Medical Groups and Integrated Health Systems Still Experiencing Significant Revenue Losses; Many Providers Forecast at Least a Year Until Revenues Return to Pre-COVID Levels

Alexandria, VA – Nearly 90% of medical groups and integrated health systems report that their revenue has declined by 25% or more during the COVID-19 pandemic, with nearly 40% of medical groups and 20% of integrated health systems saying monthly revenue losses have exceeded 50%. These findings, from recent surveys conducted by AMGA, highlight the urgent need for Congress to provide more financial assistance to our nation’s healthcare providers.

The CARES Act, signed into law on March 27, provided $100 billion in relief to healthcare providers. The HEROES Act, approved by the House of Representatives on May 15, included an additional $100 billion for the Provider Relieve Fund. In a letter to Senate leadership last week, AMGA asked Congress to continue funding the Provider Relief Fund in future legislative packages. Despite this relief, these survey findings demonstrate that more immediate assistance is needed if medical groups and integrated health systems are to continue meeting the needs of patients—both during and after the pandemic.

“Health systems and medical groups are operating under a cloud of financial uncertainty that threatens their ability to continue to deliver the best care to their communities,” said AMGA President and CEO Jerry Penso, M.D., M.B.A. “We continue to urge Congress to provide additional funding to stabilize the front lines of the COVID-19 crisis.”

The 95 respondents to the AMGA surveys included leaders from 59 of the nation’s preeminent integrated health systems and 36 independent medical groups. The surveys were conducted May 26 – June 1.

Among the surveys’ other key findings:

• 41% of healthcare systems and 36% of medical groups are forecasting it will be at least a year  (Q2 of 2021 or later) before revenues return to pre-COVID levels
• Nearly 23% of healthcare systems and 28% of medical groups said it’s still unknown when their revenues will return to normal
• Healthcare systems and medical groups anticipate increasing expenses compared to pre-COVID:
  • 92% of healthcare systems and 97% of medical groups expect an increase in personal protective equipment (PPE) expenses 
  • 87% of healthcare systems and 91% of medical groups expect increases in telehealth infrastructure costs 

The lost revenue is largely the result of medical groups and integrated systems eliminating non-essential surgeries and procedures. While providers are seeing some of this revenue return as elective procedures resume and patients begin scheduling appointments, providers are still facing an uncertain financial future amid a number of changing variables, including the potential for a resurgence in COVID-19 cases.   In addition, providers face risks to obtaining adequate reimbursement for care provided, primarily due to variations in telehealth reimbursement and potential insurance coverage lapses caused by unemployment.

“The financial risks are real, and we have heard that several groups have already run through their reserves,” Penso said. “This pandemic has changed the expense makeup for providers, who now are funding new PPE and telehealth infrastructure costs while simultaneously dealing with significant revenue losses.”

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About AMGA
 AMGA is a trade association leading the transformation of health care in America. Representing multispecialty medical groups and integrated systems of care, we advocate, educate, innovate, and empower our members to deliver the next level of high performance health. AMGA is the national voice promoting awareness of our members’ recognized excellence in the delivery of coordinated, high-quality, high-value care. More than 175,000 physicians practice in our member organizations, delivering care to one in three Americans.