Pandemic outlook
Whereas health care helped drive the U.S. economy in 2018-2019, the pace of job growth in health care has decreased since March. As a result of the pandemic, health care spending in the United States declined by 18% in the first quarter of 2020. Physician practice revenue dropped by 55% during the first quarter, and many small and solo practices are still struggling.
In a 2018 Merritt Hawkins survey, 18% of physicians said they had used telehealth to treat patients. Because of the pandemic, that percentage jumped to 48% in April 2020. But telehealth hasn’t made up for the loss of patient revenue from in-office procedures, tests, and other services, and it still isn’t being reimbursed at the same level as in-office visits.
With practices under severe financial strain, the authors explained, “A majority of private practices have curtailed most physician recruiting activity since the virus emerged.”
In some states, many specialty practices have been adversely affected by the suspension of elective procedures, and specialty practices that rely on nonessential procedures are unlikely to recruit additional physicians.
One-third of practices could close
The survival of many private practices is now in question. “Based on the losses physician practices have sustained as a result of COVID-19, some markets could lose up to 35% or more of their most vulnerable group practices while a large percent of others will be acquired,” the authors wrote.
Hospitals and health systems will acquire the bulk of these practices, in many cases at fire-sale prices, Mr. Singleton predicted. This enormous shift from private practice to employment, he added, “will have as much to do with the [physician] income levels we’re going to see as the demand for the specialties themselves.”
Right now, he said, Merritt Hawkins is fielding a huge number of requests from doctors seeking employment, but there aren’t many jobs out there. “We haven’t seen an employer-friendly market like this since the 1970s,” he noted. “Before the pandemic, a physician might have had five to 10 jobs to choose from. Now it’s the opposite: We have one job, and 5 to 10 physicians are applying for it.”
Singleton believes the market will adjust by the second quarter of next year. Even if the pandemic worsens, he said, the system will have made the necessary corrections and adjustments “because we have to start seeing patients again, both in terms of demand and economics. So these doctors will be in demand again and will have work.”
Contingent employment
Although the COVID-related falloff in revenue has hit private practices the hardest, some employed physicians have also found themselves in a bind. According to a Merritt Hawkins/Physicians Foundation survey conducted in April, 21% of physicians said they had been furloughed or had taken a pay cut.
Mr. Singleton views this trend as part of hospitals’ reassessment of how they’re going to deal with labor going forward. To cope with utilization ebbs and flows in response to the virus, hospitals are now considering what the report calls a “contingent labor/flex staffing model.”
Under this type of arrangement, which some hospitals have already adopted, physicians may no longer work full time in a single setting, Mr. Singleton said. They may be asked to conduct telehealth visits on nights and weekends and work 20 hours a week in the clinic, or they may have shifts in multiple hospitals or clinics.
“You can make as much or more on a temporary basis as on a permanent basis,” he said. “But you have to be more flexible. You may have to travel or do a different scope of work, or work in different settings.”
A version of this article originally appeared on Medscape.com.