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Analysis

Vancouver Clinic CEO Says Multispecialty Group Faces 'Uphill Battle' Against COVID-19

By Jack O'Brien  
   May 02, 2020

Mark Mantei said he expects his organization's April loss to be between $10 million to $15 million.

Just like hospitals and health systems, physician groups have sustained significant clinical and financial damage as a result of the coronavirus disease 2019 (COVID-19) pandemic.

In mid-April, a Medical Group Management Association (MGMA) survey found that nearly all physician practices have experienced a negative financial impact from the coronavirus outbreak.

Related: 97% of Physician Practices Take COVID-19 Financial Hit

Mark Mantei, CEO of the Vancouver Clinic, a multispecialty clinic based in Vancouver, Washington, told HealthLeaders that the ongoing COVID-19 outbreak has been "devastating" for the organization since it shut down non-urgent care services on March 17.

According to Mantei, visit volumes have dropped over 70%, though Vancouver Clinic has seen an uptick in its obstetrician department, its pulmonary department, and its urgent care facilities. Still, Mantei conceded that while Vancouver Clinic has worked to mitigate the effects of pandemic, it has been "an uphill battle."

"We're an independent, for-profit group that's trying to do the right thing, but the losses are pretty significant," Mantei said. "In the month of March, our losses were over $3.5 million and in April, we expect the losses to be between $10 million to $15 million."

Related: 5 Vital Business Signs for Medical Groups

Mantei said that while Vancouver Clinic has been able to draw on some available cash reserves, the organization will "be really hurting" if the financial situation regarding the outbreak does not improve by mid-May to early-June.

Vancouver Clinic has already furloughed 400 workers and doctors have taken pay cuts to maintain the organization's financial viability.

Related: CareMount Leads on Value-Based Care Strategies With an Eye on Physician Compensation

Through two legislative packages, the $2.2 trillion Coronavirus Aid, Relief, and Economic Security (CARES) Act and a nearly $500 billion emergency relief bill, the federal government has aimed to boost hospitals and health systems with more than $170 billion in funding.

However, provider organizations are still reeling and could potentially require a third economic stimulus package to make up for lost revenues related to the cost of treating patients infected with COVID-19 and the temporary cancellation of elective surgeries.

According to an American Medical Group Association (AMGA) survey released in mid-April, two-thirds of integrated health system leaders said the payments distributed by the CARES Act will only account for less than a week of revenues.

In the same survey, AMGA estimated that health systems will require as much as $318 billion in additional funding to replace half of the projected revenue losses in the next four months.

Related: Two-Thirds of Health Systems Report CARES Act Payments Cover Less Than a Week of Revenues

Looking forward, Mantei said he expects Vancouver Clinic to alter its operations considering the pandemic and adapt to changes in care delivery, specifically mentioning the rise of telehealth services.

Mantei also said he thinks that the outbreak will accelerate the organization's shift towards value-based care models.

"For our group, I can tell you that I think it's going to accelerate our move to more of a global capitation reimbursement system," Mantei said. "Folks that have some of that [capitation] are still cash flowing fairly well... I think we'll see this [pandemic] accelerate that move to [value-based care] and groups like ours taking on more risk for patient care on the financial side."

Additionally, Mantei said that until there is an effective vaccine available to combat the coronavirus, Vancouver Clinic will plan on deploying infection control practices, such as staggering hours for surgical procedures and testing patients before appointments.

Jack O'Brien is the finance editor at HealthLeaders, a Simplify Compliance brand.


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