Rural hospitals and private medical practices struggle to stay open during the COVID-19 pandemic

Key Points
  • It's not just the large, urban hospital systems that are struggling in the midst of the COVID-19 pandemic.
  • Doctors with their own independent practices in small to mid-size towns are trying to keep their doors open, but have seen huge revenue hits.
  • They are no longer performing elective, non-essential procedures. 
  • For Drs. Ed Boyle and his wife, Ida Alul, the impact has been "devastating."
Ida Alul and Ed Boyle are surgeons living in Bend, Oregon.
Ed Boyle

Surgeons Ed Boyle and Ida Alul are a married couple living in Bend, Oregon, a town of fewer than 100,000 people. 

Boyle runs a vascular surgery practice with about 40 employees, which he co-owns with a few other doctors. Alul is managing partner at an ophthalmology practice that performs many common procedures like laser eye surgery and cataract surgery and has 50 employees.

In recent weeks, they've seen a dramatic impact to their businesses as COVID-19 spreads across the country. Policymakers and medical associations have advised provider groups like theirs to halt nonessential procedures in order to preserve vital supplies for fighting COVID-19.

These elective procedures are the lifeblood for thousands of primary care groups, specialty clinics and surgical centers, and many of the doctors who own them are now struggling to make payroll. 

"Overnight we scaled back to having almost no patients," Boyle said, noting that his practice is still taking emergency cases.

"For practices like ours, it's been devastating," added Alul. "But we know it's the right thing as we take seriously that we shouldn't bring in our patients, many of whom are older. We don't know the extent of how prevalent COVID-19 is."

Private medical practices were facing existential threats before the COVID-19 pandemic, namely because of the trend toward consolidation. Hospitals in the past decade have gobbled up thousands of small practices, turning the doctors from self-employed to staff at large hospital corporations.

For those still in business, the prospect of little to no revenue for months on end is terrifying. And the lifelines that are available now will likely be primarily directed to the larger hospitals that are being hit hardest by the pandemic. 

'Already in crisis'

Congress decided this month to provide $100 billion for hospitals and health providers to help them survive. But nothing has been specifically earmarked for the smaller, independent practices. It's one big pile of cash, experts say, meaning that it will likely go to the largest hospitals that have the resources to hire big consulting and legal firms to help them navigate the regulations. 

Executives from smaller, rural hospitals also fear they will be left out. 

"Rural health care was already in crisis," said Dr. Susan Turney, president and CEO of Marshfield Clinic Health System in Wisconsin. "We're still doing care through telehealth services as we can," she said. "But revenue dropped so quickly, and now we're trying to think about staffing and how to control expenses."

Turney said revenues in her group — which has seven hospitals in the most rural parts of the state and primarily treats older and lower-income patients — are down more than 60 percent because they are no longer performing elective procedures. 

"I'm sympathetic to the fact that some large health systems are getting slammed, but they won't be the only ones that need help in the next few months," said Farzad Mostashari, CEO of Aledade, a company that helps independent practices develop more sustainable business models. 

Mostashari noted that another avenue is for physician-owned practices to take out a bank loan. But in that case, the doctors could see their credit impacted if they can't pay the loan back.

Mostashari's company is racing to help practices stay afloat by providing tools to train them in telemedicine so they can see patients remotely. And he's helping them to take advantage of other regulations, like the advanced payment program from Medicare, that can help address some short-term cash-flow issues. 

But that might not be enough to stop doctors from retiring early and shuttering their practices, policy experts say. And once they do, dozens of people who work for them could be out of a job.

"We will likely see cuts to medical staff at a time when we need them, and I've heard some stories of doctors using their own savings to pay staff," said Dania Palanker, a health policy expert at Georgetown University. "It's a really difficult time for so many medical providers and they're facing some tough choices about whether they can afford to retain employees." 

Turney also said the prospect of downsizing is a concerning one, in part because these staff members will be needed when the pandemic reaches its peak. 

'What we've built is at risk'

Boyle and Alul said their practices were thriving before the pandemic.

For now, Boyle has to reduce his staff's hours until he can safely resume elective procedures. Alul must reduce headcount but is hoping she can eventually hire staff back.

Both said that they have close, personal relationships with their employees, including their nurses, medical administrators and technicians. They are also worried about all the health workers that they send referrals, including physical therapists and prosthetics makers. 

The couple, who set up their respective practices more than a decade ago, say they are feeling highly uncertain. 

 "It's so stressful to think that what you've built together is at risk," Alul said.

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