Primary Care Practices Expected to Lose Billions in Revenue from COVID-19


Data from a simulation performed by investigators from Harvard Medical School is detailing the potential losses in revenue primary care practices are expected to experience in 2020.

Sanjay Basu, MD, PhD

Sanjay Basu, MD, PhD

While many healthcare services have been pushed to capacity in recent months, the coronavirus disease 2019 (COVID-19) pandemic could cost primary care practices more than $15 billion in lost revenue during 2020.

Findings from an analysis performed by researchers from Blavatnik Institute at Harvard Medical School projects primary care practices across the nation to lose more than $65,000 in revenue per full-time physician this year as a result of declines in office visits and fees for services from March to May.

“For many primary care practices, particularly those serving the most vulnerable populations, these losses could be catastrophic, with many practices being forced to close,” said lead investigator Sanjay Basu, MD, PhD, director of research and population health at Collective Health and a faculty affiliate in the Harvard Medical School (HMS) Center for Primary Care, in a statement from HMS. “This could weaken the U.S. health system dramatically at a time when we need it to be at its strongest.”

While the impact of COVID-19 on medicine and society as a whole has been unmistakable, Basu and colleagues felt few had accurately described the projected financial impact of the pandemic on different types of medical practices. With this in mind, they sought to detail this impact using a microsimulation model incorporating data on primary care utilization, staffing, expenditures, and reimbursements, including use of telemedicine visits. As part of their analysis, investigators also incorporated multiple alternative scenarios to assess impact of certain policy or practice changes.

Using a previously validated model for estimating primary care expenses, investigators designed their study to simulate impact across practices organized into 4 classes of primary care. The classes were defined as Federally Qualified Health Centers (FQHCs), non-FGHC urban practices in high-poverty areas, non-FQHC rural practices in high-poverty areas, and practices outside of high-poverty areas.

Of note, input data for the analysis was obtained from the Medical Group Management Association DataDive, the National Association of Community Health Centers, and the National Ambulatory Medical Care Survey.

Results of the investigators’ analysis indicated primary care practices could be expected to lose $67,774 in gross revenue per full time physician during 2020 due to COVID-19’s impact on fee-for-service payments (IQR, -$80,577, -$54,990). The model estimated the 2020 gross revenue with COVID-19 to be $474,416 compared to an anticipated gross revenue of $542,190 if COVID-19 had not occurred. With more than 220,000 primary care practices in the US, investigators calculated gross revenue losses could reach $15.1 billion (IQR, -$12.3 billion, -$18.0 billion) at a national level if practices chose not to furlough staff.

In an alternative scenario estimating the impact if a second shelter-in-place went into effect during November and December found the overall loss at a national level could reach $19.1 billion (IQR, $15.5 billion, $22.7 billion) during 2020.

An additional alternative scenario estimated the effect of telemedicine payments reverting back to pre-COVID-19 levels beginning in October 2020 found practices could be expected to lose $173,453 in gross revenue (IQR, -$207,511, -$139,395). Under this scenario, the loss at a national level could reach $38.7 billion (IQR, -$31.1 billion, -$48.3 billion) if practices chose not to furlough staff. 

“The coronavirus pandemic highlights the fragility of the primary care system,” said Bruce Landon, HMS professor of health care policy, in the statement from HMS. “Over half of primary care practices remain small and physician-owned and these independent practices have limited access to capital and other support that could help them weather the pandemic.”

This study, “Primary Care Practice Finances In The United States Amid The COVID-19 Pandemic,” was published in Health Affairs.

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