Category Archives: Financial Viability

Primary care physicians could take $15 billion hit due to COVID-19 in 2020

Posted on by • Posted in 2020 Election Issues, Cash, Cash Reserves, Coronavirus, Crisis, Crisis Management, Economic Crisis, Economic Stimulus, Economy Reopening, Financial Viability, Financially Distressed, Physician, Physician Compensation, Physician Practice Management, Primary Care, Telemedicine • Leave a comment

https://www.healthcaredive.com/news/primary-care-physicians-could-take-15-billion-hit-due-to-covid-19-in-2020/580600/

Dive Brief:

  • The financial impact on primary care practices due to the COVID-19 pandemic has been profound and will likely continue in the months ahead, according to a new study published in Health Affairs.
  • Visits of all types to medical practices declined 58% in March and April compared to the baseline average, and in-person patient encounters declined by 69%, the study found. Although visits are expected to have rebounded by June, volumes are still below pre-COVID-19 levels.
  • The drop in fee-for-service revenue for the 2020 calendar year is nearly $68,000 per physician, contributing to an estimated revenue decline of 12.5%. That’s a steep enough loss to threaten the financial viability of many practices. Losses to primary care practices nationwide could top $15 billion over the year — a number that could grow if the federal government reverts increased telemedicine payment rates.

Dive Insight:

Medical practices across the United States have been hit hard by the COVID-19 outbreak.

The new study by researchers from Harvard Medical School and the American Board of Family Medicine attempts to put a price tag on that hit by running a microsimulation for projected 2020 revenues based on volume data for general practices, general internal medicine practices, general pediatric practices and family medicine practices.

As a result, they concluded that the average revenue loss per practice per physician will be $67,774, even taking into account revenue generated by telemedicine visits, which did not make up for the massive loss of patient volume during the spring.

That loss could be cut to as little as $28,265 per full-time physician if other staff is furloughed and salaries are cut to the 25th percentile of such cuts that took place during the peak of the stay-at-home orders.

Some practices are also projected to have steeper losses. Rural primary care practices are projected to lose $75,274 per physician. Other studies have suggested that pediatric practices have been hit harder than other primary care fields. Some organizations, such as the American Medical Group Association, say revenue won’t rebound fully even next year.

The study also conducted various alternate scenarios for the remainder of 2020, including a second wave of COVID-19 in the fall. The researchers estimated that would cut patient volumes by about half as much as what occurred during the spring. However, the financial hit would deepen even further, reaching $85,666 per physician.

Altogether, the study projects primary care practices will lose $15.1 billion in fee-for-service revenue this year, not even accounting for a second wave of the coronavirus. The study’s authors note that “this loss would balloon substantially if telemedicine payment rates revert back to pre-COVID-19 levels towards the end of the year.”

The study concluded that while primary care physicians as a whole have not been as hard hit as the hospital sector, the services they provide in managing chronic diseases such as diabetes and as the port of entry for many into the healthcare system makes them too valuable to suffer sustained levels of financial damage.

 

 

 

Navigating a Post-Covid Path to the New Normal with Gist Healthcare CEO, Chas Roades

Posted on by • Posted in Affordability, Board, Board Assessment, Board Competency, Board Engagement, Brand Loyalty, Branding, Business to Consumer Model, Capitation, Cash, Cash Reserves, Competition, Consumer Loyalty, Consumer Trust, Consumerism, Coronavirus, Corporate Overhead, Corporate Strategy, Cost Management, Cost Reduction, Crisis, Crisis Management, Cross Subsidy Model, Debt Service, Decision Making, Demographics, Disruption, Disruptive Technology, Economic Crisis, Economic Stimulus, Efficiency, Elective Procedures, Elective Surgery, Fee for Service Reimbursement, Financial Incentives, Financial Viability, Financially Distressed, Focus, Governance, Health Insurance Coverage Adequacy, Health Insurance Industry, Health Policy, Health System, High Deductible Health Plans, High Drug Prices, High Prices, Hospital, Hospital Industry, Job, Job Market, Job Search, Job Security, KPI Dashboards, Labor Spend Management, Leadership, Leadership Alignment, Leadership Trust, Market Consolidation, Market Power, Market Share, Market Trends, Market Uncertainty, Medical Group, Member Health, Mergers & Acquisitions, Net Income, Nonoperating Income, Objectivity, Operating Expense Reduction, Operating Expenses, Operating Income, Operating Margin, Operating Performance, Operating Revenue, Out of Pocket Expenses, Pandemic, Physician, Physician Employment, Physician Independent Network (IPA), Physician Multispecialty Network, Physician Practice Management, Price Transparency, Pricing, Primary Care Delivery Model, Primary Care Loyalty, Private Equity, Profit Model, Quality, Quality of Care, Safety, Strategic Alignment, Strategic Leadership, Strategy, Streamlining Operations, Supply Chain, Surprise Bills, Telemedicine, Trust, Trusted Brand, Truth, Value, Value Creation, Value Proposition, Value-Based Healthcare, Virtual Healthcare, Virtual Reality, Virtual Visit, Workplace Safety • Leave a comment

https://www.lrvhealth.com/podcast/?single_podcast=2203

Covid-19, Regulatory Changes and Election Implications: An Inside ...Chas Roades (@ChasRoades) | Twitter

Healthcare is Hard: A Podcast for Insiders; June 11, 2020

Over the course of nearly 20 years as Chief Research Officer at The Advisory Board Company, Chas Roades became a trusted advisor for CEOs, leadership teams and boards of directors at health systems across the country. When The Advisory Board was acquired by Optum in 2017, Chas left the company with Chief Medical Officer, Lisa Bielamowicz. Together they founded Gist Healthcare, where they play a similar role, but take an even deeper and more focused look at the issues health systems are facing.

As Chas explains, Gist Healthcare has members from Allentown, Pennsylvania to Beverly Hills, California and everywhere in between. Most of the organizations Gist works with are regional health systems in the $2 to $5 billion range, where Chas and his colleagues become adjunct members of the executive team and board. In this role, Chas is typically hopscotching the country for in-person meetings and strategy sessions, but Covid-19 has brought many changes.

“Almost overnight, Chas went from in-depth sessions about long-term five-year strategy, to discussions about how health systems will make it through the next six weeks and after that, adapt to the new normal. He spoke to Keith Figlioli about many of the issues impacting these discussions including:

  • Corporate Governance. The decisions health systems will be forced to make over the next two to five years are staggeringly big, according to Chas. As a result, Gist is spending a lot of time thinking about governance right now and how to help health systems supercharge governance processes to lay a foundation for the making these difficult choices.
  • Health Systems Acting Like Systems. As health systems struggle to maintain revenue and margins, they’ll be forced to streamline operations in a way that finally takes advantage of system value. As providers consolidated in recent years, they successfully met the goal of gaining size and negotiating leverage, but paid much less attention to the harder part – controlling cost and creating value. That’s about to change. It will be a lasting impact of Covid-19, and an opportunity for innovators.
  • The Telehealth Land Grab. Providers have quickly ramped-up telehealth services as a necessity to survive during lockdowns. But as telehealth plays a larger role in the new standard of care, payers will not sit idly by and are preparing to double-down on their own virtual care capabilities. They’re looking to take over the virtual space and own the digital front door in an effort to gain coveted customer loyalty. Chas talks about how it would be foolish for providers to expect that payers will continue reimburse at high rates or at parity for physical visits.
  • The Battleground Over Physicians. This is the other area to watch as payers and providers clash over the hearts and minds of consumers. The years-long trend of physician practices being acquired and rolled-up into larger organizations will significantly accelerate due to Covid-19. The financial pain the pandemic has caused will force some practices out of business and many others looking for an exit. And as health systems deal with their own financial hardships, payers with deep pockets are the more likely suitor.”

 

 

 

 

State-by-state breakdown of 130 rural hospital closures

Posted on by • Posted in 2020 Election Issues, ACA, Bankruptcy, Financial Viability, Financially Distressed, Health Policy, Hospital Bankruptcy, Hospital Closure, Inpatient Care, Medicaid, Medicaid Expansion, Rural Health, Rural Hospital, Safety Net Hospitals, Safety-Net Providers • Leave a comment

https://www.beckershospitalreview.com/finance/state-by-state-breakdown-of-130-rural-hospital-closures.html

Rural Hospital Closures Hit Poor, Minority Communities Hardest ...

Nearly one in five Americans live in rural areas and depend on their local hospital for care. Over the past 10 years, 130 of those hospitals have closed.

Thirty-three states have seen at least one rural hospital shut down since 2010, and the closures are heavily clustered in states that have not expanded Medicaid under the ACA, according to the Cecil G. Sheps Center for Health Services Research.

Twenty-one rural hospitals in Texas have closed since 2010, the most of any state. Tennessee has the second-most closures, with 13 rural hospitals shutting down in the past decade. In third place is Oklahoma with eight closures. 

Listed below are the 130 rural hospitals that have closed since Jan. 1, 2010, as tracked by the Sheps Center. For the purposes of its analysis, the Sheps Center defined a hospital closure as the cessation in the provision of inpatient services.

“We follow the convention of the Office of Inspector General that a closed hospital is ‘a facility that stopped providing general, short-term, acute inpatient care,'” reads a statement on the Sheps Center’s website. “We did not consider a hospital closed if it: merged with, or was sold to, another hospital but the physical plant continued to provide inpatient acute care, converted to critical access status, or both closed and reopened during the same calendar year and at the same physical location.”

As of June 8, all the facilities listed below had stopped providing inpatient care. However, some of them still offered other services, including outpatient care, emergency care, urgent care or primary care.

Alabama
SouthWest Alabama Medical Center (Thomasville)
Randolph Medical Center (Roanoke)
Chilton Medical Center (Clanton)
Florence Memorial Hospital
Elba General Hospital
Georgiana Medical Center

Alaska
Sitka Community Hospital

Arizona
Cochise Regional Hospital (Douglas)
Hualapai Mountain Medical Center (Kingman)
Florence Community Healthcare

Arkansas
De Queen Medical Center

California
Kingsburg Medical Center
Corcoran District Hospital
Adventist Health Feather River (Paradise)
Coalinga Regional Medical Center

Florida
Campbellton-Graceville Hospital
Regional General Hospital (Williston)
Shands Live Oak Regional Medical Center
Shands Starke Regional Medical Center

Georgia
Hart County Hospital (Harwell)
Charlton Memorial Hospital (Folkston)
Calhoun Memorial Hospital (Arlington)
Stewart-Webster Hospital (Richland)
Lower Oconee Community Hospital (Glenwood)
North Georgia Medical Center (Ellijay)

Illinois
St. Mary’s Hospital (Streator)

Indiana
Fayette Regional Health System

Kansas
Central Kansas Medical Center (Great Bend)
Mercy Hospital Independence
Mercy Hospital Fort Scott
Horton Community Hospital
Oswego Community Hospital
Sumner Community Hospital (Wellington)

Kentucky
Nicholas County Hospital (Carlisle)
Parkway Regional Hospital (Fulton)
New Horizons Medical Center (Owenton)
Westlake Regional Hospital (Columbia)

Louisiana
Doctor’s Hospital at Deer Creek (Leesville)

Maine
St. Andrews Hospital (Boothbay Harbor)
Southern Maine Health Care-Sanford Medical Center
Parkview Adventist Medical Center (Brunswick)

Maryland
Edward W. McCready Memorial Hospital (Crisfield)

Massachusetts
North Adams Regional Hospital

Michigan
Cheboygan Memorial Hospital

Minnesota
Lakeside Medical Center
Albany Area Hospital
Albert Lea-Mayo Clinic Health System
Mayo Clinic Health System-Springfield

Mississippi
Patient’s Choice Medical of Humphreys County (Belzoni)
Pioneer Community Hospital of Newton
Merit Health Natchez-Community Campus
Kilmichael Hospital
Quitman County Hospital (Marks)

Missouri
Sac-Osage Hospital (Osceola)
Parkland Health Center-Weber Road (Farmington)
Southeast Health Center of Reynolds County (Ellington)
Southeast Health Center of Ripley County (Doniphan)
Twin Rivers Regional Medical Center (Kennett)
I-70 Community Hospital (Sweet Springs)
Pinnacle Regional Hospital (Boonville)

Nebraska
Tilden Community Hospital

Nevada
Nye Regional Medical Center (Tonopah)

New York
Lake Shore Health Care Center
Moses-Ludington Hospital (Ticonderoga)

North Carolina
Blowing Rock Hospital
Vidant Pungo Hospital (Belhaven)
Novant Health Franklin Medical Center (Louisburg)
Yadkin Valley Community Hospital (Yadkinville)
Our Community Hospital (Scotland Neck)
Sandhills Regional Medical Center (Hamlet)
Davie Medical Center-Mocksville

Ohio
Physicians Choice Hospital-Fremont
Doctors Hospital of Nelsonville

Oklahoma
Muskogee Community Hospital
Epic Medical Center (Eufaula)
Memorial Hospital & Physician Group (Frederick)
Latimer County General Hospital (Wilburton)
Pauls Valley General Hospital
Sayre Community Hospital
Haskell County Community Hospital (Stigler)
Mercy Hospital El Reno

Pennsylvania
Saint Catherine Medical Center Fountain Springs (Ashland)
Mid-Valley Hospital (Peckville)
Ellwood City Medical Center
UPMC Susquehanna Sunbury

South Carolina
Bamberg County Memorial Hospital
Marlboro Park Hospital (Bennettsville)
Southern Palmetto Hospital (Barnwell)
Fairfield Memorial Hospital (Winnsboro)

South Dakota
Holy Infant Hospital (Hoven)

Tennessee
Riverview Regional Medical Center South (Carthage)
Starr Regional Medical Center-Etowah
Haywood Park Community Hospital (Brownsville)
Gibson General Hospital (Trenton)
Humboldt General Hospital
United Regional Medical Center (Manchester)
Parkridge West Hospital (Jasper)
Tennova Healthcare-McNairy Regional (Selmer)
Copper Basin Medical Center (Copperhill)
McKenzie Regional Hospital
Jamestown Regional Medical Center
Takoma Regional Hospital (Greeneville)
Decatur County General Hospital (Parsons)

Texas
Wise Regional Health System-Bridgeport
Shelby Regional Medical Center
Renaissance Hospital Terrell
East Texas Medical Center-Mount Vernon
East Texas Medical Center-Clarksville
East Texas Medical Center-Gilmer
Good Shepherd Medical Center (Linden)
Lake Whitney Medical Center (Whitney)
Hunt Regional Community Hospital of Commerce
Gulf Coast Medical Center (Wharton)
Nix Community General Hospital (Dilley)
Weimar Medical Center
Care Regional Medical Center (Aransas Pass)
East Texas Medical Center-Trinity
Little River Healthcare Cameron Hospital
Little River Healthcare Rockdale Hospital
Stamford Memorial Hospital
Texas General-Van Zandt Regional Medical Center (Grand Saline)
Hamlin Memorial Hospital
Chillicothe Hospital
Central Hospital of Bowie

Virginia
Lee Regional Medical Center (Pennington Gap)
Pioneer Community Hospital of Patrick County (Stuart)
Mountain View Regional Hospital (Norton)

West Virginia
Williamson Memorial Hospital
Fairmont Regional Medical Center

Wisconsin
Franciscan Skemp Medical Center (Arcadia)

 

 

 

 

Medicaid expansion key indicator for rural hospitals’ financial viability

Posted on by • Posted in 2020 Election Issues, ACA, Credit, Credit Quality, Credit Ratings, Creditors, Critical Access Hospitals, Financial Viability, Financially Distressed, Health Policy, Health System, Hospital, Hospital Bailout Funding, Hospital Bankruptcy, Hospital Closure, Medicaid, Medicaid Expansion, Pricing, Rural Health, Rural Hospital, Standby Capacity • Leave a comment

https://www.healthcaredive.com/news/medicaid-expansion-rural-hospitals-health-affairs/579005/

Hospital Closures, Underfunded Health Centers In Ohio Valley ...

Dive Brief:

  • Struggling rural hospitals are faring better financially in states that expanded Medicaid under the Affordable Care Act, according to a new Health Affairs study examining 1,004 rural hospitals’ CMS cost reports submitted from 2011 to 2017.
  • Among rural, nonprofit critical access hospitals in states that expanded Medicaid, the median overall margin increased from 1.8% to 3.7%, while it dropped from 3.5% to 2.8% in states that did not expand the program.
  • Tax-exempt status played another key role in determining rural hospitals’ financial viability. During the study period, the median overall profit margin at nonprofit critical access hospitals rose from 2.5% to 3.2%, while it dropped among for-profit operators from 3.2% to 0.4%.

Dive Insight:

The unprecedented financial distress mega health systems are under amid the ongoing pandemic is all too familiar to rural hospitals.

These systems are often smaller, employing fewer specialists and less medical technology, thus limiting the variety of services they can provide and profit on. They remain the closest point of care for millions of Americans, yet face rising closures.

The good news is that most rural hospitals are nonprofit, the designation that fared best in Health Affairs’ six-year study. More than 80% of the 1,004 private, rural hospitals analyzed in the study were nonprofit, while 17% were for-profit.

But researchers found Medicaid expansion played a key role in rural hospitals’ financial viability during the study period, with closures occurring more often in the South than in other regions.

Thirty-seven states have expanded Medicaid under the ACA, but 14 have not, and a majority of them are concentrated in the southern U.S., according to data from the Kaiser Family Foundation.

One of those states is Oklahoma, which on Monday withdrew its planned July 1 Medicaid expansion, citing a lack of funding.

Another factor researchers found positively associated with overall margins and financial viability was charge markups, or the charged amount for a service relative to the Medicare allowable cost. Hospitals with low-charge markups had median overall margins of 1.8%, while those with high-charge markups had margins at 3.5%.

The same is true for occupancy rates. In 2017, rural hospitals with low occupancy rates had median overall profit margins of 0.1% Those with high occupancy rates had margins of 4.7%.

That presents a unique challenge for rural hospitals. Reimbursements from public and private payers do not compensate for fixed costs associated with providing standby capacity, which is essential in rural communities, where few hospitals serve large geographic areas.

Since 1997, CMS has been granting rural hospitals — particularly those with 25 or fewer acute care inpatient beds and located more than 35 miles from another hospital — critical access status, reimbursing them at cost for treating Medicare patients.

In the Health Affairs study, critical access hospitals accounted for 21% of the rural hospital bed capacity, with the remaining 79% of bed capacity provided by noncritical access hospitals.