their full March salary.
“It’s been over 2 weeks now, and still we’ve seen nothing formalized in writing,” said Dr. D., who asked that his name not be used because he was told that, under no circumstances, should anyone talk to the media.
“They have not told us anything more since then,” he said. “There’s just been a lot of hearsay and speculation.”
Dr. D. has been in touch with employed physicians at other practices, and their experiences run the gamut. One doctor at a large multispecialty group said his salary hadn’t been reduced at all, but a cardiologist was just told he will be laid off in 60 days.
Asking for big sacrifices
As the pandemic has intensified, employed physicians have started to see massive changes in their payment arrangements. They have had to take large pay cuts, give up bonuses, go on leave, and have even been terminated.
“In my 11 years of work on physician contracts, I have never seen changes as drastic as these,” said Kyle Claussen, a physician contract attorney and CEO of Resolve, a company that advises physicians on their careers. The company is based in Columbia, Mo.
He has heard from more than 100 doctors about these proposed changes in their contracts and related matters. Even graduating residents, he said, are being told that the start dates for their new jobs will be delayed.
In many cases, these actions violate the employed physicians’ contracts, said Ericka Adler, a physician contract attorney at Roetzel & Andress in Chicago.
“Some employers are acting out of desperation and are not making legally sound decisions,” Ms. Adler said. “It’s especially upsetting when they do not try to even talk to or work with the doctor first.”
Employers making unfounded unilateral changes
Ms. Adler said some employers are simply issuing a letter to all doctors. “It goes something like, ‘Just to let you know, we are cutting compensation effective immediately,’ and this may apply across the board to all doctors,” she said.
“But the problem with letters is that this is a contractual matter,” she said. “The employer needs to renegotiate each doctor’s contract.”
Employers might insist that the unilateral changes are based on terms in the contract, but this is usually unfounded, both lawyers said. A “force majeure” clause in contracts would allow the employer to set aside terms under certain specified emergencies, and the pandemic might be one of them. But Mr. Claussen said force majeure clauses are rare in physician contracts, and Ms. Adler said she has never seen one.
Lacking a force majeure clause, employers may try to turn to a common law doctrine that allows employers to set aside a contract when it is impossible to perform its terms, owing, for example, to “an unexpected intervening event.” But this tactic is also questionable, says Ms. Adler, who also represents the employer’s side of the contract. “This is a very high standard and unlikely to be satisfied,” she said.
Employers are desperate to amend contracts
Lacking a cause to take unilateral action, many employers are desperately trying to amend their physician contracts – the subject of the plaintive emails that employed physicians started receiving in mid-March.
“Doctors are trying to decide how they will react to these documents,” Mr. Claussen said. “If they don’t sign, they run the risk of being terminated.” He is expecting termination letters for some of these doctors to start coming in 2-3 weeks.
In response to these amendments, “doctors want to reach out to their employers and see if something can be negotiated,” he said. “Some employers have been amenable, but others have so far not been.”
Ms. Adler said the amendments typically offer open-ended arrangements favoring the employer. “The document might call for a temporary pay cut until the employer thinks they can restore the old salary, but it is up to the employer to decide when that would be,” she said.
Also, when the employer owes the physician for services already performed, the amendments don’t promise to pay them the full amount owed, she said.
Ms. Adler advises doctors to ask for a provision that restoration of their original salary will occur at a definite point in time, such as 30 days after the organization is back at previous volume. And if the doctor is owed money, the doctor should ask for full payment – and to sweeten that offer, allow the employer to pay the doctor back over a period, she says.
Just in the past month, employers have been pushing for several specific changes in doctors’ employment status. Here are some changes that Mr. Claussen and Ms. Adler have been seeing.
Withholding quarterly bonuses
In March, just before quarterly bonus payments were due, employed physicians started getting notices that they would not get the bonus, Mr. Claussen said. This covered work already done, and it amounted to a lot of money because practices were busy then.
“Not paying bonuses is a very big deal because they can make up to 50% of a physician’s total compensation,” Mr. Claussen said. He added that unilaterally withholding those funds, without a change in the contract, is legally questionable.
In addition to these changes on past bonuses, he said employers are now trying to temporarily end bonuses going forward through the contract amendments. “It’s not a good idea to sign this,” he said.
Doctors paid on pure production are left in the lurch
As volume falls, some hospitals and practices are shutting down doctors’ offices for all but emergencies, leaving their employed doctors with practically nothing to do. Doctors paid purely on their productivity are devastated by this change because their income virtually goes to zero, Mr. Claussen said.
He said office shutdowns are particularly common for specialists because hospitals have been stopping elective procedures during the pandemic, but they can also happen in primary care, which has seen steep declines in patient volume, too.
Having doctors on pure production means that employers can keep doctors hired without having to pay them, Mr. Claussen said. He has seen some employers try to shift more doctors into pure production through the amended contracts.
But Ms. Adler said having doctors on pure production is actually disadvantageous for employers in the current climate. The employer may end up being owed money because of advance payments they have already made to these doctors, she said.
In any case, both lawyers agreed that doctors on a pure production model are in an untenable situation right now. Ms. Adler said they are not earning money but are still technically at work, so they cannot collect unemployment compensation, which would give them some income.
Forcing doctors to use paid time off
To provide some pay for doctors who have no volume, many employers are forcing these doctors to use up their PTO days, which typically amount to about 4 weeks, Mr. Claussen said. “These doctors have no choice in the matter,” he said.
Furthermore, while on PTO, they are being required to take call. Employers are still obligated to cover call, and there may not be enough doctors still working to fill the call schedule. But making doctors do this work on their time off may be a violation of the contract, Mr. Claussen said.
Terminating physicians
Doctors who have little to do are often put on furlough. This means they don’t get paid but they keep their benefits, Ms. Adler said. The next step, she said, is to lay them off, with the stated intention of rehiring them.
Once laid off, she said, they can get unemployment payments. “Unemployment payments may not be anywhere near what they were earning before, but they are better than not earning anything,” Ms. Adler said.
In some cases, employers are just terminating them and are offering no prospect of rehiring them, she said. Ms. Adler said terminations can be a big problem for doctors. Physicians might have to repay a signing bonus or they might lose their malpractice coverage, forcing them to buy a tail. They could also be subject to a noncompete clause, which would not allow them to practice in the area, she said.
Terminating without cause typically requires 60-90 days’ notice, which both sides might use to negotiate some changes in the contract. But Ms. Adler said some employers are firing doctors with cause, and are using legally questionable reasons to do so.
“In most cases, these employers are grasping at straws,” she said. As a result, she expects many fired doctors will file wrongful termination lawsuits. She thinks employers are better advised to negotiate with the physicians.
Delaying start dates for new physicians
Typically, graduating residents and fellows signed with their new employers months ago and are ready to start working on July 1. But some employers are pushing back the start date for several months, Mr. Claussen said.
Mr. Claussen has been helping several clients in this situation. He said these delays are often a clear violation of the employment contract. Most contracts require an amendment to change the start date, he said.
Mr. Claussen said some employers have agreed to a new start date in an amended contract, giving the new physicians a solid date to work with. Not having work can be a real problem for graduating residents, who typically have to start paying off loans.
Now physicians won’t become a new partner
Mr. Claussen said physicians who are up for becoming partner are now being told that the deal is off. With less money coming in, existing partners are not willing to share it with a new partner, and there is no work for a new partner.
“The promise to make them partner is usually a verbal promise, so it is much less likely to be a breach of contract,” he said. “It is frustrating for physicians who were expecting to become partner.”
What can physicians do?
When employers present changes to them, physicians often feel their hands are tied, Ms. Adler said. In these dangerous times, they are expected to make sacrifices to keep the organization from going out of business.
Even if they wanted to file suits against their employer, “they can’t go to court right now because the courts are closed,” Ms. Adler said. “Employers are banking on doctors not doing anything.”
In most cases, however, doctors don’t have to act right away, she said. “Just because you have not reacted to the new situation does not mean you accepted it,” she said. “You can wait months, even years to file a lawsuit, depending on the state and the cause of action.”
Ms. Adler recommended that doctors make it clear that they don’t agree with the changes. An attorney experienced in physician contracts can review the changes being made and the amended contracts being offered.
Thanks to recent federal changes, employers have to have some ways to continue paying physicians, Ms. Adler said. Medical practices with fewer than 500 employees can get loans from the federal government that would not have to be repaid if they met certain stipulations, such as hiring back all the employees they terminate, she said.
Mr. Claussen said physicians should resist the obvious dangers, such as a shift to a pure production salary, denying bonus payments for work already done, and forcing physicians you use up PTO days.
He also suggested persuading employers to postpone rather than eliminate payments. “Some employers have agreed to postpone payments until a date later in 2020 rather than eliminate them,” he said. “The aim is that the organization will be back on its feet at that time.”
Mr. Claussen said he is trying to limit the contract amendments to 1 or 2 months. Because the situation caused by the pandemic is so fluid, “this allows for flexibility,” he said. “We can revisit the situation and come up with different changes.”
Ms. Adler doubts employers would accept short-term changes with a definite end date because such changes would not be in the employer’s interest. But Mr. Claussen said one employer has agreed to reevaluate its contracts in June.
Both lawyers agreed that many employers are trying to work with their physicians. “In 90% of the cases I have seen, both sides cooperate,” Ms. Adler said. “Because of the situation, people are being much more conciliatory than they would have been.”
A version of this article originally appeared on Medscape.com.
Close your practice temporarily ... or longer? Your decision during COVID-19
On March 19, 2020, Gene Dorio, MD, a geriatrician at a two-physician practice in Santa Clarita, Calif., called his staff together to decide whether to stay open in the face of the COVID-19 pandemic.
“We have seven people, and I did not want to put any of them at risk,” he said. “We don’t want to put patients at risk, either.” The practice had been operating successfully for many years.
The practice’s finances were being threatened by an abrupt and very significant decline in patient visits. “People have been canceling all the time,” he said. “They’re canceling out of fear. I saw 5 patients today, and I usually see 10-14 patients a day.”
After much discussion, “we decided to stay open,” he said. “That’s the most important thing we can do for our patients and this community.”
The staff will meet again in a few weeks to reassess their future. “This is a fluid situation,” Dr. Dorio said. If things do not improve financially, he does not rule out the possibility of having to close.
At medical practices across the country, the COVID-19 pandemic is threatening not only the lives of staff and patients but also the economic well-being of the practices themselves, and many are contemplating closing.
Many patients are not showing up for appointments. In addition, practices such as Dr. Dorio’s are advising older patients, who are at higher risk for mortality, not to come in, and they are canceling nonurgent visits. “Financially speaking, we are shooting ourselves in the foot,” Dr. Dorio said.
In addition, many hospitals are canceling elective procedures, which are an important source of income for a wide array of specialists, including gastroenterologists, orthopedic surgeons, and cardiologists. The thinking is that elective surgeries would take away important resources from COVID-19 patients and that elective-surgery patients would be put at risk of getting the virus.
The financial pain for practices came abruptly, says Steve Messinger, president of ECG Management Consultants in Washington, D.C. “The first half of March was somewhat normal for practices. In the second half of March, things escalated dramatically.”
In the past few weeks, “there has been a significant drop-off in the number of claims at health insurers,” Mr. Messinger said. “This loss of volume is reminiscent of what we saw during the Great Recession of 2008-2009.”
Hoping to stay open: Here’s what to try first
“Most doctors are hoping that this will be a temporary slowdown of their practices,” said A. Michael La Penna, a practice management advisor in Grand Rapids, Mich. “It’s human nature to assume that relative normalcy will return fairly soon, so just hang in there.”
Some physicians who are putting off closing may be hoping for some kind of financial rescue. On March 19, the American Medical Association and several other major physician groups asked Congressional leaders to take several actions, including providing “dedicated financial support to all physicians and their practices who are experiencing adverse economic impact on their practices from suspending elective visits and procedures.”
Practices that have decided to stay open are radically changing their operations.
Phil Boucher, MD, a pediatrician in Lincoln, Neb., is trying to keep his office open by strategically reorganizing the way he schedules patient visits and by seeing patients via telemedicine.
Practices have also been separating well patients from sick ones. Dr. Boucher has started conducting well visits, such as seeing babies who are brought in for vaccination, in the morning and sick visits in the afternoon.
Dr. Boucher also says he has postponed physical examinations for the next school year until the summer, so that children are not put at risk for exposure at the practice. “Usually we like to space out the physicals so we won’t get overwhelmed in the summer, but we have no choice.”
“The concern is that you don’t want a lot of patients in your office at any one time,” said Gregory Mertz, a physician practice manager in Virginia Beach.
A group of urologists in Fredericksburg, Va., who are Mr. Mertz’s clients, have limited their practice to urgent visits, and patients are screened before coming in for an appointment. “When patients call, someone talks to the patient over the phone and determine whether they should come in,” said Mr. Mertz.
Telemedicine can help doctors keep seeing patients
Many practices have started using telemedicine as a way to distance staff from patients and avoid transmission of the virus. Medicare payment restrictions have been temporarily waived so that telemedicine can be provided throughout the country and can originate in patients’ homes.
Medicare is also temporarily allowing telemedicine visits via patients’ smartphones if they have a video connection such as Skype or FaceTime, and they must ensure patient privacy. In addition, Medicare has allowed practices to waive collecting copays for telemedicine. Reportedly, some private insurers have followed suit.
Dr. Boucher just started using telemedicine. “A couple of weeks ago I would have told you I could only use telemedicine on 5% of my patients, but now I think it’s more like 30%-40%,” he said. “It works for patients on medications, children with rashes, and parents with some sick children. You can eyeball the patient and say, ‘Let’s wait and see how things go.’ ”
But Dr. Dorio finds it less useful. “It would be nice if all the patients knew how to use FaceTime or Skype, but many seniors do not,” he said.
The sad decision to cut staff
Now that practices are seeing fewer patients, they are forced to consider reducing staff. “Staff is largest expense other than real estate, so practices have to closely manage their staffing,” Mr. Mertz said. “On a weekly or even daily basis, the practice has to match staffing to patient demand.”
Some staff may seek time off to take care of children who are now released from school. Others may be quarantined if they are suspected of having been infected by the virus. And some staff may be repurposed for other work, such as phone triaging or wiping down surfaces.
“The practice may decide: ‘I don’t need you this month,’ ” Mr. Mertz said. “Then the staff member can get unemployment as long are they have exhausted the paid leave they had coming to them.”
Many doctors want to keep all their staff on board. “In that case, the practice could impose shorter work weeks for existing staff,” said Elizabeth Woodcock, a practice management consultant in Atlanta. “Many people might have to work on a temporary basis.”
Trying to make the closure temporary
Most practices are still receiving income from past billing, since the reduction in volume started recently, so they have a few weeks or longer to decide what to do next, Mr. La Penna says. He suggests that they use the time to plan for the future.
“You need to have a plan for what you will do if this situation continues. When the risk is unknown, as is the case with this pandemic, people tend to plan for the best and fear the worst,” he said. “But it makes more sense to plan for the worst and hope for the best.”
Mr. La Penna advises practices to thoroughly analyze their operations. That analysis should include defining ongoing expenses and deciding how to handle them, developing a time-off policy for employees, and holding off on new hires and purchases.
He advises being transparent about your plans. “Be very public and forthcoming about the measures the practice is taking to avoid a complete shutdown, but keep your options open. Communicate with referral sources at every stage so that they stay in the loop.”
Procedure-oriented practices should follow the rules on elective procedures, Mr. La Penna says. “Conform to your association’s national guidelines on performing elective surgery or procedures,” he said. “If you do not follow those guidelines, you may be liable if your patient develops the virus.”
The AMA has compiled a list of actions to help keep your practice open. Here are some highlights:
- Determine the minimal cash flow you’d need. Develop a contingency plan based on estimates of minimum cash flow to stay afloat.
- Track your losses and expenses. You’ll need a record to make a claim through your business insurance policy. The policy may or may not cover COVID-19-related liabilities. Contact your broker to find out.
- Keep track of impending defaults. Review existing loan documents and financial covenants to determine whether a slowdown of business or collections could trigger a default.
- Negotiate with lenders. Contact vendors, landlords, and creditors to discuss reasonable accommodations for cash-flow disruptions. Consider asking them for forbearance, forgiveness, or a standstill, and agree to establish a process for keeping them informed over time.
- Get a low-interest loan. The Small Business Administration has begun to administer low-interest loans funded by numerous states, counties, and municipalities.
- Keep up with policy changes. State, local, and federal laws and regulations that affect practices are changing rapidly. Assign a staff member to follow these changes in the news and on government websites.
Closing your office may be the only option
Still, many practices may have to close – hopefully, most closures will be temporary, but some could end up being permanent.
“If you want to close your practice temporarily, you can get a short-term loan, try to defer payments, and wait for circumstances to improve,” Mr. La Penna said. “You’ll need to spend a few weeks winding down your practice, and you’ll want to make sure employees and patients don’t drift off.”
However, many practices may have no choice but to go permanently out of business, Mr. La Penna says.
The problem for many practices is that they typically distribute income among partners and have not retained earnings to cushion them from a financial disaster, Mr. Messinger says. “Some higher-performing practices have a cash surplus of perhaps 2 months, if that. They could take out loans and use lines of credit, but some of them already have outstanding loans for equipment or accounts receivables.”
Older physicians who were planning retirement may decide to retire early. “Anecdotally, there are a number of doctors who are ready to call it quits,” said Louis Weinstein, MD, chair of the AMA Senior Physicians Section. “This virus is the last straw. Their thought is: ‘Get out before you get sick.’ One colleague was going to close in a year from now but decided to speed it up.”
To find the specific steps needed to shut down a practice, check with physician organizations, practice managers, and health care attorneys. For example, the American Association of Family Physicians provides a Closing Your Practice Checklist, which specifies what you should do 60-90 days and 30-60 days before closing.
Employed physicians’ concerns
While private practices wrestle with staying open, there are potentially some grim or unhappy prospects for employed physicians too.
Many hospitals are in difficult economic straits and may not be able to afford paying doctors who aren’t working. But some experts are more optimistic.
“In many cases, I think the hospital will pay their salary even though their volume is down,” Mr. Mertz said. And Mr. Messinger said: “Hospitals may put employed physicians with low volume on an ‘RVU [relative value unit] holiday’ for a while. They don’t want to have a destabilized workforce.”
“When employed surgeons can’t do elective procedures, suddenly they can’t meet their productivity targets to get bonuses,” Mr. La Penna said. Productivity measures are typically based on RVUs. Mr. La Penna says he is working with a 100-physician practice where RVU payments that had been projected for the remainder of the year are expected to fall by half.
Some employed physicians have a guaranteed base pay that is not affected by RVUs, but in many cases, pay is based purely on productivity, says Andrew Hajde, assistant director of association content at the Medical Group Management Association. “If their volume goes down, they are in danger of not getting paid,” he said.
A version of this article originally appeared on Medscape.com.
On March 19, 2020, Gene Dorio, MD, a geriatrician at a two-physician practice in Santa Clarita, Calif., called his staff together to decide whether to stay open in the face of the COVID-19 pandemic.
“We have seven people, and I did not want to put any of them at risk,” he said. “We don’t want to put patients at risk, either.” The practice had been operating successfully for many years.
The practice’s finances were being threatened by an abrupt and very significant decline in patient visits. “People have been canceling all the time,” he said. “They’re canceling out of fear. I saw 5 patients today, and I usually see 10-14 patients a day.”
After much discussion, “we decided to stay open,” he said. “That’s the most important thing we can do for our patients and this community.”
The staff will meet again in a few weeks to reassess their future. “This is a fluid situation,” Dr. Dorio said. If things do not improve financially, he does not rule out the possibility of having to close.
At medical practices across the country, the COVID-19 pandemic is threatening not only the lives of staff and patients but also the economic well-being of the practices themselves, and many are contemplating closing.
Many patients are not showing up for appointments. In addition, practices such as Dr. Dorio’s are advising older patients, who are at higher risk for mortality, not to come in, and they are canceling nonurgent visits. “Financially speaking, we are shooting ourselves in the foot,” Dr. Dorio said.
In addition, many hospitals are canceling elective procedures, which are an important source of income for a wide array of specialists, including gastroenterologists, orthopedic surgeons, and cardiologists. The thinking is that elective surgeries would take away important resources from COVID-19 patients and that elective-surgery patients would be put at risk of getting the virus.
The financial pain for practices came abruptly, says Steve Messinger, president of ECG Management Consultants in Washington, D.C. “The first half of March was somewhat normal for practices. In the second half of March, things escalated dramatically.”
In the past few weeks, “there has been a significant drop-off in the number of claims at health insurers,” Mr. Messinger said. “This loss of volume is reminiscent of what we saw during the Great Recession of 2008-2009.”
Hoping to stay open: Here’s what to try first
“Most doctors are hoping that this will be a temporary slowdown of their practices,” said A. Michael La Penna, a practice management advisor in Grand Rapids, Mich. “It’s human nature to assume that relative normalcy will return fairly soon, so just hang in there.”
Some physicians who are putting off closing may be hoping for some kind of financial rescue. On March 19, the American Medical Association and several other major physician groups asked Congressional leaders to take several actions, including providing “dedicated financial support to all physicians and their practices who are experiencing adverse economic impact on their practices from suspending elective visits and procedures.”
Practices that have decided to stay open are radically changing their operations.
Phil Boucher, MD, a pediatrician in Lincoln, Neb., is trying to keep his office open by strategically reorganizing the way he schedules patient visits and by seeing patients via telemedicine.
Practices have also been separating well patients from sick ones. Dr. Boucher has started conducting well visits, such as seeing babies who are brought in for vaccination, in the morning and sick visits in the afternoon.
Dr. Boucher also says he has postponed physical examinations for the next school year until the summer, so that children are not put at risk for exposure at the practice. “Usually we like to space out the physicals so we won’t get overwhelmed in the summer, but we have no choice.”
“The concern is that you don’t want a lot of patients in your office at any one time,” said Gregory Mertz, a physician practice manager in Virginia Beach.
A group of urologists in Fredericksburg, Va., who are Mr. Mertz’s clients, have limited their practice to urgent visits, and patients are screened before coming in for an appointment. “When patients call, someone talks to the patient over the phone and determine whether they should come in,” said Mr. Mertz.
Telemedicine can help doctors keep seeing patients
Many practices have started using telemedicine as a way to distance staff from patients and avoid transmission of the virus. Medicare payment restrictions have been temporarily waived so that telemedicine can be provided throughout the country and can originate in patients’ homes.
Medicare is also temporarily allowing telemedicine visits via patients’ smartphones if they have a video connection such as Skype or FaceTime, and they must ensure patient privacy. In addition, Medicare has allowed practices to waive collecting copays for telemedicine. Reportedly, some private insurers have followed suit.
Dr. Boucher just started using telemedicine. “A couple of weeks ago I would have told you I could only use telemedicine on 5% of my patients, but now I think it’s more like 30%-40%,” he said. “It works for patients on medications, children with rashes, and parents with some sick children. You can eyeball the patient and say, ‘Let’s wait and see how things go.’ ”
But Dr. Dorio finds it less useful. “It would be nice if all the patients knew how to use FaceTime or Skype, but many seniors do not,” he said.
The sad decision to cut staff
Now that practices are seeing fewer patients, they are forced to consider reducing staff. “Staff is largest expense other than real estate, so practices have to closely manage their staffing,” Mr. Mertz said. “On a weekly or even daily basis, the practice has to match staffing to patient demand.”
Some staff may seek time off to take care of children who are now released from school. Others may be quarantined if they are suspected of having been infected by the virus. And some staff may be repurposed for other work, such as phone triaging or wiping down surfaces.
“The practice may decide: ‘I don’t need you this month,’ ” Mr. Mertz said. “Then the staff member can get unemployment as long are they have exhausted the paid leave they had coming to them.”
Many doctors want to keep all their staff on board. “In that case, the practice could impose shorter work weeks for existing staff,” said Elizabeth Woodcock, a practice management consultant in Atlanta. “Many people might have to work on a temporary basis.”
Trying to make the closure temporary
Most practices are still receiving income from past billing, since the reduction in volume started recently, so they have a few weeks or longer to decide what to do next, Mr. La Penna says. He suggests that they use the time to plan for the future.
“You need to have a plan for what you will do if this situation continues. When the risk is unknown, as is the case with this pandemic, people tend to plan for the best and fear the worst,” he said. “But it makes more sense to plan for the worst and hope for the best.”
Mr. La Penna advises practices to thoroughly analyze their operations. That analysis should include defining ongoing expenses and deciding how to handle them, developing a time-off policy for employees, and holding off on new hires and purchases.
He advises being transparent about your plans. “Be very public and forthcoming about the measures the practice is taking to avoid a complete shutdown, but keep your options open. Communicate with referral sources at every stage so that they stay in the loop.”
Procedure-oriented practices should follow the rules on elective procedures, Mr. La Penna says. “Conform to your association’s national guidelines on performing elective surgery or procedures,” he said. “If you do not follow those guidelines, you may be liable if your patient develops the virus.”
The AMA has compiled a list of actions to help keep your practice open. Here are some highlights:
- Determine the minimal cash flow you’d need. Develop a contingency plan based on estimates of minimum cash flow to stay afloat.
- Track your losses and expenses. You’ll need a record to make a claim through your business insurance policy. The policy may or may not cover COVID-19-related liabilities. Contact your broker to find out.
- Keep track of impending defaults. Review existing loan documents and financial covenants to determine whether a slowdown of business or collections could trigger a default.
- Negotiate with lenders. Contact vendors, landlords, and creditors to discuss reasonable accommodations for cash-flow disruptions. Consider asking them for forbearance, forgiveness, or a standstill, and agree to establish a process for keeping them informed over time.
- Get a low-interest loan. The Small Business Administration has begun to administer low-interest loans funded by numerous states, counties, and municipalities.
- Keep up with policy changes. State, local, and federal laws and regulations that affect practices are changing rapidly. Assign a staff member to follow these changes in the news and on government websites.
Closing your office may be the only option
Still, many practices may have to close – hopefully, most closures will be temporary, but some could end up being permanent.
“If you want to close your practice temporarily, you can get a short-term loan, try to defer payments, and wait for circumstances to improve,” Mr. La Penna said. “You’ll need to spend a few weeks winding down your practice, and you’ll want to make sure employees and patients don’t drift off.”
However, many practices may have no choice but to go permanently out of business, Mr. La Penna says.
The problem for many practices is that they typically distribute income among partners and have not retained earnings to cushion them from a financial disaster, Mr. Messinger says. “Some higher-performing practices have a cash surplus of perhaps 2 months, if that. They could take out loans and use lines of credit, but some of them already have outstanding loans for equipment or accounts receivables.”
Older physicians who were planning retirement may decide to retire early. “Anecdotally, there are a number of doctors who are ready to call it quits,” said Louis Weinstein, MD, chair of the AMA Senior Physicians Section. “This virus is the last straw. Their thought is: ‘Get out before you get sick.’ One colleague was going to close in a year from now but decided to speed it up.”
To find the specific steps needed to shut down a practice, check with physician organizations, practice managers, and health care attorneys. For example, the American Association of Family Physicians provides a Closing Your Practice Checklist, which specifies what you should do 60-90 days and 30-60 days before closing.
Employed physicians’ concerns
While private practices wrestle with staying open, there are potentially some grim or unhappy prospects for employed physicians too.
Many hospitals are in difficult economic straits and may not be able to afford paying doctors who aren’t working. But some experts are more optimistic.
“In many cases, I think the hospital will pay their salary even though their volume is down,” Mr. Mertz said. And Mr. Messinger said: “Hospitals may put employed physicians with low volume on an ‘RVU [relative value unit] holiday’ for a while. They don’t want to have a destabilized workforce.”
“When employed surgeons can’t do elective procedures, suddenly they can’t meet their productivity targets to get bonuses,” Mr. La Penna said. Productivity measures are typically based on RVUs. Mr. La Penna says he is working with a 100-physician practice where RVU payments that had been projected for the remainder of the year are expected to fall by half.
Some employed physicians have a guaranteed base pay that is not affected by RVUs, but in many cases, pay is based purely on productivity, says Andrew Hajde, assistant director of association content at the Medical Group Management Association. “If their volume goes down, they are in danger of not getting paid,” he said.
A version of this article originally appeared on Medscape.com.
On March 19, 2020, Gene Dorio, MD, a geriatrician at a two-physician practice in Santa Clarita, Calif., called his staff together to decide whether to stay open in the face of the COVID-19 pandemic.
“We have seven people, and I did not want to put any of them at risk,” he said. “We don’t want to put patients at risk, either.” The practice had been operating successfully for many years.
The practice’s finances were being threatened by an abrupt and very significant decline in patient visits. “People have been canceling all the time,” he said. “They’re canceling out of fear. I saw 5 patients today, and I usually see 10-14 patients a day.”
After much discussion, “we decided to stay open,” he said. “That’s the most important thing we can do for our patients and this community.”
The staff will meet again in a few weeks to reassess their future. “This is a fluid situation,” Dr. Dorio said. If things do not improve financially, he does not rule out the possibility of having to close.
At medical practices across the country, the COVID-19 pandemic is threatening not only the lives of staff and patients but also the economic well-being of the practices themselves, and many are contemplating closing.
Many patients are not showing up for appointments. In addition, practices such as Dr. Dorio’s are advising older patients, who are at higher risk for mortality, not to come in, and they are canceling nonurgent visits. “Financially speaking, we are shooting ourselves in the foot,” Dr. Dorio said.
In addition, many hospitals are canceling elective procedures, which are an important source of income for a wide array of specialists, including gastroenterologists, orthopedic surgeons, and cardiologists. The thinking is that elective surgeries would take away important resources from COVID-19 patients and that elective-surgery patients would be put at risk of getting the virus.
The financial pain for practices came abruptly, says Steve Messinger, president of ECG Management Consultants in Washington, D.C. “The first half of March was somewhat normal for practices. In the second half of March, things escalated dramatically.”
In the past few weeks, “there has been a significant drop-off in the number of claims at health insurers,” Mr. Messinger said. “This loss of volume is reminiscent of what we saw during the Great Recession of 2008-2009.”
Hoping to stay open: Here’s what to try first
“Most doctors are hoping that this will be a temporary slowdown of their practices,” said A. Michael La Penna, a practice management advisor in Grand Rapids, Mich. “It’s human nature to assume that relative normalcy will return fairly soon, so just hang in there.”
Some physicians who are putting off closing may be hoping for some kind of financial rescue. On March 19, the American Medical Association and several other major physician groups asked Congressional leaders to take several actions, including providing “dedicated financial support to all physicians and their practices who are experiencing adverse economic impact on their practices from suspending elective visits and procedures.”
Practices that have decided to stay open are radically changing their operations.
Phil Boucher, MD, a pediatrician in Lincoln, Neb., is trying to keep his office open by strategically reorganizing the way he schedules patient visits and by seeing patients via telemedicine.
Practices have also been separating well patients from sick ones. Dr. Boucher has started conducting well visits, such as seeing babies who are brought in for vaccination, in the morning and sick visits in the afternoon.
Dr. Boucher also says he has postponed physical examinations for the next school year until the summer, so that children are not put at risk for exposure at the practice. “Usually we like to space out the physicals so we won’t get overwhelmed in the summer, but we have no choice.”
“The concern is that you don’t want a lot of patients in your office at any one time,” said Gregory Mertz, a physician practice manager in Virginia Beach.
A group of urologists in Fredericksburg, Va., who are Mr. Mertz’s clients, have limited their practice to urgent visits, and patients are screened before coming in for an appointment. “When patients call, someone talks to the patient over the phone and determine whether they should come in,” said Mr. Mertz.
Telemedicine can help doctors keep seeing patients
Many practices have started using telemedicine as a way to distance staff from patients and avoid transmission of the virus. Medicare payment restrictions have been temporarily waived so that telemedicine can be provided throughout the country and can originate in patients’ homes.
Medicare is also temporarily allowing telemedicine visits via patients’ smartphones if they have a video connection such as Skype or FaceTime, and they must ensure patient privacy. In addition, Medicare has allowed practices to waive collecting copays for telemedicine. Reportedly, some private insurers have followed suit.
Dr. Boucher just started using telemedicine. “A couple of weeks ago I would have told you I could only use telemedicine on 5% of my patients, but now I think it’s more like 30%-40%,” he said. “It works for patients on medications, children with rashes, and parents with some sick children. You can eyeball the patient and say, ‘Let’s wait and see how things go.’ ”
But Dr. Dorio finds it less useful. “It would be nice if all the patients knew how to use FaceTime or Skype, but many seniors do not,” he said.
The sad decision to cut staff
Now that practices are seeing fewer patients, they are forced to consider reducing staff. “Staff is largest expense other than real estate, so practices have to closely manage their staffing,” Mr. Mertz said. “On a weekly or even daily basis, the practice has to match staffing to patient demand.”
Some staff may seek time off to take care of children who are now released from school. Others may be quarantined if they are suspected of having been infected by the virus. And some staff may be repurposed for other work, such as phone triaging or wiping down surfaces.
“The practice may decide: ‘I don’t need you this month,’ ” Mr. Mertz said. “Then the staff member can get unemployment as long are they have exhausted the paid leave they had coming to them.”
Many doctors want to keep all their staff on board. “In that case, the practice could impose shorter work weeks for existing staff,” said Elizabeth Woodcock, a practice management consultant in Atlanta. “Many people might have to work on a temporary basis.”
Trying to make the closure temporary
Most practices are still receiving income from past billing, since the reduction in volume started recently, so they have a few weeks or longer to decide what to do next, Mr. La Penna says. He suggests that they use the time to plan for the future.
“You need to have a plan for what you will do if this situation continues. When the risk is unknown, as is the case with this pandemic, people tend to plan for the best and fear the worst,” he said. “But it makes more sense to plan for the worst and hope for the best.”
Mr. La Penna advises practices to thoroughly analyze their operations. That analysis should include defining ongoing expenses and deciding how to handle them, developing a time-off policy for employees, and holding off on new hires and purchases.
He advises being transparent about your plans. “Be very public and forthcoming about the measures the practice is taking to avoid a complete shutdown, but keep your options open. Communicate with referral sources at every stage so that they stay in the loop.”
Procedure-oriented practices should follow the rules on elective procedures, Mr. La Penna says. “Conform to your association’s national guidelines on performing elective surgery or procedures,” he said. “If you do not follow those guidelines, you may be liable if your patient develops the virus.”
The AMA has compiled a list of actions to help keep your practice open. Here are some highlights:
- Determine the minimal cash flow you’d need. Develop a contingency plan based on estimates of minimum cash flow to stay afloat.
- Track your losses and expenses. You’ll need a record to make a claim through your business insurance policy. The policy may or may not cover COVID-19-related liabilities. Contact your broker to find out.
- Keep track of impending defaults. Review existing loan documents and financial covenants to determine whether a slowdown of business or collections could trigger a default.
- Negotiate with lenders. Contact vendors, landlords, and creditors to discuss reasonable accommodations for cash-flow disruptions. Consider asking them for forbearance, forgiveness, or a standstill, and agree to establish a process for keeping them informed over time.
- Get a low-interest loan. The Small Business Administration has begun to administer low-interest loans funded by numerous states, counties, and municipalities.
- Keep up with policy changes. State, local, and federal laws and regulations that affect practices are changing rapidly. Assign a staff member to follow these changes in the news and on government websites.
Closing your office may be the only option
Still, many practices may have to close – hopefully, most closures will be temporary, but some could end up being permanent.
“If you want to close your practice temporarily, you can get a short-term loan, try to defer payments, and wait for circumstances to improve,” Mr. La Penna said. “You’ll need to spend a few weeks winding down your practice, and you’ll want to make sure employees and patients don’t drift off.”
However, many practices may have no choice but to go permanently out of business, Mr. La Penna says.
The problem for many practices is that they typically distribute income among partners and have not retained earnings to cushion them from a financial disaster, Mr. Messinger says. “Some higher-performing practices have a cash surplus of perhaps 2 months, if that. They could take out loans and use lines of credit, but some of them already have outstanding loans for equipment or accounts receivables.”
Older physicians who were planning retirement may decide to retire early. “Anecdotally, there are a number of doctors who are ready to call it quits,” said Louis Weinstein, MD, chair of the AMA Senior Physicians Section. “This virus is the last straw. Their thought is: ‘Get out before you get sick.’ One colleague was going to close in a year from now but decided to speed it up.”
To find the specific steps needed to shut down a practice, check with physician organizations, practice managers, and health care attorneys. For example, the American Association of Family Physicians provides a Closing Your Practice Checklist, which specifies what you should do 60-90 days and 30-60 days before closing.
Employed physicians’ concerns
While private practices wrestle with staying open, there are potentially some grim or unhappy prospects for employed physicians too.
Many hospitals are in difficult economic straits and may not be able to afford paying doctors who aren’t working. But some experts are more optimistic.
“In many cases, I think the hospital will pay their salary even though their volume is down,” Mr. Mertz said. And Mr. Messinger said: “Hospitals may put employed physicians with low volume on an ‘RVU [relative value unit] holiday’ for a while. They don’t want to have a destabilized workforce.”
“When employed surgeons can’t do elective procedures, suddenly they can’t meet their productivity targets to get bonuses,” Mr. La Penna said. Productivity measures are typically based on RVUs. Mr. La Penna says he is working with a 100-physician practice where RVU payments that had been projected for the remainder of the year are expected to fall by half.
Some employed physicians have a guaranteed base pay that is not affected by RVUs, but in many cases, pay is based purely on productivity, says Andrew Hajde, assistant director of association content at the Medical Group Management Association. “If their volume goes down, they are in danger of not getting paid,” he said.
A version of this article originally appeared on Medscape.com.