This is not business as usual. The COVID-19 pandemic has affected physician practices both clinically and economically.
You may already have made changes in how you care for patients, such as utilizing telemedicine in place of in-person visits.
For a big picture perspective, Catalyst Health Network, a clinically integrated primary care network, has created a financial workbook you can download that calculates the effect a decrease in patient encounters and revenue has on your practice.
You also can make adjustments in operating expenses that can keep your practice’s finances healthy.
According to the Medical Group Management Association (MGMA) benchmark data, staff salaries and building occupancy are the two largest expenses in a physician practice. Staffing alone typically accounts for 25% of total operating expenses, and leases account for another 6% to 10%.
However, these can be difficult sums to change: We want to support our staff, and we need to maintain an office space.
There are other fixed expenses, like insurance payments, that may be deferred but not necessarily adjusted. However, there are some things you can do:
Lease: Contact your landlord to discuss a deferment of monthly payments. If you are in your renewal period, negotiate a deal that includes a lower payment and/or deferment for the first few months of the new lease.
Staffing: There are a few options like layoffs or furloughs, but be sure to consider your future funding needs as your decision could have an impact on loan forgiveness. If you furlough, you still need to pay for benefits. Furloughed staff are eligible to apply for unemployment as well. You also can consider rotating staff if you have patient care or billing needs to fulfill.
Supplies: Stop automatic orders so you can have more control over which medical and office supplies you pay for. Consider joining a group purchasing organization (GPO) for pricing considerations if you are not already a member.
Equipment leasing: Contact your vendors for any assistance they could provide during the current crisis. Your vendors might be able to defer or lower payments for a period of time. Evaluate use of equipment to determine if it is truly necessary to your practice. If not, return it and eliminate a payment.
Subscriptions: Suspend any magazine or other unnecessary subscriptions.
Shredding/Biohazard/Laundry Services: Suspend services you are currently not using.
On the income side, Catalyst Health Network also has created a tool that compares the Small Business Association’s (SBA) lending options: Express Loan, the Paycheck Protection Program, and Economic Injury Disaster Loans. The tool has information on when and where to apply, the qualification requirements, and other pertinent details.
The Texas Medical Association Practice Viability webpage includes more information and resources to help keep your practice afloat, including frequently asked questions (FAQs) on practice viability and human resources issues.
Remember, you can find the latest news, resources, and government guidance on the coronavirus outbreak by visiting TMA’s COVID-19 Resource Center regularly.