Almost Half of Med Practices Furloughing Staff, 1 in 5 Have Layoffs: Survey

Ken Terry

April 16, 2020

Clinicians all over the country already likely know this, but a survey by the Medical Group Management Association (MGMA) makes it official: 97% of physician practices have experienced negative financial effects directly or indirectly related to COVID-19.

The survey, which was conducted April 7 – 8, also shows that 55% of practices have seen a decrease in revenue, and 60% have experienced a decline in patient volume since the beginning of the COVID-19 crisis.

A significant number of medical practices have also been forced to lay off or furlough staff in response to the COVID-19 crisis, MGMA said. Many practices that have not yet laid off or furloughed employees will consider doing so if the conditions persist over the next 30 days, the survey indicates.

Through April 8, 22% of survey respondents reported they had laid off staff. In the same period, 48% had furloughed employees. The survey projects that by May 8, if the COVID-19 situation hasn't improved, 36% of practices will have laid off staff members, and 60% will have furloughed them.

The survey received 724 applicable responses, MGMA said. Approximately 75% of respondents are part of independent medical practices and employ fewer than 50 full-time-equivalent physicians. But the respondents belong to practices of all sizes and specialties, MGMA noted.

The bare numbers only scratch the surface of the pain that many groups and owners of physician practices are feeling.

"Not only has 70% of our revenue disappeared, but our physicians are still working every day, exposing themselves to risks, taking care of patients, and taking care of their employees by continuing to pay them while they have taken over a 50% pay cut," said a representative of an independent anesthesiology practice in Alabama who was quoted by MGMA.

The MGMA survey report also cited a small independent practice in Mississippi that specializes in pain management. "All doctors and administrative staff have deferred their salaries during this period," a practice representative said. "We have laid off most of our staff except 5 people."

Employed groups tend to be in better financial shape than independent practices because they have the resources of large healthcare systems behind them. Some hospitals have laid off employees, however, and some of the cuts are starting to hit outpatient clinics, as reported by Medscape Medical News.

Elective Procedures Down

In an interview conducted before the survey was released, Halee Fischer-Wright, MD, president and CEO of MGMA, told Medscape Medical News that single-specialty groups that perform elective procedures have seen "dramatic decreases in volume." The Trump administration and at least two dozen states have asked hospitals to halt those procedures during this phase of the crisis, according to multiple media reports.

Some groups with multiple offices, Fischer-Wright noted, are deciding whether to staff them all because of their decreased volume and their concern about staff exposure to the coronavirus.

"We see them condensing down and delegating sick and well offices," she said. "The benefit is that it allows them to be efficient with their staff use and also to place their limited PPE [personal protective equipment] supplies in the right office."

Noting that there are costs involved in laying off staff and that practices want to retain good people if possible, Fischer-Wright advised practices to furlough employees rather than lay them off if they can.

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