The pandemic has impacted the bottom line of nearly every industry, including health care. Many providers reduced their services due to the suspension of preventive care, non-urgent visits, non-emergent surgery, and office procedures.
These directives, designed to slow the spread of the virus, have caused many practices to face potentially perilous financial circumstances. As patient volume has declined, streamlining the revenue cycle and improving cash flow have become priorities.
The first half of 2020 saw a precipitous decline in health care spending—the U.S. Bureau of Economic Analysis reported an annualized rate of 17.3 percent through May 28.1 Fortunately, as the Peterson-KFF Health System Tracker reports, with the rebound of in-person care, spending through the third quarter of 2020 has fallen only 2.4 percent compared to 2019.2
Source: Peterson-KFF Health System Tracker.
However, the Peterson-KFF Health System Tracker also warns that this positive rebound in spending could reverse as the pandemic worsens throughout the country.2
And any decline in health care spending is compounded by the fact that unlike most other service industries—where payment is received at the completion of service—medical practices are not compensated until charges are filed through Medicare, Medicaid, or an insurance company. Often, payments are not received for up to three months.3
Although Congress has been providing financial assistance to health care providers, much of the support has gone toward hospitals—and many practices fear a market ripe for further acquisition and consolidation by larger health systems, increasing the threat to the independent practice.4
Fortunately, resources are available. The Coronavirus Aid, Relief, and Economic Security (CARES) Act may be able to mitigate the financial damage to your practice with provisions including small business loans, financial support through the Public Health and Social Services Emergency Fund, and emergency loans.
In addition, Henry Schein Medical is committed to providing additional resources and offering a variety of financial options to help manage cash flow during these challenging times. We have recently launched a financing program that allows you to refinance existing business debt and secure additional funds to help operate your practice. We can also provide merchandise financing, working capital loans, and flexible options with extended deferrals for new equipment purchase.
Henry Schein Medical offers credit and payment programs and can help you navigate the CARES Act.
One way to improve your finances is through strategies to optimize your revenue cycle.
Your staffing strategy may be evolving due to the financial effects of COVID-19. We offer solutions to identify, hire, and maintain the best staff for your practice.
American Medical Association experts discuss financial strategies and new federal programs during COVID-19.