Financial Woes for Primary Care

Woman having telehealth appointment Photo by Edward Jenner from Pexels

Due to the COVID-19 pandemic, virtually all elective procedures and the majority of in-person outpatient visits in the United States were canceled between February and May 2020, with much of this care pivoting to virtual care.  Lost in the din of hospitals and health systems seeking relief has been the plight of primary care practices, many of which lack the financial resources to withstand a prolonged drop in revenue. A study published in Health Affairs by Sanjay Basu, MD, PhD and Russel Phillips MD, MPH of the Harvard Medical School Center for Primary Care, professor of health care policy  Bruce E. Landon, MD, MBA and colleagues from the American Board of Family Medicine, estimates the potential monetary impact of the COVID-19 pandemic on primary care practices.

Primary care practices are estimated to lose over $67,000 in gross revenue per full-time physician in 2020, which equates to a $15.1 billion overall loss across the country. These losses would balloon substantially if there is a second peak later in the year or if reimbursement for telehealth reverts to pre-COVID levels.  As legislation to financially aid hospitals is introduced, independent primary care practices have yet to receive significant financial help.

When the current threat of the COVID-19 pandemic recedes, it will be crucial that the US has a functioning primary care system to manage long-term COVID-19 care, testing, and vaccination. It must also be equipped to meet the pent up needs of the population and resume attention to controlling the major chronic medical conditions that collectively will determine the health of Americans for many years to come.

Primary care practices that experience major revenue loss as a result of COVID may be forced to close if they do not receive sufficient financial assistance. The authors highlight the vulnerability of primary care practices to financial demise due to fee-for-service and visit-based payment policies, and suggest that capitation-based payment reforms may be key to ensuring robustness of primary care into the future.