Will COVID-19 help move primary care physicians away from the fee-for-service model?

August 21, 2020

By Rose Hoban

When Karen Smith went to Jamaica in March, she planned a working vacation.

The Hoke County primary care doctor, whose practice thrives with about 3,000 patients, was in the island country to do some medical mission work when the first cases of COVID-19 were reported there.

She’s a little unclear on the dates now, but some time around March 13, she got word that the Jamaican government was planning to close down the country.

“Anybody in this in the country would end up being in a 14-day quarantine,” she said. “I was like, ‘No way, I’m gonna get home.’”

Smith rushed back to North Carolina to find a panicked staff.

“Patients were canceling appointments, they didn’t want to come into the office,” she said. “We had PPE consisting of two N95s, one gown and one face shield and three goggles. And that was it. The sanitizer that we had been using, the bottle was half empty and we had no more.”

Smith made a beeline to the nearest Walmart where she snapped up the last 10 pairs of goggles for protective eyewear. They got personal protective equipment donations from Cape Fear Valley Hoke Hospital, medical associations, the community, wherever she could scrounge it up.

“I mean the prices they were gouging… what was $5 was now $25 and that was price gouging from our usual vendors, which was unreal,” she said. “We had also started ordering some of the supplies from Amazon and they were simply just out of stock.”

In the midst of it all, Smith and her team pivoted from providing hands-on care to deploying telehealth for their patients. Just before Smith left for Jamaica, her staff participated in a two-day retreat where they’d practiced using computers and other screen devices for their primary care patients and for their patients on medication-assisted treatment for opioid dependence. So, her practice was ready.

“Two weeks later COVID hit,” she said, “We didn’t close.”

Smith’s team was fortunate that way. Nonetheless, she’s struggled with a steep drop-off in patients and revenue, and increased expenses since the spring.

The same story is echoed in primary care offices across the state.

How individual offices have been able to adapt in recent months offers a glimpse into a primary care ecosystem with deep vulnerabilities for the little guys in the smaller independent private practices that rely heavily on hands-on face-to-face encounters.

Some that already were preparing to offer virtual visits through telehealth models have been more nimble and able to adapt. Others are testing new financial systems that no longer count so heavily on the fee-for-service model, shifts that could offer a guide to the future as individual practices try to stave off consolidations that might offer economies of scale without bringing higher quality care.

According to a survey conducted by the North Carolina Academy of Family Physicians and the North Carolina Pediatric Society, 87 percent of practices reported being under “significant or extreme financial pressure.” For physician-owned practices, such as Smith’s, that number goes up to 92 percent.

Telehealth pivot hurts some small practices

According to the survey, practices have tried many different ways to stay afloat, from temporary closures to reducing hours. Physician practice owners reduced pay for themselves and their workers, furloughed staff. They applied for loans, sought help from the Paycheck Protection Program, tried to open new lines of credit or refinance their mortgages. Doctors did all this, even as they pivoted their practices to telehealth and comprehensively changed the way they operated.

Despite those pivots, the survey found that about one in 10 primary care physicians has considered selling the private practice or closing up shop completely.

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