This is the first blog in a three-part series that explores how physician practices can relaunch and help their business thrive after a period of social distancing.
As states cautiously re-open businesses closed due to COVID-19 social distancing restrictions, many people are beginning to recognize that the process of recovery may be a slow one. Careful consumers will not flock back to restaurants, stores, and malls if they are concerned about infection risk. Neither will team members. Physician practices are among the in-person businesses likely to experience a continued significant impact on revenue until a vaccine is developed and rolled out.
As NIAID’s Dr. Anthony Fauci warns, “Rolling re-entry [requires] the capability of being able to test, identify, isolate, get someone who is infected out of circulation — and do a degree of contact tracing.” The U.S. has not fully developed these capabilities yet, so the pandemic will continue to have a significant impact on daily life.
While hospitals cope with a surge of patients fighting this deadly disease, many private practices have been forced to reduce hours—or close altogether except for emergencies. A recent William Blair Survey illustrates the significant decline in patient volume compared to last year. 86% of practices surveyed (N= 357) saw a greater than 25% decline with 53% of practices experiencing a catastrophic decline in excess of 50%. Only 8% have seen no decline on a YoY basis. The only specialties somewhat insulated are psychiatry, addiction treatment, and neonatology.
Most of these practices have been focusing on survival—as they manage finances with the goal of keeping the lights on. But now they are facing a bigger challenge: how do you restart a physician’s practice that has been closed for four to six weeks? Few practices have any experience with such a process, so it’s not surprising if many are struggling with how to do it.
Here are just a few of the questions the managers of such practices may be asking themselves: Do you open all your locations at once? Should you bring back all your physicians and team members at the same time—or do it in a phased manner? How do you handle cleanliness and safety issues? How do you reorganize your physical space and patient care protocols? What effect will changes in volume and reimbursement have on a practice’s revenue? What changes in patient behavior should you anticipate?
In addition, practices will need to re-engage patients who have been out-of-touch. Those patients require a sense of confidence in your office’s safety measures before they are willing to return. Safety will probably necessitate slowing the throughput of patients. All these factors can have a profound impact on practices that are trying to relaunch themselves after a social distancing hiatus.
At the same time, healthcare providers will face a dramatic shift in compensation as high unemployment rates affect healthcare coverage. The worst-case projections predict as much as 21% of the population will become uninsured or go onto Medicaid. These patients—and those on COBRA—will be more careful about their healthcare spending decisions. In addition, they will not enjoy the same level of benefits that private insurance often provides. These shifts will impact not only the volume of patients, but also the kind of care they choose to receive. The elective self-pay market will likely shrink even more.
Underlying all these considerations is the question of capital, particularly since it requires a lot of capital to relaunch a practice. Where is your company’s capital best invested? How much should you compensate physicians and staff? How do you obtain more capital if you need more of it?
Unsurprisingly, most practices are struggling to answer these questions. This situation has never happened before. It is completely unprecedented, and there is no pre-existing roadmap to follow. However, you don’t have to embark on the journey alone.
Bancroft Group is here to help. We can help you map out a plan for your relaunch—one that addresses questions about staff training, office infrastructure, capital management, office staffing, compensation, etc. With more than 75 operating experts, we have the team to assist you: Bancroft Group can supply the executives and consultants you need to identify necessary changes and devise a plan to make them.
Depending on your organization’s needs, here are five key areas Bancroft can help:
Crisis Management – dealing with organizational confusion and challenges of COVID-19
Team Augmentation – providing constructive engagement on key organizational and leadership gaps
Relaunch roadmap – create leverage to existing team fighting fires to develop relaunch roadmap and support implementation
Define and design for new normal – creating clear definition of “new normal” for business from site level layout, safety and cleanliness protocols, team training and marketing
Augmenting team on capital management – supporting finance and leadership team on capital strategies and negotiations
Not only can Bancroft make a difference to your practice by providing deeply experienced executive operating partners, we can also augment their help with analysis, modeling, and consulting engagement resources.
Stay tuned for Part 2 in the blog series which delves into the details of finding relaunch solutions.