By Kyle Marshall, Blue Cross NC
Primary care physician John Scheitler, MD, knew his Gastonia practice would take a financial hit as patients put off visits out of fear of getting COVID-19. So he and his partners embraced telehealth, trimmed costs and applied for financial assistance.
Nearly three months into the pandemic, the money pressures haven’t been cured.
“We’re making it, but it’s very difficult,” says Scheitler, with Piedmont Adult & Pediatric Medicine. “The best way I can describe it is it’s day-to-day survival.”
Scheitler’s primary care practice is like many in North Carolina. Most physician offices are taking steps to cut costs, including reducing staff hours and, in some cases, eliminating jobs, according to a recent survey of 500 physicians conducted by the N.C. Academy of Family Physicians and the N.C. Pediatric Society. Almost one in 10 primary care practices is considering closing or selling to a larger entity.
“There is a serious chance that the state will lose primary care capacity if immediate assistance is not provided,” the two medical organizations say in their report.
The Challenge of Being Independently Owned
The problem is more acute for independently owned primary care practices. Doctors’ offices owned by hospitals and health systems, while also facing a downturn in business from postponement of routine visits and elective procedures, generally have more resources to withstand financial pressures.
The dramatic impact of the pandemic on physician practices showed up in the U.S. unemployment report for April, as physician offices lost more than 243,000 jobs.
If the pandemic forces more strain on independent primary care, it could have far-reaching consequences for the state’s health care system. Shortages of family physicians, internists, pediatricians and OB/GYN doctors make it harder for patients to get appropriate access to care – especially in rural areas. The health care system depends on primary care to guide and influence patients’ medical decisions.
Roughly half the state’s primary care physicians are in independently owned practices. The percentage is higher in rural areas, which can ill afford more losses of primary care.
“Primary care is at the center of making health care better and more affordable,” says Rahul Rajkumar, MD, chief medical officer at Blue Cross and Blue Shield of North Carolina. “We have to make sure primary care remains healthy and viable.”
Tapping into Financial Relief
Many independent primary care practices across North Carolina have applied for and received federal assistance, such as the CARES Act Provider Relief Fund and the Small Business Administration’s Paycheck Protection Program.
The survey of North Carolina physicians found about half of the respondents had applied. Of those, about 90 percent that have received a response have been awarded relief.
Some independent primary care practices are also finding other means of financial support. About one in five practices is using bridge loans or lines of credit, for example.
Blue Cross NC has taken a variety of steps to help independent primary care, including accelerating its timeline of payments to practices in accountable care organizations. About 180 independent primary care practices in North Carolina participate in ACOs through Aledade, a company that helps practices transition to value-based care.
Blue Cross NC paid almost $9 million ahead of schedule to the practices through its agreement with Aledade. The funds were for meeting performance targets in 2019 – essentially bonuses for meeting quality and cost measures – and were due to have been paid this fall.
The combination of federal assistance and the advance payments from Blue Cross NC through Aledade have helped keep Piedmont Adult & Pediatric Medicine open, Scheitler says.
“It’s definitely helped to offset some of the losses. For the most part we’ve been able to keep staff and the same access for patients. We’ve been able to pivot quickly and respond to what our patient needs are.”
To meet those needs while ensuring that the practice stays in business, Scheitler has made good use of telehealth, seeing about 20 patients a day virtually. The practice also set up a schedule of well visits in the morning, office cleaning midday, and sick visits in the afternoon.
Patient visits to the practice are beginning to pick up, and Scheitler is optimistic he can get through the crisis.
Blue Cross NC also is speeding payments to health care systems with Blue Premier value-based care agreements. Those funds, also originally scheduled for this fall, represent shared savings on medical costs between the hospital systems and Blue Cross NC for 2019. Blue Premier agreements are a unique structure that hold the company and systems jointly accountable for meeting quality and cost standards. Some of those payments will go to independently owned primary care practices affiliated with Blue Premier systems.
For example, the funds paid early to UNC Health Alliance, which is participating in Blue Premier, will help ease financial burdens among its physician practices. UNC Health Alliance is considered a clinically integrated network with independent primary care practices.
In the most recent effort to help primary care deal with the effects of the pandemic, Blue Cross NC is offering three months of free telehealth support through an agreement with Updox, a company that provides telehealth and collaboration technology to physicians, clinics and pharmacies. The program will help smaller practices get started in offering virtual visits to their patients. Aledade also is offering three months’ telehealth services to the practices in its ACOs.
Bridging the Funding Gap
These types of funding for physician practices are intended to bridge the gap until more patients return for clinic visits for routine and urgent issues. Primary care physicians expect to see an upturn in business soon. But it’s too early to tell what lasting damage might have been done financially.
In the short run, gains in telehealth adoption also are helping practices financially, as virtual visits are being paid at the same rate as in-office visits during the pandemic. Increased use of telehealth is expected to become a permanent fixture in health care.
Long-term, the pandemic is highlighting the need to help primary care physicians – especially independently owned practices – maintain their role as quarterback of the health care system. If patients aren’t seeing their primary care provider, they might be putting off needed care that would be more complex and expensive to treat later.
That extends beyond physical health to include behavioral health, chronic disease management, vaccinations and a host of health needs in which the primary care doctor serves as a trusted resource.
“In most cases, the best point of entry for care is primary care, where the team has a relationship with the patient,” Rajkumar says. “You can’t replace that. If we’re going to make progress on reducing costs and improving quality, we have to keep primary care at the center of care.”