The inflationary economy and lasting effects of COVID-19 have caused staff and product shortages, a rise in labor costs, and increased patient sensitivity to medication costs.
Over the past year, countries across the globe have reported multi-decade highs in inflation, with the United States recording its highest inflation rate in 40 years.1 The unprecedented rise in inflation is causing financial and economic strain on many households and businesses, resulting in a behavioral shift in consumers across the country. The U.S Bureau of Labor Statistics Consumer Price Index2 reports year-over-year rises in costs for goods such as gasoline (+44%), eggs (+38%), and furniture (+15%),2 to name a few.
Spherix Global Insights sought to uncover just how the current economy was impacting specialty physician practices and patients in its newly released report, Special Topix: Impact of Inflation and COVID-19 on Physician Practices – A Cross Specialty Analysis. This research investigates the economic impact and the continuing effects of COVID-19 on practice patterns and manufacturer interactions, collecting feedback from more than 300 ophthalmologists, dermatologists, gastroenterologists, nephrologists, neurologists and rheumatologists. The study provides valuable insights between specialists, resulting in a comprehensive look into the financial, administrative, and operational struggles practices are currently facing.
Overall, the inflationary environment is negatively impacting practices through increased difficulty retaining and hiring staff and decreased patient visits. According to the Spherix report, more than one-half of specialists noted that their costs for running a practice have increased more than 20% over the past year. Indeed, more than two-thirds note higher costs for office and medical supplies, as well as higher labor costs.
The report noted that rising costs impact patient behavior as they consider their own tightening budgets. Short-term financial decisions that patients are making, such as skipping office visits to save on co-payments and deferring specialist visits, are likely to have long-term implications on their health.
Most surveyed specialists, including ophthalmologists, agree that the economic environment is trickling down and therefore forcing patients to make less healthy decisions like deciding not to take prescription medications as directed. Many note that patients are asking for samples or cheaper alternatives, and they are veering away from prescribing expensive branded options and choosing generics whenever possible.
Often, patients do not see the day-to-day benefits of some drugs and when faced with the rising burden of copays and out-of-pocket expenses, they often push back.
Rheumatologists, dermatologists, and gastroenterologists were most likely to identify biologics overall as the most burdensome to prescribe due to these economic constraints. Some mentioned specific classes of medications, such as JAK inhibitors, IL-6 inhibitors, and IL-23 inhibitors, while others cited specific products that have become increasingly challenging to prescribe, such as Genentech/Roche's Actemra3 and Bristol Myers Squibb's Orencia.4 Neurologists mentioned multiple sclerosis drugs and migraine products as most impacted, citing anti-CGRP products specifically.
Physicians are finding it increasingly difficult to get reimbursement and approval for more expensive branded products as insurance companies also begin to try to control budgets. The reimbursement challenges, when coupled with an already burned out, understaffed, and under-supplied healthcare system, create complications with getting medications to those who need it.
Additionally, COVID-19's effects continue to linger and impact physician offices and their interactions with patients and industry representatives. Telemedicine continues to be pervasive across specialists, however, comfort levels in starting and switching therapies and assessing patients varies substantially by specialty.
The impacts of the inflationary economy, along with lingering effects of COVID-10, are forcing physician offices to continuously adjust the way they operate. There is strong division across practices, with many agreeing that running a practice in this environment is not financially feasible. Furthermore, the current hardships involved with running a medical practice has direct implications on the way physicians can and want to interact with industry.
Spherix's data dives further into the impact and implications by specialty, providing context across the markets to reveal which specialties are being the hardest hit and which are beginning to pivot to survive the current challenging environment.