by Brenée Goforth
Media Manager & Communications Associate, John Locke Foundation
Jordan Roberts wrote a two-part series this week on the impact COVID-19 has had on the supply and demand of health care. In part one, Roberts discussed how this affected hospitals. But it has not just affected hospitals, COVID-19 has severely affected non-hospital providers even more. In part two, Roberts writes:
[H]ospitals aren’t the only health care providers affected by supply and demand shocks of the COVID-19 pandemic. Non-hospital providers such a primary care doctors, dermatologists, and orthopedists were negatively impacted as well. Like hospitals, these providers were hit by supply and demand shocks, which are likely to have lasting impacts on the future operation of these practices.
Roberts references data collected by FAIR Health to illustrate the toll coronavirus has taken on non-hospital providers of health care. Utilizations of medical services across all specialties were down 68% in April compared to last year. Primary care for adults has taken one of the biggest hits. Roberts compares pediatric and adult primary care reductions:
Utilization and revenue among pediatric primary care by month, 2020 vs. 2019 – Compared to 2019, utilization of pediatric primary care nationwide decreased by 52% and 58% in March and April, respectively. Revenue among pediatric primary care decreased by 32% and 35% in March and April, respectively.
Utilization and revenue among adult primary care by month, 2020 vs. 2019 – Compared to 2019, utilization of adult primary care nationwide decreased by 73% and 77% in March and April, respectively. Revenue among adult primary care decreased by 75% and 80% in March and April, respectively.
Just as he suspects for hospitals, Roberts predicts this downward trajectory in non-hospital services will lead to mergers. Roberts writes:
Decreased utilization and revenue during March and April have similar implications for specialty care as they do for hospitals. As practices lose revenue, larger hospital systems will attempt to acquire these specialty practices. Financial incentives exist for hospital systems to have as many specialists in their referral network. This is one reason why prices tend to rise following mergers and acquisitions among provider practices.