The American Medical Association has created a guide outlining considerations for physician practices seeking to reduce labor costs amid the COVID-19 pandemic.
Below are some things for physician practices to think about:
1. Pay cuts for leaders. The owner of the physician practice should consider taking a pay cut, according to the AMA. "Employee morale and loyalty can be negatively impacted if employees are being subjected to furloughs and pay reductions while owners continue to compensate themselves at pre-COVID-19 levels," the AMA said.
2. Redeploying staff to better fit demand. Another option to help manage depleted cash on hand is to redeploy clinical staff, shifting them to a different service or training them on a more in-demand service, such as telemedicine. Redeployed employees can remain on payroll. Some of them can be redeployed to help cut the administrative backlog or work on advance quality improvement initiatives to ensure that the practice is in a good place after the COVID-19 pandemic ends, the AMA said.
3. Implementing furloughs. To help cut costs, physician practices can consider furloughing employees. A furlough, a temporary unpaid leave of absence or temporary layoff, has a set end date. The AMA warns that physician practices should seek legal advice before implementing a furlough because "State laws on unemployment benefits, final paychecks and notice of layoffs vary, and the language used to describe a furlough must be carefully written to avoid accidentally triggering state law requirements that undermine the purposes of the furlough."
4. Long-term effect of layoffs. Organizations that lay off employees may not be eligible for financial relief loans, such as the Paycheck Protection Program. The AMA said that furloughs may leave a physician practice in a better position to operate after the pandemic.
Access the full guide here.