Pandemic Hits Health Care, Psychiatrists With Financial Losses

Nicole Christian-Brathwaite, M.D., counts herself lucky. As the COVID-19 pandemic has ravaged the finances of the health care system across the country, the Massachusetts health plan that covers most of the patients in her private practice agreed to cover telepsychiatry at the same rate as in-person care, so her core salary remains intact.

But many of her patients have lost their jobs, which means they have also lost their insurance, so she instituted a sliding-scale model. Some pay $50 a session, while others have not been able to pay anything. “Obviously, there’s some financial strain on my part,” said Christian-Brathwaite, a child/adolescent and adult psychiatrist. “But people have lost so much that the last thing they need to lose is their psychiatrist.”

Almost every sector of the U.S. health care system has experienced financial loss due to the COVID-19 pandemic, and psychiatrists have not been immune. In many settings in which psychiatrists work—including general and psychiatric hospitals, private practice, university medical centers, and others—they are at risk of incurring a substantial financial loss, explained Robert Trestman, M.D., Ph.D., the chair of APA’s Council on Healthcare Systems and Financing and the chair of the Department of Psychiatry and Behavioral Medicine at Carilion Clinic and the Virginia Tech Carilion School of Medicine.

Financial Issues Impact Various Settings

In a survey of 217 APA members from May 30 to June 10, 73% of respondents reported that they had experienced a financial loss due to COVID-19, and nearly 60% lost between 1% and 30% of their income. Of those respondents who receive an annual salary, 3% reported that they had been furloughed.

In June the American Hospital Association estimated that U.S. hospitals and health systems could lose at least $323.1 billion in revenue in 2020. “And while potentially catastrophic, these projected losses still may underrepresent the full financial losses hospitals will face in 2020,” a news release stated, adding that the analysis does not account for increasing case rates of COVID-19 in some parts of the country or with potential surges in cases later this year.

Psychiatrists who are employed through health systems have likely experienced salary cutbacks, Trestman said. Many have received at least a 5% to 10% salary reduction and some even more.

Additionally, private practices are also likely to take a financial hit during the pandemic, Trestman said. “Most small practices were not designed to have to go through a major change like moving directly from in-person appointments to telepsychiatry,” he explained. Psychiatrists in private practice had to come up with new billing strategies and develop the infrastructure to connect with their patients virtually. Many also had the extra work of pestering health plans to receive proper reimbursement.

Dan Bristow, M.D., is the immediate past president of the Oregon Psychiatric Physicians Association (OPPA). He has been working exclusively in telepsychiatry for the past several years, so the COVID-19 pandemic didn’t change much about his practice. But as president of OPPA, he assisted many psychiatrists in private practice to transition to telepsychiatry.

Overall, Bristow said, most psychiatrists have made the transition quickly and effectively. But he has seen different levels of success in terms of health plans reimbursing psychiatrists as reliably and robustly as they did for in-person care. Oregon enforces telemedicine parity, Bristow said, so in some cases it has simply been a matter of reminding psychiatrists that if they are paneled with an insurance plan that pays for in-person services, that plan is obligated to pay the same for telepsychiatry.

“In states without parity, psychiatrists would probably be significantly impacted financially,” he said. “For people in an independent practice, this is a tremendous burden in a time when everybody is already personally burdened with COVID-19. You have to wear two or three different hats just to keep your practice going.”

Concerns About the Future

Before the pandemic, psychiatric and mental health care in general were already seriously underfunded, Trestman pointed out. Now, experts worry about what the financial climate will mean for mental health care in the future.

“Over the years, society’s stigma of mental illness was reflected in the underfunding of psychiatry, such that it’s unusual in any general hospital for the psychiatry department to break even,” Trestman said. Psychiatry, he said, is structurally not designed for sustainability and must instead be cross-funded by other disciplines.

“For-profit health care systems have even less of a need to focus on psychiatry, and at times like these, they’re very likely to disinvest to reduce their costs,” Trestman said. “Virtually every health care system in the nation has lost an enormous amount of money over the last three months. The money that would have been used to cross-subsidize psychiatry from the generally profitable areas, such as elective surgery, is gone.”

But the current situation also creates an opportunity, Trestman said, to renegotiate appropriate compensation for psychiatry so that it is feasible for health care systems to continue to invest.

He pointed out that these financial issues are occurring while there is a growing need for mental health care. “This is ongoing at a time when we know that substance use disorders are increasing in frequency and intensity, despair is increasing, and access to care is diminishing,” Trestman said.

Additionally, because people have lost their health insurance (see Psychiatric News), many won’t be able to afford the out-of-pocket expense for psychiatric care.

Christian-Brathwaite isn’t certain how long she’ll be able to keep up her temporary sliding-scale model. “I’m trying to figure out, financially, what’s feasible,” she said. Before she started her private practice, she had been part of a larger health system. While she said that it’s still scary not to have a safety net through a salaried job, her practice has allowed her to provide flexibility to her patients that she may not have been able to offer in the past.

“Now, more than ever, people need support, particularly patients of color, who have been challenged with COVID-19 disparities and issues around racism,” she said. “I recognize that it’s an incredible privilege that I’ve been able to work and sustain my family. Many other people, including psychiatrists who have been furloughed, don’t have that option.” ■