COVID-19 is not the only pandemic sweeping the globe; we are also experiencing a financial pandemic that could prove to be nearly as disastrous. Thousands of people have lost their jobs, been furloughed, or taken dramatic decreases in pay. This situation is especially unique for healthcare professionals.
Although some doctors have been busier due to the virus, many (if not most) are losing substantial amounts of revenue. In fact, 97% of physician practices have taken a financial hit as a direct result of COVID-19.* Even hospitals in heavily infected areas are facing financial crises, as they have lost revenue from elective surgeries and are spending more on COVID-related expenses.
In a recent survey, the Medical Group Management Association (MGMA) found that healthcare practices have experienced a 60% average decrease in patient volume and a 55% decrease in revenue.* This drop results from the cancelation/postponement of revenue-driving elective surgeries, as well as a reduction in patient visits in compliance with social distancing mandates.
Because many physicians are compensated relative to the work they do, most have seen an immediate, substantial drop in income. Many are now living on a mere fraction of what they were making before.
So, as a healthcare professional, what steps can you take to ensure financial stability for your business and your family? Consider these practical applications.
As a private practice owner:
Communication with your employees is essential. Keep them in the loop and consistently ask for feedback, concerns, and other input. In these times of great uncertainty, strive to make your employees feel as heard and informed as possible.
2. Consider Expanding Your Telehealth Abilities
Although telehealth visits cannot make up all the revenue you are losing, they can assist in restoring some normalcy to your practice. In disciplines where these types of visits would be effective, consider investing in telehealth technologies that will allow you to conduct patient visits throughout the duration of this pandemic.
3. Reach Out
If you are a private group in contract with a hospital, consider reaching out to them for liquidity and support. Most hospitals don’t want to have to find a new group to contract with, and so have incentive to help you survive and succeed. This could help you avoid layoffs and furloughs, enabling you to stay financially stable for the duration of this pandemic.
In your private financial life:
1. Don’t Be Afraid to Use Your Emergency Fund
The cut in pay has, no doubt, affected your life tremendously. However, times like these are the ones you have been saving up for. Although no one likes to cut into savings, your emergency fund has been set aside for this purpose. Avoid going into debt, and instead, use the 3-6 months of funds you have saved for emergencies.
2. Meet with Your Financial Advisor
This is also a critical time to sit down with your medical financial advisor and review, adjust, and refine your financial plan. They will assist in rebalancing your portfolio so as to reflect the current market. Staying in close contact with your trusted advisor will decrease the likelihood of making poor financial decisions during this uncertain time.
At IMAFS, we work specifically with healthcare professionals in the Utah/Idaho area to establish financial plans that help you reach your goals as a physician. Our wealth management firm in Boise and the surrounding areas is ready to assist you and your practice in maneuvering through these financially unique times.