COVID-19 is impacting every facet of healthcare across the globe. From resource shifts to hourly protocol changes, this is a turbulent time. While you remain active in facilities, we are here to provide you with the planning and financial data you need to keep your practice running.
We understand that things are changing at a rapid pace and want you to know that we are here to provide continued support for your anesthesia practice.
If there is anything you need, don’t hesitate to reach out.
What Our Clients Are Seeing
Case Numbers Are Declining
Facilities across the nation are canceling and postponing elective procedures. At first, these changes were impacting just outpatient and endoscopic procedures. However, as the situation has become more dire, cancellations have expanded to all types of nonurgent care to provide the manpower and resources needed for critically ill COVID patients. It appears that only patients requiring life or death care – such as cardiac, trauma, infections, and cancer – will move forward with their surgeries.
The elimination of elective procedures will reduce anesthesia provider workloads by about 75%, but it is unclear how long this reduction will last.
Projected Revenue Numbers Decreasing
As expected, less work means less revenue potential for anesthesia groups. Given the procedural nature of the revenue cycle, management and accounts receivable groups won’t immediately feel the severity of these impacts. It is likely that the more serious financial implications of a smaller workload will be felt more in the upcoming months as the money those groups are receiving now is from procedures done one to two months prior.
There is more to consider than just the anesthesia side of generating, processing, and collecting claims. Essential partners needed to upport claim and payment processes, such as carriers and banks, may also have to wind down or halt operations. In addition, the ability to collect payments from patients may also take a hit. Patients who are out of work may not have the funds to pay for prior services.
Determining long-term revenue and cash flow will require detailed analysis to support long-term planning.
Balancing Staff to Workloads
Matching staffing needs to workloads is proving to be a huge challenge. Most anesthesia groups operate on a fairly standard and predictable flow of work. Given the constantly changing environment and the need to cancel most surgeries, anesthesia groups are facing two challenges:
- At this time it is nearly impossible to anticipate the potential case flow over the next few months.
- That being said, most anesthesia groups don’t currently have the flexibility to rapidly modify their staffing model should things change (which is highly likely).
We are all optimistic that this pandemic will slow down – but most anesthesia groups can’t keep unneeded personnel on hand for more than a few weeks. Since this staff will be needed later in the year, groups are looking to avoid layoffs by:
- Asking staff to use their paid time off (PTO) to continue receiving pay without working
- Implementing extensive furloughs
- Allowing staff to shift from fixed salary to hourly status with reduced hours
- Exploring other options for anesthesia providers to provide care where needed within a facility (like the ICU or respiratory management – but this can create complicated billing challenges)
Maintaining clear communication with your staff about potential fluctuations to their income is critical.
How to Manage These Changes
Maximize Cash Flow
The best way to handle the changes coming to anesthesia groups is to determine how you can maximize cash flow to wait out the storm. By exploring your financial options now, it is still possible to:
- Minimize financial impacts to your staff and their families
- Avoid layoffs
- Shorten the long-term impacts of COVID-19
Here are the things you should be asking and reviewing with
your billing provider:
- Review hospital contracts: Most hospital contracts include provisions for revenue minimums. It is worth exploring what provisions your current contract has – and working with the hospital to determine if and when emergency funds might become available.
- Profit sharing and 401k: Many groups offer profit sharing and 401k matching as part of their employment contracts and complete this matching early in the year. Work with your accountant and complete some long-term tax planning, so you can push these contribution deadlines to later in the year.
- Credit extensions: Explore whether your group is eligible for an extended credit line. Taking advantage of this option makes it possible to maintain some payroll even as initial cash runs out.
Even with things constantly changing, it’s important to look at your financials and try to come up with a long-term plan.
We Are Here to Help
Navigating the complicated anesthesia landscape is more challenging than ever. In an effort to minimize long-term impact on anesthesia groups, it’s important you talk with your anesthesia billing provider and accountant. Working with your financial team will allow you to come up with a long-term plan to keep your practice running.
At Fusion Anesthesia, we have been working with anesthesia groups for over 45 years to provide billing, practice management, and revenue cycle management services. While this global pandemic is uncharted territory for everyone, our extensive experience allows us to provide you with knowledgeable advice on how to weather this storm.
Have any questions? Need help with any of the topics discussed?