COVID-19 continues to have a devasting impact on the overall healthcare ecosystem. While the stories of personal protective equipment (PPE) shortages and the need for additional hospital capacity in pandemic hot spots are widespread, there is another side of the impact that has been less publicized.

Seemingly overnight, health systems and physician groups have experienced drastic volume decreases caused by statemandated stay-at-home orders, mandatory cancellations of all elective procedures, and patients canceling or delaying nonurgent visits and procedures to avoid potential exposure to COVID-19. In response, healthcare organizations are making swift and often painful decisions to aggressively manage expenses, including furloughing clinical (mostly ambulatory, outpatient, and procedural) and nonclinical staff, reducing executive pay, and stopping retirement
contributions or bonuses.

According to a Medical Group Management Association survey, medical groups have experienced a reduction of 55% of revenue and 60% of patient volume since the beginning of the COVID-19 crisis. Similar to the range of geographical impacts of COVID-19, Guidehouse’s experience is that medical groups are seeing a range of impacts to their volume and business based on specialties:

• Primary care: 30% to 50% reduction of volume; some organizations have been able to mitigate this with effective deployment of telehealth and video visits. Medical groups have experienced a reduction of 55% of revenue and 60% of patient volume since the beginning of the COVID-19 crisis (MGMA)
• Medical specialties (cardiology, neurology, rheumatology): 40% to 60% reduction of volume.
• Surgical/Procedural specialties: 60% to 80%-plus reduction of volume/procedures.
• Hospital-based specialties: varies based on location; specialties tied to proceduralists listed above have seen similar decreases (e.g., anesthesia); Emergency departments have seen 30%-
  50% reductions; hospitalists/intensivists have seen similar decreases in most non-“hot spot” markets as hospitals have reduced volumes to prepare for potential COVID-19 patient surges.

As independent or health system-owned medical groups prepare to respond to the current crisis and the ongoing challenges that will be present over the coming months, we recommend that they consider organizing their actions into the following four “R” phases:

• Respond: immediate actions that an organization needs to take to remain solvent during the initial months of the pandemic
• Restore: address near-term cash pressures by accessing advances and grants
• Redesign: ramp up practices and take appropriate steps to deal with potential surge of pent-up demand
• Revitalize: implementing changes to adjust to the “new normal,” adjusting the cost structure to deliver services that patients require at a lower expense point