August 07, 2020 – According to a recent study from McKinsey independent physicians are considering partnerships or joining a health system as a result of financial uncertainty resulting from the COVID-19 pandemic. McKinsey launched a national survey of general and specialty physicians in 2019, which it repeated six weeks into the pandemic. During the first wave of COVID-19, more than half of respondent physicians reported that they were worried about their practices closing.
“The demand shock from COVID-19 is unprecedented, and many physician respondents believe that the resulting loss of revenue will put their practices at financial risk,” McKinsey said.
McKinsey’s survey found that, six weeks into COVID-19:
- 53% of all independent physicians reported that they were worried about their practices surviving the COVID-19 challenge.
- Almost 50% of all independent physician practices said they had less than four weeks of cash on hand, and 68% of those respondents looking for partners ranked financial support as their main reason.
- A third of small independent physicians reported that they believe working for a larger practice may provide greater benefits.
Many independent physicians said that COVID-19 had caused them to consider partnering with a larger entity, selling their practice, or becoming employed.
“The negative financial impact due to COVID-19 indicated by more than half of independent practicesmay lead to a new wave of partnerships and consolidation. However, physician respondents stated that they are looking to gain financial security and operational support without losing too much of their autonomy.
“Health systems may be looking to increase patient access through an adequate network. Both are committed to providing high-quality, high-value care. As consolidation and partnerships occur, patients could gain greater access to digital care, newer facilities, COVID-19 testing, and social worker support through their physicians’ employment,” McKinsey said in the report.
“As health systems explore the next chapter of physician acquisition, our research in the healthcare sectors suggests all parties should deepen their understanding of physicians’ needs,” McKinsey concluded. “Clear communication between health systems and physicians on the expectations and benefits of alignment, including the implications for physicians, their teams, and their patients, will be important considerations in building longer-term successful relationships.”
