Small businesses are a vital part of our economy. They are ubiquitous and take on numerous forms, including traditional brick and mortar spaces, kiosks, and online enterprises. They enhance our most basic capitalist principles, such as innovation, entrepreneurship, and competition. Many small business owners give of their hearts and souls, viewing their employees and customers as family. When the COVID-19 pandemic hit and with it the necessary sweeping measures of social distancing and mandatory closures, many small businesses were hit hard.
Enter the Coronavirus Aid, Relief, and Economic Security (CARES) Act, a timely assist from the federal government aimed at helping small businesses weather the economic downturn due to the pandemic. The details are still being finalized as they are modified almost daily, but the CARES Act will help eligible businesses financially via loans. In addition, the borrower may be eligible to convert the loan to a grant and avoid loan repayment. This is a huge step towards stabilizing our economy with the implication of small businesses being its backbone.
Taking a quick trip around the internet the last couple of weeks shows you the efforts being made to support local businesses: promotions to help restaurants, delivery and drive through groceries, purchasing gift cards to local stores that have had to abruptly shutter. I would like to add another category to your list of favorite small businesses that should garner support: your local medical and dental practices.
Take another look at that last paragraph: Did you realize that your local doctor or dentist is actually a small business owner? When our world changed seemingly overnight almost a month ago now, we were faced with the same concerns: How will we pay rent? Pay overhead? How will we be able to care for our employees and avoid interruptions in their paychecks? The difference is we also have some unique concerns: How will we be able to care for our patients — both current patients, those who are chronically ill and under care, and prospective patients, those who may become ill and need an evaluation?
The national conversation in regard to physician practices (and their dental colleagues) has not always been favorable, unfortunately — largely centered on how providers are at fault for rising health care costs and are not doing enough to reverse course. The reality, however, is that much like retail small business counterparts, we have similar challenges: making payroll, rising overhead costs, almost constant negotiations with suppliers (in this case, both supply chain and insurers for payment/reimbursement). Thankfully some private practices may find themselves eligible for the newly approved SBA/CARES Act loans, allowing them to keep the lights on and the staff well cared for so that they can, in turn, continue to tend to their patients. Unfortunately, this may not apply to all private practices as they are categorized as businesses that are medical in nature and may not completely fall under the Small Business Administration.
Much akin to other small businesses, the uphill battle has left us vulnerable to takeovers by larger entities such as multi-specialty groups, hospitals, and private equity investors. When the costs soar, and the practice shows signs of faltering, private practices are often bought out by a larger entity similar to how a large corporation may acquire smaller local stores to consolidate their footprint. At times this consolidation works out well: A primary care clinic offering excellent clinical care within their community but uninterested in the dealings of administrative office infrastructure may benefit under the centralized administrative umbrella of a larger organization. A specialty practice that provides a type of care not already featured in the larger group may enhance the larger entity’s varied medical offerings for their patients.
The concern though is this: What happens when all the private practices are gone? Big box stores are great, but if there were no small stores to provide competition, who would innovate? Where would you go if you wanted something special, different, or customized? What about personalized service? These tend to be the hallmarks of small businesses in contrast to their large corporate competitors. The same concern applies if private practice were to be completely consolidated. Would patients receive the same level of personalized care without private practice medicine? Would insurance companies preferentially reimburse a larger group so that all patients were covered well and the providers and their staff compensated, or would the lack of competition tip the scales and allow for more aggressive down negotiating tactics from the insurers?
Thoughts to consider, for sure. As it stands now, I am eagerly awaiting more details in the coming days regarding the CARES Act and hoping that my practice is eligible for support — for my patients, my staff, and my colleagues. I know that in the current climate, we are all trying to do our part, stay healthy, and support the economy. I would encourage you to support your local small businesses since they are the lifeblood of the community, and to remember that your local medical and dental offices are small businesses too: We are here, we are still working diligently, and we are eager to help.
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