Primary Care Post-COVID-19: Options for the Future

The foundation of American healthcare was once the self-enterprising primary care doctor. That’s how ChenMed started. My parents put up their “shingle” and ran a local Miami practice. I fondly remember the experience of being a “docpreneur” when I joined them out of medical training. The empowerment to do what it took to improve the health and satisfaction of our patients, and find new patients, was exhilarating.

But in the last couple decades, this kind of physician-owned primary care practice has been slipping away — in fact, a majority of physicians now are employed by a hospital system. The practices left standing face ever more complexity to meet payor and government requirements. COVID-19 is a hammer coming down upon the holdouts, as in-person visits essentially disappeared overnight. It has decimated bottom lines for so many small practices. Although hospital-owned physician groups are getting large government bailouts, one-third of primary care clinicians only have enough cash to function for four weeks, according to one big national survey. And sobering projections from HealthLandscape indicate that 60,000 primary care practices across the country may shutter or significantly scale back in the months ahead.

In the face of such financial uncertainty and anxiety, what does the future of primary care look like and what are primary care doctors running their own practices to do? I submit there are two paths out of this crisis.

The Future of Primary Care Practices — Options

Hunkering down, hoping for a bailout and a return to the status quo is technically an option. So is just closing up shop. But neither are the two paths forward I am talking about. Physicians who own their practice have the same options as any business owner in any industry: innovate or join forces with someone else.

Innovate

Innovation can take many forms. Evolving and introducing new products or services, changing the business model, or just adapting operational norms to work in the current context. The best small business owners can do just this because they are relentlessly creative, allowing no obstacle to stop them. In fact, obstacles are opportunities in disguise to entrepreneurs — an invitation to get better, to pivot, to reinvent.

In medical practices, the innovation options run the gamut. There is an option to keep providing your core service, but innovate the way a patient works his or her way through a visit. Consider the communal waiting room, for example. Perhaps now is the time to reimagine check-in, waiting, and rooming to a “touchless” experience. And, of course, update your cleaning and disinfecting protocols. Then be transparent and communicative so patients trust you and feel confident that it’s safe to come for care. Their health needs have not gone away and maybe your volume doesn’t have to either.

There is also the option of innovating what you do to serve patients and generate your income. It’s really hard to pivot under duress, but, if you’re up for it, practices can capitalize on the lesson COVID has taught us that “seeing” patients doesn’t have to mean having them visit you in person. The pandemic has triggered many changes to telemedicine policy, including reimbursement. Or, now may be the time to fill a gap you see, even if it’s not covered by insurance. Perhaps patients will pay directly for health counseling, social services, or… you name it. Your imagination is the only limitation here.

If you really want to innovate, and hedge your risk against losing billable volume, now is an optimal time to bail on fee-for-service and go to capitation. Though it takes time to change contracts, and there is risk in the early days while learning to thrive in a new economic model, this can be a wise long-term strategy if you can bridge the short run. In fact, whether you jump to full-risk capitation, a direct primary care model, or something else, diversifying away from face-to-face CPT code-based fee-for-service can secure a reliable revenue stream, unleash more flexibility to care for your patients, and may protect you from a future crisis.

Joining Forces

Let’s be candid. The innovation options are not easy and you may want another choice. Joining forces is the path so many small businesses in every industry have followed since capitalism began. It’s a logical path, offering the entrepreneur necessary scale and resources to survive. It also removes a lot of the administrative burden (those parts of owning a business that are the necessary evil of doing what you love) and provides a financial windfall for all the blood, sweat, and tears that went into launching and running the small business.

Before you join forces, it’s vital to think critically about your options. The choice will define your future. There are the basics like where you’ll work, what will happen to your staff and patients, what EMR you will use. But the real question is: What vision and larger purpose are you connecting yourself to? Ask yourself: Why did I go into private practice, and will joining forces with someone get me closer to that?

The common options for primary care doctors have been to find a suitor in the local dominant hospital system, sell out to an insurance company that is getting into care delivery, or find a financial buyer in the form of a private equity firm. Consider the pros and cons with each. All of them are going to help with the burden of practice administration and have resources to pay for EMR, scheduling, and billing technology. But those aren’t the big considerations.

Hospitals are a known entity. They give you that local brand name and may not get very involved in your operations. But it’s important to look closely. Are they looking for primary care to help with improving the health of the community? Or will they ask you to be a glorified triage nurse? Many hospital administrators call primary care a “loss leader” designed to feed patients into their inpatient setting and highly lucrative specialty services, which can be an uncomfortable spot for a proud primary care doctor.

 Insurance companies are no stranger to buying doctors. Optum, a division of United Healthcare, is the largest employer of physicians in the country. Insurers have a lot of money and resources and, since they pay the claims, won’t be looking for you to drive care you know isn’t needed. But insurers and providers are very different beasts. They may not see things through your lens, or appreciate the role of physician autonomy and decision-making. Look into who will decide what services your patients can get, how the company plans to control your costs, and whether or not you’ll be limited to getting patients only in their own preferred insurance products.

Private equity buyers are often very astute businesspeople and can improve the efficiency of your operations. Remember, however, they’ve promised a return to their investors. That means a certain liquidation event (getting sold to a new buyer or becoming a public company). They also, frequently, use leverage (borrowing a lot of debt) to increase their rate of return in the end, but this strategy also pulls cash out of the medical practice each month to service the debt. That puts strain on the business to get reliable cash flow (a problem that has led to many failures during COVID). The implication of the private equity strategy is that it is common to see changes in leadership, philosophy, contracts, and the actual goals of the business. I’ve seen this push many doctors past their comfort zone when it comes to what is demanded to grow and make more money.

There is yet another option: Find a like-minded physician-led and run practice that’s big enough and stable enough to help today and for the long term. Here you may find a group that shares your focus on investing in physicians — their clinical training, business training, and even mind, body, and spirit wellness — and serving the best interest of patients. Figure out if their philosophy is similar to yours and how they help physicians succeed.

With any possible suitor, ask yourself if they have what it takes to be successful in the current and future environment. For example, joining a proven leader in value-based care could offer you a chance to learn and improve as a doctor while giving you the safety to make the leap to something you’ve always wanted to do: Move away from billing headaches and focus instead on providing the right care to improve patient outcomes.

I know I didn’t include, “How much will you buy me out for?” Of course, that’s important, and there is a minimum value below which you shouldn’t waste your time entertaining discussions. But, in the long-run, your success will be measured in a variety of intangibles — your enjoyment of practicing in the new environment, how your long-time patients are treated, and your ongoing financial opportunity — that are more important than one transactional number.

Lastly, don’t forget to ask about your options should the “marriage” not work out. Will you be able to practice elsewhere, or will your opportunity to start anew be contractually shut off?

My family built ChenMed on an unwavering belief in the power of entrepreneurial doctors who wanted accountability for the health and well-being of their patients, and a desire to serve more patients. COVID-19 is a human tragedy, but it can be an opportunity — rather than a death sentence — for smaller, independent primary care doctors to evolve or join forces with growing, independent physician-owned practices like ChenMed. Explore what primary care can look like. Learn more about practicing at ChenMed — and, if you’re not in one of our 20 cities, we’re still happy to hear from you and might be able to help find similar innovative practices near you.

This article first appeared on the ChenMed blog.