Financial Implications of COVID-19 on a Tertiary Academic Vascular Surgery Practice

Abstract

The COVID-19 pandemic has had an unprecedented impact on the healthcare system in the United States. The redistribution of resources and suspension of elective procedures and other services has placed a financial stress across all service lines. The financial impact on the practice of vascular surgery has not yet been quantified. This study hypothesized that vascular surgery divisions have experienced losses affecting the hospital and professional side that will not be recoupable without significant productivity increases. Administrative claims data for clinical services performed by the vascular surgery division at a tertiary medical center from March-April 2019 and March-April 2020 were analyzed. These claims were separated into two categories: Hospital claims (Inpatient and Outpatient) and Professional claims (professional reimbursement for all services provided). Medicare reimbursement methodologies were utilized to assign financial value: Diagnosis-Related Group (DRG) for inpatient services, Ambulatory Payment Classification (APC) for outpatient services, and Medicare Physician Fee Schedule (MPFS) for professional reimbursement and work relative value units (wRVU). Reimbursements and productivity (wRVU) were compared between the two time periods. A financial model was created to determine the increase in future productivity over baseline required to mitigate losses incurred during the pandemic. A total of 11,317 vascular surgery claims were reviewed. Hospital reimbursement during the pandemic decreased from $4,982,114 to $2,649,521, -47% (inpatient: $3,505,775 to $2,128,133, -39%; outpatient $1,476,339 to $521,388, -65%) while professional reimbursement decreased from $933,897 to $430,967, -54% when compared to the same time period in 2019. Professional productivity as measured by wRVUs sustained a similar decline from 10478 wRVU to 5386 wRVU, -51%. Modeling sensitivity analyses demonstrated that if a vascular division were able to increase Inpatient and Outpatient revenue, above pre-pandemic levels, by 10%, 5%, or 3%, it would take 9 months, 19 months, or 31 months, respectively, for the hospital to recover pandemic-associated losses. Similarly, professional reimbursement recovery would require 11 months, 20 months, or 36 months for a similar increase in productivity. The COVID-19 pandemic has had a profound and lasting impact on the world in terms of lives lost and financial hardships. The financial impact on a vascular surgery division has resulted in losses ranging from 39% to 65% when compared to pre-pandemic period the previous year. Because complete mitigation of losses is not feasible in the short-term, alternative and novel strategies are needed to financially sustain the vascular division and hospital during a prolonged recovery period.