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May 5, 2020

Pandemic hammers local healthcare industry revenue

Photo/Lawrence Emerson
Erected on Hospital Hill in Warrenton last month, this sign thanks healthcare workers and first responders on the COVID-19 pandemic’s front lines.
It’s been unimaginable. People tell you to have a disaster plan, in case there’s a hurricane or a tornado.
— Kendall Blaser, physical therapy practice owner
By .(JavaScript must be enabled to view this email address)
Even far removed from the coronavirus pandemic’s worst outbreaks, Fauquier medical businesses, doctors and patients continue to suffer.

Those seeking treatment have waited through the state ban on non-emergency procedures — often in pain and deteriorating health.

The shutdown and “stay-at-home” orders have applied a tourniquet to revenue streams for dentists, family doctors, physical therapists, hospitals and virtually every other component of the healthcare delivery industry.

As a result, paychecks for hundreds of workers stopped in Fauquier’s third-largest employment sector, with an estimated 3,000 jobs.

Fauquier Hospital projected a minimum, 51-percent decline in revenue for April, CEO Chad Melton said. By mid-April, surgeries declined 77 percent, outpatient procedures 72 percent and emergency room volume 52 percent.

Prohibited from conducting “elective surgery” between March 25 and April 30, Blue Ridge Orthopaedic and Spine Center in Warrenton had a backlog of almost 130 operations — including joint replacements, CEO Jeff Hollis said.

Because that probation — and earlier guidance from the American Dental Association and the Virginia Dental Association, Warrenton Dentistry cancelled weeks’ worth of appointments, said Dr. Jamie Childress, a partner in the practice. It will prove difficult to reschedule all those patients to catch up with their care since Dr. Childress, her two fellow dentists and their staff resumed operations on Monday, May 4.

At Blaser Physical Therapy, she continues to keep some patients — such as “79-year-olds with pacemakers” — away because of their health conditions, and others cancel appointments because of fear, owner Kendall Blaser said. Meanwhile, the decline in surgeries results in fewer new therapy patients.

Family practitioners and others face the same circumstances. Generally considered resilient businesses, local medical practices have furloughed employees, dipped into reserve funds and/or applied for the federal Paycheck Protection Program.

They have plenty of company. The Department of Commerce reported that healthcare spending nationwide declined 18 percent on an annualized basis in the first three months of 2020 — with a more dramatic decrease expected for April.

Putting its losses at $3 million a day and $85 million for the month, the University of Virginia Medical Center on April 28 announced it would furlough hundreds of employees and cut pay 20 percent for others. Inova Health, which operates some of Northern Virginia’s largest hospitals, a week earlier announced it would lay off 427 employees. Hospitals large and small across the nation have taken similar action.

Fauquier Hospital early last month furloughed 61 employees — about 9 percent of its workforce, according to Mr. Melton. The hospital also “flexed” employee scheduling, requiring others to use paid leave, and cut administrators’ pay.

Before getting a federal PPP forgivable loan, Ms. Blaser endured sleepless nights, worrying about the future of her physical therapy practice, 15 employees and office building in Warrenton.

“It’s been unimaginable,” she said. “People tell you to have a disaster plan, in case there’s a hurricane or a tornado.”

But, like Blue Ridge and Warrenton Dentistry, Blazer Physical Therapy had no plan for a pandemic.

Ms. Blaser in mid-March gathered her staff on a Sunday afternoon and told them: “We’re staying open, but if you’re not comfortable, no penalty” for staying away.

“The next week, (Gov. Ralph) Northam announced the shutdown; then, every night, I was yelling at the TV.”

Congress and President Trump last month approved stimulus checks of $1,200 for most Americans.

Ms. Blaser recommended her staff use the money “to buy tuna fish, not rib eye steaks . . . .

“Everybody here lives paycheck to paycheck,” she said. “Without it, they don’t pay rent, mortgages . . . . Before they passed the stimulus bill (in early April), the pressure was just enormous.

“I never, never thought I was gonna lose my business. After 24 years, I wasn’t gonna let that happen.”

Before receiving the PPP loan, Ms. Blaser figured her business had enough money for perhaps two payrolls.

At Blue Ridge, the nine surgeons cut their pay in half and that of their 120 employees less dramatically, Mr. Hollis said.

The practice owners decided to avoid furloughs as long as possible, even though patient volume in March and April declined by two-thirds.

“We’re the only orthopedic group in the county, so there’s an obligation to stay open,” Mr. Hollis said last month.

But, the surgeons could do only emergency operations, while continuing to see a fraction of their normal number of patients for evaluation and non-invasive treatment.

Before it received a PPP loan, the practice would have exhausted its funds in a couple of months, Mr. Hollis said.

But, even as hospital operating rooms reopen for “elective” surgeries, nobody expects the patient volume to increase rapidly.

Already intently focused on infection prevention, dentists such as Dr. Childress and her colleagues practice much more slowly as of this week. They schedule more time between appointments for enhanced cleaning and patient separation.

“We will be required to purchase and provide additional Personal Protective Equipment (PPE) for our team,” Dr. Childress said. “Our already-high overhead expenses certainly will increase significantly. Patients will have fear. Our team will have to overcome fear to show up for work each and every day.

“We will put ourselves and our families at risk to care for the oral health needs of our community. We will have at least seven weeks’ worth of cancelled patients to filter into the schedule. We will have patients that have been rescheduled three and four times as the recommendations and mandates were continually changed. We will have patients that cancel their appointments because they still do not feel safe leaving home.”

With COVID-19 cases, hospitalizations and deaths continuing to rise in Virginia, medical businesses — like most other enterprises — will continue to struggle, even as they work toward operating at higher volumes.

“As with other healthcare providers, we’ve been able to adapt to just about everything over the years,” Fauquier Health CEO Melton said. “We’ve always been able to figure it out.”

The hospital did have a pandemic plan in place and conducted drills twice a year to prepare.

Still, “no one is immune to the financial challenges,” Mr. Melton said. “We’re a service industry, too. At the end of the day, any business has to have a bottom line to be successful . . . .

“This is a direct point about why we invest and change for the future. We believe we’re financially positioned well to survive the pandemic.”

But, even as Virginia moves gradually toward “reopening,” Mr. Melton predicted the pain of “downstream effects” will continue for the medical industry.

“This doesn’t exist in the AAAHC (Accreditation Association for Ambulatory Health Care) handbook,” Mr. Hollis said. “It truly is out of left field. This doesn’t happen in America . . . .

“As flat-footed as we have been, we need to learn from this.”

Contact “Lou” Emerson at .(JavaScript must be enabled to view this email address) or 540-270-1845.
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steve1213 · May 13, 2020 at 11:23 am
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Linda Ward · May 7, 2020 at 7:01 pm
FreddieP - I give a BIG shoutout to the delivery people, those stocking grocery store shelves and clerks, the people that run businesses that are thinking on their feet such as curbside take out and delivery, people who have turned their distilleries into places that make hand sanitizers, people home making masks, teachers keeping the kids as up to speed as possible, the EMT and healthcare workers, the sanitary workers, the police, the road crews, the local farmers producing food, the food banks feeding people, the scientists working to find a vaccine and keeping us informed. Without those people our lives would be even more difficult. We thank them ALL from deep within our hearts.
FreddieP · May 7, 2020 at 1:15 pm
It is difficult to comprehend the global impact that this had, literally, no one has managed to avoid it (yes, some have profited from it but they can't be criticised for that if they are offering a much-needed product or service). It is one of those times when you take step back and really appreciate how fragile the human species is and that it doesn't take much (in terms of the fact it's out there i.e. not man-made)) to put us on the back foot in a big way. If this was slightly more aggressive then we could be looking at something even more drastic. I think the sad thing here is that it's not until you have had an issue with your health or you see the role the medical industry is playing during this pandemic that you fully appreciate the role they play in society (the unsung heroes). To think that a chunk of it could be wiped out as a result of this just deepens the health crisis that the world is currently facing.

Freddie P
Linda Ward · May 6, 2020 at 6:17 pm
"various" not varies.
Linda Ward · May 6, 2020 at 6:16 pm
Jim G - I would never bet against America. We lived overseas in varies countries for 10 years, and if anyone thinks we have it bad here right now, I can tell you from personal experience other countries have had it bad for a long time, namely the poor. Not to say what is happening right now is good, this sucks.

In many countries around the world they lack the basic necessities such as clean water (we do too which is nuts), and many deal with totalitarian leadership (Turkmenistan is one such place).

My husband traveled to Haiti to repair a communication system there and he said they drove around dead bodies lying in the street, and no one blinked.

I say if you do choose to not continue to work and retire instead this would be the time for it.
Jim Griffin · May 6, 2020 at 5:56 pm
Many will choose not to work *and* get paid: If in their 60s -- a CV19 high-risk group -- they may retire immediately with social security and may include a pension benefit and a severance package.

Investments will likely be off-peak, but the certainty of retirement packages can obviate concerns over the IRA bottom-line -- not to mention the reality that the account will recover. Never bet against America, it will be back to growth.
Linda Ward · May 6, 2020 at 5:19 pm
jean - Relevant for the low hanging fruit not so much for the fruit at the top. It's a heck of a quandary, go back to work or lose my home, or go back to work and possibly get infected, bring it home and kill myself and my family.

"U.S. companies cut thousands of workers while continuing to reward shareholders during pandemic. Five companies paid a combined $700 million to shareholders while cutting jobs, closing plants."
jean.b.bellegarde · May 6, 2020 at 2:09 pm
Well, if you don't work... you don't get paid.
Linda Ward · May 6, 2020 at 11:32 am
I don't give China a pass on this, but I look at it this way.

Say I was told by people who knew that a very bad flood was coming, and I decided it wasn't a big deal, and didn't plan accordingly or WARN anyone. Now, my whole family, my home, my neighborhood, my country is underwater and sinking fast. Should I take any responsibility for not heeding the warning? You bet ya, any sane person would understand what their lack of action caused.

Not Trump, he takes no responsibility at all. You got what you wanted Trump supporters, dismantling of big government. Bet you didn't think that it also meant dismantling of our entire country.
Linda Ward · May 5, 2020 at 4:57 pm
This is a difficult time in our country, of which most of us haven't ever seen. The only ones that can draw a comparison from the 1918 pandemic are mostly gone. History is not to be ignored. What lesson will we all learn from this? This could be our Great Awakening from years of plenty.
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