In April, the California Medical Association’s (CMA) first COVID-19 Physician Financial Health Survey found widespread concern about the financial health of physician practices. At that time, 95% of practices reported they worried about their financial health due to the COVID-19 public health emergency, with an average revenue decrease of 64%. Now that we are more than six months into the pandemic, CMA conducted a follow-up survey to reevaluate practice viability.

The follow-up survey found that 87% of physician practices are still worried about their financial health. Even with more than 8 out of 10 practices now utilizing telehealth, the average volume of patient visits and practice revenue is still down by one third, with 25% of practices still experiencing a revenue decline of 50% or greater. Surgical specialties are particularly impacted because of their inability to practice via telehealth, with average revenue declines of 41%, compared to 34% for all specialties.

While revenue is down, practice costs have gone up 14%, with practices having to purchase personal protective equipment (PPE), comply with public health disinfecting guidelines, implement telehealth and make other changes due to the pandemic.

While many practices had to temporarily close their offices earlier in the year due to public health guidelines and a lack of accessible PPE, many practices have still not reopened. In several rural regions of California, 60% or more of primary care practices are still closed, putting these practices at risk of permanent closure. Further, 56% of practices statewide report their staffing levels have not returned to normal. In addition to providing vital medical care to patients, physician practices play an important role in local economies, helping to sustain jobs and economic viability during these uncertain times.

CMA's alarming survey findings highlight the impact of six months of sustained financial losses and contradict health plan and insurer claims that patient volume is back to normal. CMA’s data shows that the smaller the physician practice, the greater the revenue decline, which raises serious concerns about further market consolidation.

If policymakers do not take immediate action to help medical practices—particularly independent small and medium-sized practices—California will face a new wave of consolidation that will increase health care costs and decrease patient access to care.

View the complete survey results here.