IN THE MIDST OF A PANDEMIC that has narrowed the focus of the state’s health care system, use of the system overall is down and many physician practices are warning they may have to consolidate or go out of business, according to data released Wednesday by the Massachusetts Health Policy Commission.
David Auerbach, senior director of research and cost trends for the Health Policy Commission, called the number of lost or furloughed health care jobs “pretty striking and totally unprecedented.”
Since March, state health care organizations have focused on ensuring they have capacity to handle the surge of COVID-19 infections. Gov. Charlie Baker ordered health care practices to stop all elective procedures, and most non-emergency care was shuttered. Practices have only gradually resumed urgent and, more recently, preventative care.
A survey conducted by the Health Policy Commission, state medical schools, and others surveyed 400 physicians’ offices in Massachusetts from late May through early June. It found that more than 20 percent of primary care and behavioral care practices and at least 40 percent of specialty and “other” practices were considering closing altogether. Approximately 20 percent of the non-behavioral health medical practices would consider consolidating with a hospital or another practice. (Behavioral health practices reported doing better than other medical practices.)
Excluding behavioral health, around 60 percent of practices reported having to furlough, layoff, or cut salaries of employees. Anywhere from 40 percent of behavioral health providers to 63 percent of medical specialty practices are considering cutting services.
Health Policy Commission member Don Berwick called the number of potential closures “dramatic and way above what I thought we’d be seeing.”
David Rosman, president of the Massachusetts Medical Society, said in a statement that physician practices have been hit hard financially since the start of the pandemic because of the precipitous drop in patients. “While some primary care physicians may be able to sustain a viable practice in the short term, the long-term viability of these practices is in jeopardy,” Rosman said.
Rosman said he worries about the continuity of care for patients who lose their primary care doctors when those doctors retire or sell the practices. “In the short and midterm, it is imperative that the federal and state governments, payers and all who engage with the larger health care community work together to provide support to practices working toward stabilizing their practices to provide necessary patient care,” Rosman said. “In the long term, we need to acknowledge the need for repair of a health care financing system that is leading to financial woes and bankruptcies in the midst of a health care crisis.”
The reason for the shifting landscape is that despite the spike in coronavirus-related care, the total amount of health care provided over the last couple of months – even with vastly expanded use of telemedicine – has dropped sharply. People have stayed away from hospitals and doctor offices unless they had a coronavirus issue. (CommonWealth reported on one primary care doctor’s plight in May.)
According to national figures included in the Health Policy Commission report, visits to physicians’ offices dropped by around 65 percent, comparing April 2020 to April 2019. Emergency department visits dropped by 50 percent, operating room minutes dropped by 80 percent, and outpatient revenue was cut in half. There was a one-third reduction in inpatient hospital care. New England and the mid-Atlantic states saw the biggest drop in outpatient visits.
Different specialties were affected differently. Psychiatry, for example, saw the lowest reduction in care, since many appointments could be done through telehealth.
Nationally, employment in health care actually dropped by 5.7 percent during the pandemic – less in hospitals and nursing homes, and more in labs and doctors’ offices.
In Massachusetts, employment in doctors’ offices dropped by 30 percent, or 17,000 individuals between February and April. Employment in outpatient care centers dropped by 22 percent, or 6,000 individuals, and in nursing and home health care by 12 percent, or 18,000 individuals. Hospital employment remained steady. These numbers include employees who were furloughed or laid off.
Overall, the report found that health care spending in Massachusetts is expected to decline this year. While spending on coronavirus-related care will increase spending 1 to 2 percent, estimates suggest that spending reductions due to lower rates of other care will be around 10 percent in 2020. The organizations hit hardest will likely be community hospitals, physicians’ offices, and community health centers, which depend more heavily on outpatient revenue.
The Massachusetts Health and Hospital Association estimates that hospitals and their affiliated physicians’ practices have lost $1.4 billion each month since the state of emergency was declared in March, due to the cancellation of elective procedures and the decline in outpatient services. By the end of July, losses could exceed $5 billion.
The association said in a statement that additional government support will be “absolutely crucial to the survival of our hospitals and affiliated physician groups.”
Another feature of the pandemic is that is has accelerated a move toward telemedicine. In the northeast, in March 2019, less than 1 percent of doctors’ visits were being done by phone or video – compared to 11.1 percent in March 2020. But it is unclear what the financial impact will be.
For now, Massachusetts requires insurers to reimburse for telehealth at the same rate as regular visits, although that could change.
Health Policy Commission Chair Stuart Altman said some people think telehealth will substitute for office visits, which will lower costs. But he worried that it will become an add-on – for example, if people ask for a virtual visit only for their doctor to tell them to come in. “It’s possible total spending as a result of increased telemedicine will go up and not down,” Altman said.