COVID-19 has collided with American physicians in many ways, but I have several observations that stick out from a physician’s perspective on the business of medicine.
1. We have personal risks including death due to the pandemic. This higher risk status affects those who live under our roof as well, as we become their greatest risk for them contracting the virus while they shelter in place. With this in mind, while I come in direct contact with patients who have COVID-19, I have chosen to separate myself from my family and I am now living in a separate dwelling from them. As a husband and father, I feel it is my obligation to protect them as much as I can. The truth is that worldwide thousands of healthcare workers have contracted the virus and many physicians have died while taking care of the COVID-19 patients. Make sure your life insurance plan and disability insurance are up to date and in place. If you haven’t started or updated your will and estate plan recently, get it out and take a look at it. If you need help with any of this, I have worked with an experienced team of professionals who can help you with this – Ben Hughes at Lattice Legal and Jeff Umbaugh at KDU. Reach out to them if you need help.
2. Our value to the safety and health of all America has never been more apparent. Physicians are the critical resource, although we all know it is a team game that includes nurses, pharmacists, therapists, and even administrators. The loving support from the general public for physicians and healthcare workers is unparalleled in my career. Prayers, cards, food, social media posts, texts, and phone calls all continue to pour in. As a community-based physician who still does traditional rural medicine (inpatient, outpatient, OB care, and nursing home care) I am keenly aware that my community is looking to me as their rock during this crisis. With the community beneficence in mind, our medical community has collaborated and converted my medical office to an exclusive FURI (fever and upper respiratory illness) clinic that is manned in a rotating fashion by physicians and NPs in the community. I am seeing face-to-face visits (OB, well children who need vaccines, hospital f/u’s, etc..) at another group’s clinic. This displacement for me is projected to be 8 weeks or longer, and it isn’t easy. But trying to separate the well from the ill in our community is critical to the mitigation efforts, and is a small inconvenience for each of us in our physician tribe to do. The altruism of physicians is expected by the community, and our modeling of necessary changes to social and essential services is critical to helping reduce COVID-19’s impact. Professional value to a community can be monetized, and a pandemic provides an opportunity for your unique skills and training to shine. When this pandemic passes, never forget your value at the negotiation table.
3. Your Hospital’s and Government’s assumption is that physicians are machines, and replaceable parts in the crisis, much like a ventilator. For all the doctors who are employees, you are increasingly aware of this during the crisis while you are herded around new plans and strategies developed by people above you. You may be asked for input, but mostly that is a feigned feedback process that ultimately results in a top-down directive. Mostly this is good, as we all do need a coxswain communicating to us as we grow in the same direction. My hospital system has already begun recruiting volunteers who are able and willing to manage vents (but normally don’t do it) in anticipation of the surge that likely will come. I did volunteer because it’s the right thing to do, but I must admit it does create a pang of anxiety due to the higher risk exposure, and due to the 25-year gap since I managed a vent. I will have to admit I was a little amused recently when my hospital system in a 125,000-250,000 people metro area asked for employed physician “volunteers” to man their 4 FURI clinics, and only got 5 volunteers. Our tight-knit rural medical community has no problems manning our singular FURI clinic but we are frankly used to working together eye to eye. In larger metro areas, I think it’s easier for a physician to think someone else will do it. After this pandemic starts to ebb, one might begin to reflect on how being a healthcare employee could negatively affect your well-being. Some have called this a moral injury to physicians, and COVID-19 has only accelerated this injury. The physician burnout crisis of the past few years has already exposed this issue, but this crisis may have added some additional illumination to the challenges of being an employee. If you are looking to make an adjustment after the crisis, due to your sense that you are simply a cog in someone else’s wheel, then consider a transition to an “employment lite” contract that provides you much more robust benefits as a professional.
4. Loss, or reduction of income is likely to happen for a period of time and could have enormous negative impacts on a physician’s personal finances. Unfortunately, too many physicians still live paycheck to paycheck and the fixed monthly expenses associated with loans and large purchases don’t magically go away during an economic downturn. If you are an employed physician, the government CARES Act, which targets the vulnerable lower-income earners, and the corporations (both large and small) will be of little benefit to you. You are going to have to adjust your personal finances, speak to your lender, or take out a short-term loan to bridge the downturn that is likely to last several months.
2 Trillion Dollar CARES Act Graphic
5. Small and large healthcare corporations, much like most of America’s businesses, will take a big hit during this pandemic. The business of medicine is not insulated from global or national calamities that influence the flow of money and resources. I never expected healthcare economics to be disrupted as it has. Virtually every physician, regardless of the source of his/her income will be affected by COVID-19. Because corporate America has become a significant stakeholder in the business of medicine, the downstream ramifications to physicians are inevitable. Let’s take a look at a few areas of impact based on categories of physician income.
Physicians By Income Type
1. The physician employees who are salaried are a little more protected by the very nature of their contract, but don’t be surprised if you are asked to defer part of your salary, or even asked to be willing to get paid less. Worse yet, some employers are simply breaching contracts and unilaterally reducing pay. Healthcare employers are bleeding from many directions, and there will be a downstream to its more highly paid employees, especially if those employees are doing less work than normal. Some CEOs are doing this already. A general surgeon would be a good example of a physician whose livelihood is significantly impacted during this time of forgoing all elective procedures.
2. The physician employees that are paid on a productivity model are also very likely to see their income dip during the next many months as patients shelter in place, and all elective medical care is suspended. You will earn fewer RVU’s no matter how much telemedicine you convert to. Although E/M, RVUs are the same for an office-based 99213 and a 99213 telemedicine visit, reimbursement is less. It won’t take long for your employers to make some sort of RVU credit adjustment for telemedicine and down-shift your monthly RVU count. If it hasn’t happened yet, it is likely coming. Bottom line, your monthly paycheck is going to be less
3. Contracted physicians, especially those who aren’t directly linked to acute care with COVID-19 patients will likely see their hours, shifts, and income reduced. Pathologists, Anesthesiologist, and GI doctors for example are all feeling this pain. Most of these commonly contracted services are either hourly based or have a sort of productivity mechanism incorporated based upon seeing patients and generating income. ER physicians, Hospitalist, Locums, Intensivist, and other critical care hospital specialists are likely to see surges in their workload with extra shifts being added, and longer hours performed. It is notable some are trying negotiated “hazard pay” bonuses into their contracts in order to capitalize on their front-line workload. Lots of variabilities can be found with income expectations for contracted physicians.
4. Incorporated physicians such as PCs often have the most flexibility in a time like this. Their contracts for services can vary based on salary or productivity. So monthly income could change as well. Their overhead and employee structure are typically very lean, so the income change will not only affect their personal finances but affect their co-workers who are not employed by the PC. Some of their PC benefit plans like 401k’s or Cash Balance plans may have to flex a little if income really goes down. But the good news is that they can also borrow or take a distribution from these 401K or Cash Balance Plans without penalty due to the CARES Act. These physicians also have the flexibility to contract their services for a negotiated price to provide added relief and assistance to any surge area of medicine that they practice in. The COVID-19 pandemic could create new opportunities to diversify their business profile both short term and long term. This could balance out any losses from their primary professional services, and additional income from new channels as proverbial “side hustles”. It will be interesting to see if telemedicine emerges as a side hustle coming out of this pandemic. Unlike their employed brethren, doctors organized as PCs have really got the upper hand at times like this due to their business organization.
5. Private Practice physicians/LLP’s/LLC–depending on their specialty, will have to make adjustments as revenue will be reduced in the next few quarters. As small businesses, the CARES Act may provide some relief for you, especially if your overhead expenses are relatively fixed. Much of this comes in the form of business LOANS, not bailouts per se. Furloughing employees and reducing hours can help with this, but it’s tough to do this in a small business when you know your cuts affect real people that you are often connected closely to. In group private practices this can create uncomfortable physician conversations about who is working, who is not, and how it affects the corporate bottom line. Physicians tend to be such individualists that when things are going well, most can tolerate “group thinks”, but when things start to go south, the individualism comes to the surface more. Coming to consensus views on items, especially when it negatively affects their personal income, can be especially difficult in this model. This practice model has been declining over the past many years, and the COVID-19 crisis may hasten the demise of some in this category. If you fear falling in that category, I encourage you to check out the PC-PSA model prior to simply signing up as an employee as you transition. It will afford you many benefits that you are used to in private practice, but still, retain a host of the benefits associated with employment.
Physicians-hang in there, you’ve got this. You are highly valued and needed in our economy, and you will weather this storm. You may have to make some adjustments, but you have a lot of options to help you through these days. You will always have a job, and you will be able to put food on your table. In that context, you are way ahead of millions of Americans, who have lost their jobs. Regardless of the hardships that come your way due to COVID-19, you can adapt, weather the storm.
In my next post, I will take a deeper look at how COVID-19 is affecting the personal finances of physicians.
Dr. Inc.
