Walloped by COVID-19, US Cardiology Practices Brace for Slow Recovery

Despite toiling on the front lines of the COVID-19 pandemic, the medical community at large has not been spared the layoffs, furloughs, and sweeping financial toll. Around the United States, physicians across specialties have seen dramatic, sudden drops in patient volumes and revenues as elective procedures and testing ground to a halt and people isolated in their homes.

It’s been no different for cardiology, said Jerry Blackwell, MD, MBA, president and CEO of MedAxiom, an American College of Cardiology (ACC) company focused on performance improvement in cardiovascular organizations across the country. Blackwell maintains a clinical practice in the Tri-Cities area encompassing Kingsport, Johnson City, and Bristol in northeastern Tennessee, where penetration of COVID-19 has been relatively low.

“Having said that, the economic carnage has been almost unbelievable,” he told TCTMD, noting that the large health system in which he works, Ballad Health, furloughed about 1,300 employees in April, when there had been only a handful of severe COVID-19 cases and deaths in the region.

“There’s been a tremendous impact on the practice of cardiology, and I will go a step further to say that I believe the impact is indelible, meaning the effects are not going to go away,” he said. “I don’t mean the effects of COVID. COVID will pass and there’ll be other things that come up over the course of years—that’s what happens in medicine. But the response to COVID and how it’s affected the healthcare system will be indelible.”

According to cardiologists interviewed by TCTMD, one adaption that has allowed practices to remain afloat during the pandemic in the face of plummeting revenues and that is likely to have a permanent effect on the field is the nearly overnight shift to telemedicine. This transition was eased by changes in how those types of visits are reimbursed by government and commercial insurers. The Paycheck Protection Program, established by the CARES Act, also provided a lifeline for many. Still, the financial damage was done, and the recovery promises to take much longer than the initial drop.

Counting the ‘Carnage’

A MedAxiom survey of 89 cardiovascular organizations conducted at the end of March, shortly after widespread stay-at-home orders were issued, showed that practices were shifting as much work as possible to the virtual setting and rescheduling imaging and elective procedures, with some furloughing employees or putting them on paid leave. One-fifth said they were closing at least half of their clinics, and even with the move to telemedicine, about one-third said 50% or more of their patient visits had been canceled. One program in New York reported a 90% drop in elective cardiovascular procedures.

What we have seen is very serious—just unbelievably serious—impacts in certain areas of the country from the healthcare effects of COVID, but what we’ve seen throughout the country is the economic carnage. Jerry Blackwell

All programs surveyed expected a significant decline in revenue from all of these moves, particularly in the second quarter of the year. More than half of the organizations (54.1%) predicted that they would see at least a 50% reduction in their revenue. Practices with 20 or fewer physicians were the most pessimistic.

“COVID-19 is proving to have far bigger impact than any of us could have imagined at the beginning,” the report concluded. “Major shifts in delivery models, patient volumes, staffing, and revenue are being seen by every single program across the nation.”

Other data support those assessments. In a survey of all types of medical practices conducted near the beginning of April by the Medical Group Management Association, 97% reported a negative financial impact directly or indirectly related to COVID-19, with an average 55% drop in revenue and a 60% reduction in patient volume since the start of the outbreak. The nonprofit organization Fair Health estimated that cardiology revenues dropped year-over-year by 57% in March and 73% in April. And a survey conducted by the American Medical Group Association (AMGA), a trade group, between May 26 and June 1 showed that across specialties nearly 90% of medical groups and integrated health systems reported a revenue decline of at least 25% during the pandemic, with losses exceeding 50% at 40% of medical groups and 20% of integrated health systems.

While firmer, more-recent numbers for cardiology practices are not yet available, cardiologists and practice administrators speaking with TCTMD provided similar estimates of the financial impact.

“What we have seen is very serious—just unbelievably serious—impacts in certain areas of the country from the healthcare effects of COVID, but what we’ve seen throughout the country is the economic carnage,” Blackwell said.

Varying Levels of Financial Pain

Blackwell said the effects of the pandemic on how cardiovascular organizations function varies according to the type and size of practices provides STEMI call coverage throughout the week. All practices have taken a financial hit, but those operating within a large healthcare system that has investment assets and cash on hand are better able to withstand loss of revenue. Smaller, independent practices, on the other hand, are much more reliant on a steady cash flow—money comes in and it’s immediately used to cover payroll and overhead costs—and are less likely to have big cash reserves. “Those organizations that are smaller and really depend upon cash flow have just really had a devastating effect,” Blackwell said.

As TCTMD learned by contacting physicians around the US, different settings have protected practices and employees by taking a range of defensive steps and actions.

Sheila Sahni, MD, an interventional cardiologist with Sahni Heart Center in Clark, NJ, works in a hybrid model—a private practice with two physicians that is leased by a larger healthcare system, Hackensack Meridian Health. The practice is busy, performing the full gamut of echocardiograms, vascular ultrasounds, and nuclear and simple stress tests. She provides STEMI call coverage throughout the week and also does procedures in the cath lab about twice a week.

Sahni said the practice took about a 50% revenue hit between the middle of March and the beginning of June due to the shutdown of elective procedures and testing, which she termed “a big part of a cardiologist’s revenue.” Because of the leased arrangement, some of the nurses in the practice could be redeployed into the hospital.

Konstantinos Charitakis, MD, also sees a bit of both ends of the spectrum as an interventional cardiologist at the University of Texas Health Science Center at Houston who also maintains an outpatient clinic in a more rural area about 25 miles south of the city. During the initial phase of the pandemic, there was a drop in patient numbers in both settings, and revenues from procedures and outpatient testing fell dramatically. Colleagues around Texas, Charitakis said, were talking about losses of more than 50%.

Ann Honeycutt, MSN, is executive director of Virginia Cardiovascular Specialists, the largest private cardiology practice in the state with 38 cardiologists and nine offices located around Richmond, where most of the hospitals were not overrun with COVID-19 patients. The biggest financial impact was felt from early April to mid-May, largely due to lower numbers of STEMI calls and electrophysiology procedures, she told TCTMD. The practice had a goal of trying to stay within 65% to 70% of the prior year’s charges in order to pay the bills and physician salaries, and by the time virtual visits were going it was able to stay close to 70%. Some staff were furloughed but they were brought back in early May. Others were able to take paid time off.

A lot of what enabled the practice to stay afloat “was the willingness of our physicians and shareholders to basically reinvest back to the practice and our staff to maybe keep as many people employed as possible,” Honeycutt said.

The large, 11-hospital Piedmont Healthcare system in Atlanta suffered a hefty loss when elective procedures were stopped, according to Andrew Klein, MD, an interventional cardiologist at Piedmont Heart Institute. All physicians took about a 15% pay cut for 3 months, with the executive team and CEO taking 20% and 25% cuts, respectively. There were some furloughs, but they were minimal considering the large size of the healthcare system, Klein said.

At Sibley Heart Center Cardiology, a wholly owned subsidiary of Children’s Healthcare of Atlanta with 55 physicians and 21 clinics across Georgia, some locations were closed due to the expected decrease in patient numbers and a transition to more telemedicine, with the consolidation concentrated in metropolitan Atlanta, pediatric cardiologist Dennis Kim, MD, PhD, told TCTMD

That consolidation was stopped at the end of May, and the biggest impact from COVID-19 was seen in the last week of March and the first week of April, when outpatient volumes were down by more than 70%, Kim said. In the cardiac cath lab at Children’s, which Kim directs, volumes were down by about two-thirds at one point in April, although they are now back to normal. In fact, he said, this May was even busier than May 2019. Inpatient cardiac ICU operations were relatively spared. Layoffs and furloughs were minimized by digging into the practice’s reserves, and nearly all of the roughly 225 employees were retained. At the end of the year, the pandemic will likely have reduced overall physician compensation by one-quarter to one-third, Kim predicted.

But, Kim stressed, private practices have felt more of the pain. “I communicate with a lot of the private referring practices around the state and their financial operations obviously have taken a much bigger relative hit,” he said, “and it’s been very difficult for them just to make payroll with the reduction of patients that they’re seeing.”

Telemedicine Keeps Patients Connected and Practices Afloat

The measures needed to allow cardiology practices of all types and sizes to continue operating during the particularly lean months of March, April, and May were varied. They included things like pay cuts, layoffs and furloughs, and deferral of debt and tax payments, but two factors stood above the rest: rapid adoption of telemedicine, helped along by changes to reimbursement so that physicians could be paid comparably for either virtual or in-person visits, and financial support from the government.

In the pre-COVID period, virtual visits were reimbursed at a lower level compared with in-person visits, resulting in them making up a minority of visits for most practices. But, in response to the advocacy of organizations like the ACC, the Centers for Medicare & Medicaid Services (CMS) started making adjustments early on to improve and expand reimbursement for telemedicine, making additional changes at the end of April to bolster use. Commercial payers provided similar modifications.

These adjustments allowed physicians to reach patients by telephone, FaceTime, or Skype, or through dedicated telemedicine platforms like Doxy.me. “The fact of the matter is the changes in reimbursement and the lessening of some of the HIPAA regulations to allow different technologies to accomplish the telemedicine really was a lifeline for patients and the healthcare systems financially,” Blackwell said.

Klein, for one, credited the ability to switch over to virtual visits quickly as critical during the pandemic: “I always say to fellows, you either evolve or you become extinct.”

Likewise, Sahni said “telemedicine was the only way we were able to stay afloat,” allowing the practice to maintain about 90% of normal patient volumes. “Insurance companies and the payers have basically provided relief for physicians by their being compensated equally with a virtual visit as if it were a physical visit,” she observed.

And Gary Ledley, MD, regional director of clinical cardiology services for Tower Health System in southeastern Pennsylvania, who was recruited to start a new cardiology practice just before COVID-19 hit, said telemedicine was very helpful in compensating for the drop in in-person visits. “It’s a new skill that will be very applicable in the future of medicine regardless of COVID,” particularly for patients in rural settings and those with medical conditions that make it difficult for them to leave home, he said.

Many of the changes facilitating the rapid adoption of telemedicine, however, are tied to the federal government’s official public health emergency declaration for COVID-19, which was recently renewed; it’s set to expire toward the end of October if it’s not renewed again. MedAxiom’s Blackwell said there is a major lobbying effort underway with regulators and lawmakers to make the telemedicine changes permanent, and legislation that would do just that has already been introduced in the US House of Representatives.

“When we come out the other side, we’re going to see that there’ll be a shift. There’ll be more in-person visits, elective visits, coming, but there is no way that we’re going to go back to a very low penetration of telemedicine,” Blackwell said. By and large, he added, patients really like the option to connect with their doctor without schlepping to the office.

Indeed, Charitakis said that regardless of patients’ beliefs on the severity of the COVID-19 situation, “they’ve all welcomed telemedicine as a very easy way to communicate with a physician” and will likely push for the option in the future for routine follow-up. Telemedicine is “definitely here to stay,” but it’s not going to replace in-person visits entirely, he added. “We’re cardiologists. We need to listen to the patients’ chests, we need to examine them, we need to see their lower extremities and all that, but for a situation like this, it’s definitely the best we can do.”

Honeycutt said at the peak they were probably doing half of all visits virtually, maintaining patient volumes to between 70% and 90% of normal. The lower number was for new patients because shuttered primary care offices weren’t available for referrals. Telemedicine visits account for about 10% of total visits now that people are starting to go out again, she said.

Some physicians said early on that increased adoption of telemedicine may emerge as one of the positive changes in healthcare delivery that has been triggered by the COVID-19 pandemic allowing physicians to reach more communities.

Luai Tabaza, MD, an interventional cardiologist at Einstein Healthcare Network in Philadelphia, PA, agrees with that stance. “In the long run, telehealth will probably become a bigger portion of what we do, and I think that’s not necessarily a bad thing, especially when we’re talking about patients who have limited or difficult access to healthcare,” he said, adding that it “can be also a good source of revenue once things go back to normal.”

But not everyone agrees. Larry Sobal, MBA, CEO of the Heart and Vascular Institute of Wisconsin, said at his practice, less than 2% of visits are done virtually. “We just have not found our patient population to have a strong appetite for it,” he said, adding that he hopes it remains an option in case the virus situation worsens and they have to ramp it back up.

Government Support Critical

Also key to keeping practices solvent was direct financial support provided by the federal government in the form of the Paycheck Protection Program (PPP), which provides loans that are forgivable if certain criteria for employee retention are met.

“If we had not had the CARES act and some of the PPP support, we probably would have consolidated offices, probably would have laid off and not even just furloughed staff, and some of them we may not have been able to bring back,” Honeycutt said. She added, however, that if stay-at-home orders and prohibitions on elective procedures had lasted longer than they had, “we all would be in trouble.” As it happened, they were able to keep all of their offices open with limited testing and face-to-face visits—having used major resources to get telemedicine capabilities up and running.

Sobal’s practice, which has about 108 total employees, is unique in that it was independent for 40 years before becoming an employed practice in 2011. The group then decided to become independent again in April 2019, requiring the purchase of buildings, equipment, and all other supplies—and the accumulation of related debt. The practice was on a good financial trajectory when COVID-19 shut everything down, pushing patient volumes to about half of prepandemic levels.

“The PPP loan was probably the most significant benefit that we got during the mid-March to say mid-June time period to help us really get back through our low point and keep us stabilized and keep our staff in place,” he said, also mentioning extra bonus payments from Medicare.

The offices remained open, with all necessary precautions taken, to provide patients with a go-to option as hospitals restricted who was allowed on their campuses and to maintain some level of financial stability, Sobal said, adding that telemedicine use increased for a while. The Wisconsin Supreme Court overturned the governor’s stay-at-home order in mid-May, however, and that—coupled with the warmer weather—had patients more interested in coming into the office for delayed appointments. Telemedicine visits have since dropped to a “minuscule” level, he said.

Whether it will turn out to be enough in the long run I think remains to be seen. Larry Sobal

Like many struggling households, Sobal said his practice employed a “tighten-your-belt” strategy to get through the tough period. “It’s asking yourself what can we live without and still sustain a level of service and quality that we want to have,” he said. Some vacant positions were left unfilled and the practice’s benefit plan was restructured to save costs, seen as temporary measures to preserve cash flow.

Asked whether the government’s support has been sufficient, Sobal said it depends on the lasting impact of the pandemic. “Whether it will turn out to be enough in the long run,” he added, “I think remains to be seen.”

Responding to the same question, Blackwell said, “I think it is America at its best and the willingness to entertain creative solutions has been wonderful, but I will also go so far as to say it’s not enough. In other words, because this is going to linger for some time, more is going to need to be done.”

Sahni, too, indicated that additional support will be needed moving forward, especially for those in private practice. “If the expectation is that if a physician reopens, they no longer need financial support, that would be incorrect. . . . It’s very, very expensive to run a private practice,” she said, predicting that some physicians will go into forced retirement and others will look into merging with hospitals or other medical groups.

It looks like more help will be forthcoming, as a new stimulus package, HEALS, is in the works in Congress, but what it will look like in its final form hasn’t been pinned down.

A Slower Rebound

Though the pandemic rages on certain parts of the country, medical practice—along with other aspects of daily life—has started to reemerge from the lockdowns. Elective procedures are being performed again, and doctors are welcoming patients back to their offices. So when can practices expect to see their revenues return to prepandemic levels?

A survey of 59 integrated health systems and independent medical groups conducted at the end of May by the AMGA showed that about 40% predicted it would be at least a year—meaning the second quarter of 2021 or later—before revenues would return to prior levels. Cardiologists and administrators speaking with TCTMD also indicated that the path back to financial stability will be longer than the precipitous fall in mid-March.

Whereas the shutdown was universal, the reopening has been more variable, with reemergence strategies dictated by local COVID-19 situations, Blackwell said. Areas, often rural, where the impact has been small have been able to get up and running quicker compared with some of the harder-hit spots. MedAxiom offers a Cardiovascular Care Reemergence Playbook to help practices navigate through the post-COVID world, he noted.

I think I’d be up a lot at night worrying about it if we were a smaller practice. Ann Honeycutt

In general, Blackwell said, the financial recovery will be measured in months and possibly even up to a year: “The decline was dramatic. The return to normal is going to be much more gradual.”

Several cardiologists expressed concern about the possibility that elective procedures will be shut down again as the country struggles to stem the spread of SARS-CoV-2, particularly if there is a second wave.

To protect against that possibility, Honeycutt said that as her practice continues to recover from the COVID-19-related economic slowdown, “we’re basically putting aside what I would consider a ‘COVID wave two’ reserve, because I’m not going to anticipate the government will be able to help practices like they did the first time.”

Smaller private practices might be on shakier ground, she acknowledged: “I think I’d be up a lot at night worrying about it if we were a smaller practice. . . . I think it’s hard for a smaller practice that has really fixed expenses to have a big revenue drop.”

Kim said that the “rainy day fund” at his practice has been essentially depleted. “If there is a second wave and then we have to undergo a recontraction of our outpatient operations, I think that that might have a significant impact that we were able to somewhat avoid previously.” Realistically, that cushion will not be able to be replenished within the next 18 months, he predicted. “I don’t know the exact time frame but I think that prior to the pandemic we had around, I believe, 35 days in reserve to run the operations of the practice with zero revenue coming in and I think that we’ve pretty much gone through all of that.”

As the reopenings continue, the burgeoning COVID-19 numbers in various parts of the country create a conflict for medical practices. “From a financial side, every healthcare system took a very big hit during that lost time when no elective procedures could be done, and nobody wants to feel that hit again,” Klein noted. “Yet we’re faced with the dilemma of marked rising in the number of cases.”

Since reopening offices, Klein said he has seen a “slight hesitancy” among some patients to come in for a face-to-face visit, partially due to concerns about COVID-19 but also due to demonstrations around racial equality and rioting that have been seen in cities across the country.

To address COVID-related concerns for both patients and staff upon reopening, Sahni said her practice championed the idea of mandatory COVID-19 testing before patients would be allowed into the office. This protocol has come with delays, so visit volumes are not yet back up to 100%. Also contributing to the slower recovery is that diagnostic catheterizations and scheduled procedures are being spaced out on the schedule. For those reasons, in the month of June, revenues were still at only about 70% of normal, Sahni said, predicting that it could be well into 2021 before things are back to normal.

Though his practice was most of the way back in terms of revenue, Sobal said that there is still a percentage of the population that is appropriately choosing to defer care in light of the COVID-19 risk and that the massive job losses—and loss of employer-based health insurance coverage—would weigh on the recovery.

“We really expect probably it’s going to be a slow gradual growth and there’s going to be peaks and valleys, and so we may not expect to see fully 100% to that prepandemic level until possibly even next year,” he said.

Balancing Financial Concerns, Patient Well-being

One of the important issues that needs to be monitored is whether the financial hit imposed by COVID-19 on cardiology practices will ultimately harm patient outcomes. Blackwell said that most practices are expected to survive, but those that don’t are likely to come from areas with vulnerable populations. Thus, he said, there is a risk that the failure of practices could have a negative impact on patients.

Kim said he doesn’t know of any specific instances when patient outcomes were harmed due to restrictions on business operations, but “if that were case, we would actually change our operations in order to protect that even if it meant further financial sacrifice on behalf of our practice.”

For Charitakis, the detrimental impact that a prohibition on elective procedures could have on patient outcomes is more worrisome than the financial impact. Not all procedures deemed elective are the same, he noted. For example, TAVR is generally considered a nonemergent procedure that can be delayed, “but untreated symptomatic severe aortic stenosis has 50% mortality in 1 year,” Charitakis pointed out.

Moving forward, Klein said, it’s important to establish and maintain trust with patients at a time when the public is exposed to politically polarizing and conflicting information on a daily basis. “You have to build that trust. You have to maintain it. If you don’t already have it, build it for new patients and really solidify it for established patients because as we go forward, there’s so many uncertainties,” he stressed. “None of us know what’s going to happen, but I think underscoring that we as a healthcare system are here for the patient to get them better and work together with them to do whatever it takes to make certain that they’re healthy and promote their well-being is critical.”

With the patient perspective in mind, Sahni said she would like to see more advancement in terms of remote ECG technology and services that can go to patients’ homes, noting that some patients have grown hesitant to go to hospitals and doctors’ offices. This will help prepare for a possible future spike in COVID-19 cases, she added.

“The problem is patients feel apprehensive, and we need to learn from the fact that the emergency room became empty,” Sahni said. “Patients are scared to go in, so if we can offer a service where we can provide ambulatory EKG testing, ambulatory COVID testing, or ambulatory Holter monitoring, this is something that’s going to help support testing patients and keeping them with access to care.”

Jordan Safirstein, MD, an interventional cardiologist with Cardiology Consultants of North Morris, a private practice with five locations in northern New Jersey that is aligned with the Atlantic Health System, said he’s not worried that the financial struggles of cardiology practices will have an effect on patient outcomes, particularly in densely populated parts of the country where there are plenty of options. But he cautioned against losing sight of patients as the economy gets going again.

“My number one concern is that we still keep patients safe, that we don’t get so exuberant with our zeal to get back to normal that we forget about the fact that there’s still this risk of people contracting coronavirus and spreading the disease,” he said.

“I don’t want to go back again,” Safirstein continued, referring to the situation during the peak of the outbreak in the New York and New Jersey area. “I don’t want to go to a situation where we can’t see patients in the office anymore. I don’t want to go back to a time when we’re not doing elective cases.”

He said that he understands the desire to get back to normal and bring patients back in, but that it has to be done with the appropriate precautions. “My biggest concern is that we do it safely and we do it appropriately and that the finances don’t take precedence over the patients and their overall health and the overall health of the doctors and the healthcare workers.”