The COVID-19 pandemic and resulting global healthcare crisis have altered physician practice leadership and will significantly change both the way medical practices operate and how providers deliver care.
As we look to a post-COVID-19 landscape, LBMC has identified three key areas medical practice leadership should begin evaluating now for optimal post-COVID-19 care delivery.
Patient Access & Treatment Delivery Model Transformation
To support social distancing and risk mitigation, many providers successfully pivoted to telehealth to deliver services for their patients. Regulatory agencies and insurance payers have, for the most part, embraced this adoption by providing additional coverage and expanded flexibility as it pertains to technology and the originating/distant sites. Concurrently, patients have experienced enhanced ease of access with reduced virus exposure concerns and long waits.
For those providers that have embraced the shift in delivery by altering scheduling templates and investing in technology, the percentage of 'no show' appointments has been reduced, creating enhanced productivity and financial performance. A successful transition to (and continued enhancement of) this new model will position practice leadership for future successes. Practice leadership will need to either acquire and/or train current staff to fully support this new vertical in the delivery of care.
Assess Potential M&A and Employment Opportunities
Some practices will not have the cash flow or risk tolerance to maintain their practices as a result of COVID-19. In these instances, merging with a larger group or healthcare system or selling their practices represent alternatives to simply closing the practice. Private equity firms have emerged as key players in the industry in recent years, and it is likely they will continue to purchase practices post-COVID-19 as they see enhanced value in the marketplace. As a result, post-COVID-19 purchase price offers will likely be less than before the pandemic.
Physician practices reviewing their options to merge or be purchased should conduct sell-side reviews via an experienced consulting firm to assess operational opportunities to improve and to enhance the overall value of the practice. Strategic planning to gain consensus among the group will be critical to map a successful path forward.
Consider an MSO to Provide Back-Office Support
Despite the various CARES Act relief funds (i.e. PPP), many medical practices were forced to furlough key staff or were unable to provide the technology to support a virtual employee model. Many medical practices lack resources due to historically lean staffing levels. For these practices, a management services organization (MSO) can provide support services (revenue cycle, HR, accounting, technology) to maintain operations post-COVID-19 while enabling clinicians to continue to provide care.
As many patients may have lost their jobs and associated health insurance, an enhanced focus on patient collections will assist practice leadership in maintaining cash flow. Practices and providers should vet an MSO's ability and expertise to gain greater leverage with payers and related vendors to optimize the practice's financial performance. By outsourcing back-office functions, practice leadership can focus on other key sustainability issues within the organization.
Prepare Now for Post-COVID
If you lead a physician practice, your practice is undoubtedly experiencing the effects of the COVID-19 pandemic. As we continue to grapple with the global healthcare crisis, now is the time to look not only how your practice operates, but how you safely take care of patients. There are options available to leverage your valuable resources in order to optimize the financial and operational performance of your practice. Consult an expert to ensure you are prepared to effectively run your practice and provide patient care in a post-COVID world.