To the Editor: In addition to life losses and health care system collapse, the COVID-19 pandemic caused a profound economic impact. Social distancing and isolation were advised as preventative measures to limit COVID-19 spread but caused worldwide economic slowdown. In the United States, the major outbreak in March 2020 prompted the government to declare a national state of emergency, which came with substantial economic detriment.1 Many dermatologists had to close their practices to reduce the risk of transmission, a rational decision from a public health standpoint but financially devastating. In response, the US Congress passed the Paycheck Protection Program (PPP) to provide financial support for small businesses, including dermatology practices.2
We analyzed the economic impact of COVID-19 on dermatology practice by identifying practices that benefited from the PPP. We identified 1066 dermatology practices that received loans of $0.15 million or greater, representing 5% of medical practices included in this program. The number of dermatologists who benefited from this program was 3719, representing 19.7% of all dermatologists. The majority of loans went to corporations, limited liability companies (LLCs), and subchapters. More than 75% of the loans benefited practices located in the US Southeast, Northeast, and West regions. More than 80% of the loans went to practices with 5 or fewer physicians and 49 or fewer employees (Table I ).
Table I.
Characteristics of loan recipients
| Characteristics | n | % |
|---|---|---|
| Business type | ||
| Corporation | 404 | 37.9 |
| Limited liability company | 281 | 26.4 |
| Subchapter corporation | 276 | 25.9 |
| Professional association | 42 | 3.9 |
| Partnership | 31 | 2.9 |
| Sole proprietor | 16 | 1.5 |
| Limited liability partnership | 11 | 1 |
| Cooperative | 3 | 0.3 |
| Nonprofit organization | 2 | 0.2 |
| US geographic region | ||
| Southeast | 347 | 32.6 |
| Northeast | 236 | 22.1 |
| West | 220 | 20.6 |
| Midwest | 152 | 14.3 |
| Southwest | 111 | 10.4 |
| Race | ||
| White | 94 | 8.8 |
| Asian | 16 | 1.5 |
| Black | 1 | 0.1 |
| Hispanic | 8 | 0.8 |
| American Indian or Alaska Native | 1 | 0.1 |
| Unanswered | 946 | 88.7 |
| Sex | ||
| Female | 83 | 7.8 |
| Male | 180 | 16.9 |
| Unanswered | 803 | 75.3 |
| Number of medical providers in practice | ||
| 1 | 327 | 30.7 |
| 2-5 | 566 | 53.1 |
| 6-10 | 135 | 12.7 |
| >10 | 38 | 3.6 |
| Jobs retained | ||
| <10 | 116 | 11.7 |
| 10-49 | 708 | 71.4 |
| 50-250 | 160 | 16.1 |
| >250 | 7 | 0.7 |
The majority of loans were $0.35 million or less, and more than 90% were less than $1 million. The loans of $2 million and more exclusively benefited LLCs, corporations, and subchapter corporations. Sole proprietor businesses received loans of only $0.35 million or less. More than 50% of the loans of $1 million to $5 million went to the US Southeast and Southwest regions (Table II ). Spearman rank correlation coefficients were 0.49 and 0.45, respectively, for the number of physician providers and jobs retained in practice and the loan range, which shows a positive correlation.
Table II.
Loan distribution, n (%)
| Loan range | $5-$10 million | $2-$5 million | $1-$2 million | $0.35-$1 million | $0.15-$0.35 million | P value (chi-square test) |
|---|---|---|---|---|---|---|
| Total | 1 (0.09) | 11 (1.03) | 43 (4.03) | 345 (32.36) | 666 (62.48) | |
| Business type | .1339 | |||||
| Limited liability company | 1 (100) | 3 (27.3) | 9 (20.9) | 75 (21.7) | 193 (28.9) | |
| Corporation | — | 6 (54.5) | 19 (44.2) | 145 (42) | 234 (35.1) | |
| Professional association | — | — | 3 (7) | 17 (4.9) | 22 (3.3) | |
| Partnership | — | — | 2 (4.7) | 11 (3.2) | 18 (2.7) | |
| Sole proprietor | — | — | — | — | 16 (2.4) | |
| Subchapter corporation | — | 2 (18.2) | 9 (20.9) | 91 (26.4) | 174 (26.1) | |
| Limited liability partnership | — | — | — | 6 (1.7) | 5 (0.8) | |
| Cooperative | — | — | — | — | 3 (0.5) | |
| Nonprofit organization | — | — | 1 (2.3) | — | 1 (0.2) | |
| US geographic region | .4552 | |||||
| Southeast | — | 5 (45.5) | 19 (44.2) | 112 (32.5) | 211 (31.7) | |
| West | 1 (100) | 1 (9) | 4 (9.3) | 64 (18.5) | 150 (22.5) | |
| Northeast | — | — | 11 (25.6) | 81 (23.5) | 144 (21.6) | |
| Midwest | — | 2 (18.2) | 6 (13.9) | 54 (15.6) | 90 (13.5) | |
| Southwest | — | 3 (27.3) | 3 (7) | 34 (9.9) | 71 (10.7) | |
| Number of medical providers in practice | <2.2e-16 | |||||
| 1 | — | 1 (9.1) | — | 48 (13.9) | 278 (41.7) | |
| 2-5 | — | — | 5 (11.6) | 194 (56.2) | 367 (55.1) | |
| 6-10 | — | 2 (18.2) | 19 (44.2) | 93 (26.9) | 21 (3.2) | |
| >10 | 1 (100) | 8 (72.7) | 19 (44.2) | 10 (3) | — | |
| Jobs retained | <2.2e-16 | |||||
| <10 (micro) | — | 2 (18.2) | 4 (9.3) | 30 (8.7) | 80 (12) | |
| 10-49 (small) | — | 1 (2.3) | 176 (33) | 531 (79.7) | ||
| 50-249 (medium) | — | 6 (54.5) | 36 (83.7) | 114 (51) | 4 (0.6) | |
| >250 (large) | 1 (100) | 3 (27.3) | — | 2 (0.6) | 1 (0.2) | |
| Unanswered | — | — | 2 (4.7) | 23 (6.7) | 50 (7.5) | |
In dermatology, a significant decrease of outpatients was registered during the pandemic.3 This may be explained by the nonemergent character of most outpatient visits, which led to a significant drop in dermatologists’ activity and, therefore, income. The necessity of close contact during dermatologic inspection also may have discouraged patients from seeking care.
Most loan recipients were corporations, LLCs, and subchapters, which may reflect the distribution of health care organizations business structures. The geographic distribution of loans mostly in the US East and West regions may be explained by the presence of major cities with greater numbers of practices. Another factor could be the stay-at-home order that was issued in all US West and East states, whereas it was not or was partially issued in states of the US Midwest and Southwest regions.4 Loans of $1 million and greater were surprisingly less distributed in the US West and Northeast. To support this finding, economic analysts noted that banks in major areas like New York City prioritized large food service companies to the detriment of smaller businesses like health care organizations.5 Most of loan beneficiaries were small practices, which is consistent with the distribution of dermatology practices by size. Another factor to consider is that solo and small medical practices were disproportionally affected because of lack of financial resources to guarantee sustainability.
Conflicts of interest
None disclosed.
Footnotes
Funding sources: None.
IRB approval status: Not applicable.
Reprints not available from the authors.
References
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- 2.CARES Act, S.3548, 116th Congress. 2020. https://www.congress.gov/bill/116th-congress/senate-bill/3548/text Available at:
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