Home » All Great Easy Ways To Save Tax And Good Deductions » Why Are Health Care Providers Forced to Downsize Just When We Need Them Most?

COVID-19 Solutions & Effective Tips


The Greatest Emergency Virus Surviving 10 Steps Guide

Risk Responses COVID-19 Solutions


For Use When Travel FIRST AID KIT


Arts & Entertainment

 Body Art
 Film & Television
 Magic Tricks

Health & Fitness

 Spiritual Health
 Strength Training
 Women's Health
 Dietary Supplements
 Dental Health
 Diets & Weight Loss
 Exercise & Fitness
 Men's Health
 Mental Health
 Sleep and Dreams


 Educational Materials
 Higher Education
 Student Loans
 Test Prep & Study Guides

Home & Garden

 Animal Care & Pets
 Crafts & Hobbies
 Gardening & Horticulture
 How-to & Home Improvements
 Interior Design


 Sign Language


 Developer Tools

Parenting & Families

 Pregnancy & Childbirth
 Special Needs

Politics / Current Events



 Catalogs & Directories
 Consumer Guides
 Gay / Lesbian
 Law & Legal Issues
 The Sciences


 Dating Guides
 Eating Disorders
 Male Dating Guides
 Marriage & Relationships
 Motivational / Transformational
 Personal Finance
 Public Speaking
 Self Defense
 Stress Management
 Time Management

Software & Services

 Anti Adware / Spyware
 Background Investigations
 Developer Tools
 Digital Photos
 Foreign Exchange Investing
 Graphic Design
 Internet Tools
 MP3 & Audio
 Operating Systems
 Other Investment Software
 Personal Finance
 Registry Cleaners
 Reverse Phone Lookup
 Screensavers & Wallpaper
 System Optimization
 Web Design
 3D Printing

Business / Investing

 Careers, Industries & Professions
 Equities & Stocks
 Foreign Exchange
 International Business
 Management & Leadership
 Marketing & Sales
 Personal Finance
 Real Estate
 Small Biz / Entrepreneurship

Spirituality, New Age & Alternative Beliefs



 Extreme Sports
 Individual Sports
 Martial Arts
 Other Team Sports
 Outdoors & Nature
 Racket Sports
 Water Sports
 Winter Sports


 Latin America
 Middle East
 Specialty Travel
 United States

Betting Systems

 Casino Table Games
 Horse Racing

As Seen On TV

 Backyard Living
 Health and Beauty
 Kitchen Tools and Gadgets

Computers / Internet

 Email Services
 Operating Systems
 System Administration
 System Analysis & Design
 Web Hosting
 Web Site Design

Cooking, Food & Wine

 Drinks & Beverages
 Regional & Intl.
 Special Diet
 Special Occasions
 Vegetables / Vegetarian
 Wine Making

E-business & E-marketing

 Affiliate Marketing
 Article Marketing
 Blog Marketing
 Classified Advertising
 E-commerce Operations
 E-zine Strategies
 Email Marketing
 Market Research
 Niche Marketing
 Paid Surveys
 Pay Per Click Advertising
 Social Media Marketing
 Video Marketing

Employment & Jobs

 Cover Letter & Resume Guides
 Job Listings
 Job Search Guides
 Job Skills / Training




 Console Guides & Repairs
 Strategy Guides

Green Products

 Alternative Energy
 Conservation & Efficiency

Why Are Health Care Providers Forced to Downsize Just When We Need Them Most?

Why Are Health Care Providers Forced to Downsize Just When We Need Them Most?

Risk-bearing contracts in health care are designed to move reimbursement away from traditional fee for service by providing a fixed payment per capita or for a population for a given period. The Covid-19 epidemic has exposed the ways these common arrangement threaten health care providers organizations, front line primary care clinicians, and, ultimately, patients.


We’ve made our coronavirus coverage free for all readers. To get all of HBR’s content delivered to your inbox, sign up for the Daily Alert newsletter.

Editor’s Note (4/2): An earlier version of this article and its title stated that Atrius Health was furloughing doctors and nurses. They are not. They are furloughing administrative and medical staff. Doctors have been redeployed. Atrius Health is withholding a percentage of salaries from the higher paid half of its employees, including doctors. We apologize for the error.

I reacted with surprise the other day when Atrius Health, the largest multi-specialty practice group in Massachusetts, and my HMO provider under Medicare Advantage, announced major furloughs of many medical staff members, partial salary withholds for doctors, and a shutdown of a number of its primary care and multi-specialty locations. From a public health perspective, cutbacks and disruptions at an HMO like Atrius Health occur at precisely the wrong time.

How could it make sense for Atrius to do this during the worst public-health crisis since 1918? I believe that the answer can be found in the complicated, dysfunctional way we pay for health care services in this country.

I had read reports from the Atrius CEO saying that only a small portion of the HMO’s revenues come from a traditional fee for service (FFS) reimbursement system. Fully 80 percent of its revenue comes from insurers and government payers who provide a fixed payment per capita (or for a particular patient population) for a given period. This capitation approach (a type of risk-bearing contract) would seemingly ensure that an HMO would not run short of cash during a crisis, at least in the short term. So why, I wondered, would Atrius be facing a cash-flow crunch in the early stages of the Covid-19 epidemic? Its costs, after all, are lower than usual: the hospitals from which it purchases services have essentially eliminated elective surgeries. Even those ICU cases related to the virus are lower cost than much ICU care. Plus, many routine office visits have been postponed or replaced by telehealth. If the payers are paying an annual global fee, why should Atrius be caught short?

I posted that question on Twitter. In response, the company explained: “Right now the issue is cash flow. Revenue is paid FFS with a settlement at the end. And too hard to predict what total medical expenses will look like through the peak and recovery.”

It was news to me that the month-by-month payments to Atrius and others were still based on a fee-for-service model (volume of patients, severity of illness or number of diagnostic and treatment visits) and only “reconciled” with the global payment at the end of the year. What a hodgepodge of incentives and financial outlay! To say that it is neither fish nor fowl gives short shrift to both families in the animal kingdom.

I responded that this arrangement “puts you at risk well beyond the usual health care meaning, including risk of general economic conditions, natural disasters, etc.”

Atrius replied: “Our preference [is] clearly for advance payment but many of the payers, including Medicare, don’t pay that way yet.”

Atrius’s dilemma is just one piece of a much larger problem, of course. In a recent HBR article Sean Nicholson and David Asch noted the inadequacy of the current health care insurance framework in a situation like the Covid-19 epidemic, when overall health care revenues plummet. Arguing that health insurers should direct excess revenues to the front lines to ameliorate this health crisis, they noted:

“Health insurers manage our premium dollars. Private insurers collect premiums from employers, employees, and self-insured workers, and they use that money to pay care providers when they deliver services to us. Medicare and Medicaid likewise collect taxes which they use to pay providers for services delivered to the elderly, disabled, and lower-income individuals. Insurers are the stewards of our money. It isn’t their money.”

How much more so in this case? Who ends up being at risk in this form of risk-bearing contract when we consider a multi-specialty group like Atrius? As we now see, it is the doctors and nurses and allied health professionals. The form of these contracts as they were negotiated is a recipe for devastating financial insecurity for the entire multi-specialty practice. Among all the things that Covid-19 has taught is that the current risk-sharing arrangement is a perversion of finance and purpose, simply a way for payers to shift financial responsibility to those who can least afford it.

Paul F. Levy, former CEO of Beth Israel Deaconess Medical Center in Boston, is Senior Advisor at Lax Sebenius, LLC, a negotiation strategy and capability-building firm.

Why Are Health Care Providers Forced to Downsize Just When We Need Them Most?

Research & References of Why Are Health Care Providers Forced to Downsize Just When We Need Them Most?|A&C Accounting And Tax Services

Leave a comment