Category Archives: Hospital Industry

The Treacherous Transition Awaiting Millions Losing Their Medicaid

Posted on by • Posted in ACA, Administrative Churn, Health Insurance Coverage Adequacy, Health Policy, Health System, Hospital, Hospital Industry, Medicaid, Medicaid Expansion, Medicaid Redeterminations, Uncompensated Care, Underinsured, Uninsured • Leave a comment
The Treacherous Transition Awaiting Millions Losing Their Medicaid

We dig into three research papers to make sense of what will happen to 15 million people set to lose their Medicaid over the next year.

Listen to the full episode below, read the transcript or scroll down for more information.

 If you want more deep dives into health policy research, check out our Research Corner and subscribe to our weekly newsletters.

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Researchers estimate 15 million people will lose their Medicaid starting April 1 when states begin removing people from the low-income health insurance program for the first time in three years.

In March 2020, Congress banned states from removing people from Medicaid during the pandemic in exchange for more federal funding for state Medicaid programs. Medicaid enrollment is usually tied to people’s incomes, and individuals normally have to regularly prove they still qualify in what’s known as a redetermination. (In the 39 states and Washington, D.C., that have expanded Medicaid, a family of four has to make less than $40,000 to qualify. In non-expansion states, the cutoff is even lower.)

With redeterminations paused, Medicaid enrollment nationwide has grown from 71 million in February 2020 to an estimated 95 million in March 2023. Research shows Medicaid coverage is associated with better access to care, more financial security, better health and lower mortality. During the pandemic, beneficiaries have been able to enjoy these benefits without worrying about confirming their eligibility.

In December, Congress voted to let states restart the process of clearing their rolls on April 1, what’s sometimes referred to as “unwinding.” Lawmakers are giving states 14 months to redetermine millions of people’s eligibility — an unprecedented task made even more difficult by serious staffing and experience shortages in many Medicaid offices.

“It’s going to be a big lift,” said Sayeh Nikpay, a health policy researcher at the University of Minnesota and Tradeoffs Senior Research Advisor. “States have never had to do this many redeterminations this quickly before, and there’s a lot of uncertainty about what will happen.”

We asked Nikpay to pick out a few relevant studies to help us understand what is happening and how states and employers could keep more people insured. Here are three she identified as particularly helpful.

Two types of people will lose coverage

The Office of the Assistant Secretary for Planning and Evaluation, which provides research for the U.S. Department of Health and Human Services, released a report in August 2022 that estimated 15 million people will lose Medicaid coverage as a result of the unwinding. (The estimate is similar to another analysis by the independent Urban Institute.)

ASPE breaks those 15 million people into two groups. In the first group are people who make too much money to qualify for Medicaid. ASPE estimates there are about 8 million people in that category, and they should be able to get insurance through work or the Obamacare exchanges.

In the second group are roughly 7 million people ASPE estimates are still eligible but will lose coverage because of what’s called “administrative churn.” This can happen if the Medicaid office can’t get in touch with someone to confirm their eligibility because they’ve moved or changed their phone number or if they’re unable to make an in-person appointment because of work or child care responsibilities. (The Urban Institute projects about 4 million people will be in this group.)

These two groups represent a key tension to the unwinding process: States want to shed people who make too much money, but officials also know eligible people often lose coverage during redeterminations, and that danger is heightened given the scale and speed of this process.

Making the switch from Medicaid to private insurance

This next paper looks at the first group: the roughly 8 million people expected to move from Medicaid to private coverage, and specifically the roughly 4 million who are expected to get coverage through the Obamacare exchanges. Adrianna McIntyre, an assistant professor of health policy at Harvard, wrote in JAMA Health Forum in October 2022 about the most effective ways to move people from Medicaid onto private Obamacare plans.

There’s limited data on this, but based on the few studies available, McIntyre found that only 3 to 5 percent of people who leave Medicaid end up getting an Obamacare plan. Many policymakers are relying on the Obamacare exchanges to provide a life preserver to millions of people losing Medicaid coverage, but the research cited by McIntyre shows getting people into these plans is not guaranteed and will take focused effort by states.

McIntyre’s review cites several randomized controlled trials where states tested different ways of increasing enrollment in Obamacare plans. These studies found simple reminders from the state – like physical letters, emails and phone calls help – boost sign-ups anywhere from 7 to 16 percent.

But what really seems to make a difference is reminders plus connecting people to someone who can get them signed up while they are on the phone. In one of those trials published in 2022, people in California who got a reminder email and a call connecting them to enrollment assistance were almost 50% more likely to sign up for a plan. Such extra effort is obviously costly, and it may not be a priority or financially feasible for some states.

McIntyre’s review did not include any research on what employers can do to help their workers transition from Medicaid to work-based coverage, but based on the studies McIntyre cited, Nikpay said she thinks it’s a good idea for employers to make sure people know Medicaid could be going away and provide as much help as possible in getting new coverage.

Making it easier to stay on Medicaid can have other benefits

The final study looks at the second group of people expected to lose Medicaid coverage: the 7 million people who may lose coverage due to administrative churn even though they are still eligible. 

Some states have tried to limit that churn, and researchers at the RAND Corporation evaluated New York’s effort. Starting in 2014, New York allowed people to stay on Medicaid without any redeterminations for 12 months once enrolled. 

In addition to keeping more people on Medicaid for longer, researchers found that after this policy was in place, hospital admissions and monthly costs per beneficiary went down. The researchers can’t say whether the continuous enrollment policy directly caused these improved outcomes, but the findings suggest that avoiding administrative churn can help people stay covered without ballooning costs.

“It seems reasonable to me,” Nikpay said of the findings, “that making it easier to stay on Medicaid, even outside of a global pandemic, could benefit people’s health given what we know about how Medicaid affects people.”

Irresponsible rhetoric should not drive public policy

Posted on by • Posted in American Hospital Association (AHA), Credit Quality, Credit Ratings, Financial Distress, Financial Performance, Financial Stewardship, Financial Viability, Financially Distressed, Health Policy, Health System, Hospital, Hospital Industry, Lobbyist, MedPAC • Leave a comment

https://www.aha.org/news/blog/2023-03-29-blog-irresponsible-rhetoric-should-not-drive-public-policy

The AHA has previously noted the third party observers who demonstrate a tenuous grasp of the data and rules regarding federal hospital transparency requirements. Now, some of those same entities with deep pockets and an apparent vendetta against hospitals and health systems have turned their attention toward the broader financial challenges facing the field. The results, as described in a recent Health Affairs blog, are as expected — a complete misunderstanding of current economic realities.

The three most egregious suggestions in this piece are that hospitals are seeking some kind of bailout from the federal government, employers and patients; that investment losses are the most problematic aspect of hospital financing; and that hospitals’ analyses of their financial situation are dishonest.

We debunk these in turn.

Hospitals are seeking fair compensation, not a government bailout. The authors state that hospitals are asking “constituents to foot the bill for hospitals’ investment losses.” This is patently false. Indeed, if you read the request we made to Congress cited in their blog, hospitals and health systems are simply asking to get paid for the care they deliver or to lower unnecessary administrative costs. This includes asking Medicare to pay for the days hospitals care for patients who are otherwise ready for discharge. Increasingly, this has occurred because there is no space in the next site of care or the patient’s insurer has delayed the authorization for that care. Keeping someone in a hospital bed for days, if not weeks, requires skilled labor, supplies and basic infrastructure costs. This doesn’t even account for the impact on a patient’s health for not being in the most appropriate care setting. Today, hospitals are not paid for these days. Asking for fair compensation is not a bailout; it is a basic responsibility of any purchaser.

While investment income may be down, hospitals and health systems have faced massive expense increases in the last year. The authors note that patient care revenue was up “by just below 1 percent in relative terms from 2021 to 2022,” suggesting that implies a positive financial trend. However, hospital total expenses were up 7% in 2022 over 2021, and were up by even more, 20%, when compared to pre-pandemic levels, according to Kaufman Hall. And it’s not just the AHA and Kaufman Hall saying this either: in its 2023 outlook, credit rating agency Moody’s noted that “margins will remain constrained by high expenses.” Hospitals should not need to rely on investment income for operations. However, many have been forced into this situation by substantial underpayments from their largest payers (Medicare and Medicaid), which even the Medicare Payment Advisory Commission (MedPAC), an independent advisor to Congress, has acknowledged. MedPAC’s most recent report showed a negative 8.3% Medicare operating margin. Hospitals and health systems are experiencing run-away increases in the supplies, labor and technology needed to care for patients. At the same time, commercial insurance companies are increasing their use of policies that can cause dangerous delays in care for patients, result in undue burden on health care providers and add billions of dollars in unnecessary costs to the health care system.

Hospitals and health systems are committed to an honest examination of the facts. The authors imply that the studies documenting hospitals’ financial distress are biased. They note that certain studies conducted by Kaufman Hall are based on proprietary data and therefore “challenging to draw general inferences.” They then go on to cherry-pick metrics from specific non-profit health care systems voluntarily released financial disclosures to make general claims about “the primary driver of hospitals’ financial strain.” The authors and their financial backers clearly seem to have a preconceived narrative, and ignore all the other realities that hospital and health system leaders are confronting every day to ensure access to care and programs for the patients and communities they serve.

It is imperative to acknowledge financial challenges facing hospitals and health systems today. Too much is at stake for the patients and communities that depend upon hospitals and health systems to be there, ready to care.

Sharing an Almost Unique Perspective — Putting the Hospital Out of Business

Posted on by • Posted in Credit Quality, Credit Ratings, Disruption, Disruptive Technology, Financial Distress, Financial Performance, Financial Stewardship, Financial Viability, Financially Distressed, Health System, Hospital, Hospital Industry, Leadership, Lobbyist, Medical Debt, Medical Errors, Monopoly, Operating Margin, Operating Metrics, Outcomes, Outcomes Appropriate, Patient Experience, Patient Outcomes, Patient Safety, Patient Satisfaction, Physician Employment, Physician Independence, Prevention, Preventive Screening, Retail Clinic, Retail Healthcare, Retail Pharmacy, Status Quo, Transformation, Transformational Change • Leave a comment
https://mcusercontent.com/8a4bf5d1617f86a90e5a909f0/files/be02ef16-d63d-a4c0-38c5-218a882a0315/4sightHealth.HealthcareRevolutionPart1.Wiess.3_28_23.01.pdf?utm_source=4sight+Health+Readers&utm_campaign=19c96fa31f-CMS+Misdirection_COPY_01&utm_medium=email&utm_term=0_96b6d85309-19c96fa31f-147498402

I have been both a frontline officer and a staff officer at
a health system. I started a solo practice in 1977 and
cared for my rheumatology, internal medicine and
geriatrics patients in inpatient and outpatient settings.
After 23 years in my solo practice, I served 18 years as
President and CEO of a profitable, CMS 5-star, 715-bed,
two-hospital healthcare system.


From 2015 to 2020, our health system team added
0.6 years of healthy life expectancy for 400,000 folks
across the socioeconomic spectrum. We simultaneously
decreased healthcare costs 54% for 6,000 colleagues and
family members. With our mentoring, four other large,
self-insured organizations enjoyed similar measurable
results. We wanted to put our healthcare system out of
business. Who wants to spend a night in a hospital?

During the frontline part of my career, I had the privilege
of “Being in the Room Where It Happens,” be it the
examination room at the start of a patient encounter, or
at the end of life providing comfort and consoling family.
Subsequently, I sat at the head of the table, responsible for
most of the hospital care in Southwest Florida. [1]


Many folks commenting on healthcare have never touched
a patient nor led a large system. Outside consultants, no
matter how competent, have vicarious experience that
creates a different perspective.


At this point in my career, I have the luxury of promoting
what I believe is in the best interests of patients —
prevention and quality outcomes. Keeping folks healthy and
changing the healthcare industry’s focus from a “repair shop”
mentality to a “prevention program” will save the industry
and country from bankruptcy. Avoiding well-meaning but
inadvertent suboptimal care by restructuring healthcare
delivery avoids misery and saves lives.

RESPONDING TO AN ATTACK

Preemptive reinvention is much wiser than responding to an
attack. Unfortunately, few industries embrace prevention. The
entire healthcare industry, including health systems, physicians,
non-physician caregivers, device manufacturers, pharmaceutical
firms, and medical insurers, is stressed because most are
experiencing serious profit margin squeeze. Simultaneously
the public has ongoing concerns about healthcare costs. While
some medical insurance companies enjoyed lavish profits during
COVID, most of the industry suffered. Examples abound, and
Paul Keckley, considered a dean among long-time observers of
the medical field, recently highlighted some striking year-end
observations for 2022. [2]


Recent Siege Examples


Transparency is generally good but can and has led to tarnishing
the noble profession of caring for others. Namely, once a
sector starts bleeding, others come along, exacerbating the
exsanguination. Current literature is full of unflattering public
articles that seem to self-perpetuate, and I’ve highlighted
standout samples below.

  • The Federal Government is the largest spender in the
    healthcare industry and therefore the most influential. Not
    surprisingly, congressional lobbying was intense during
    the last two weeks of 2022 in a partially successful effort
    to ameliorate spending cuts for Medicare payments for
    physicians and hospitals. Lobbying spend by Big Pharma,
    Blue Cross/Blue Shield, American Hospital Association, and
    American Medical Association are all in the top ten spenders
    again. [3, 4, 5] These organizations aren’t lobbying for
    prevention, they’re lobbying to keep the status quo.
  • Concern about consistent quality should always be top of
    mind.     “Diagnostic Errors in the Emergency Department: A
    Systematic Review,” shared by the Agency for Healthcare
    Research and Quality, compiled 279 studies showing a
    nearly 6% error rate for the 130 million people who visit
    an ED yearly. Stroke, heart attack, aortic aneurysm, spinal
    cord injury, and venous thromboembolism were the most
    common harms. The defense of diagnostic errors in emergency
    situations is deemed of secondary importance to stabilizing
    the patient for subsequent diagnosing. Keeping patients alive
    trumps everything.     Commonly, patient ED presentations are
    not clear-cut with both false positive and negative findings.
    Retrospectively, what was obscure can become obvious. [6, 7]
  • Spending mirrors motivations. The Wall Street Journal article
    “Many Hospitals Get Big Drug Discounts. That Doesn’t Mean
    Markdowns for Patients” lays out how the savings from a
    decades-old federal program that offers big drug discounts
    to hospitals generally stay with the hospitals. Hospitals can
    chose to sell the prescriptions to patients and their insurers for much more than the discounted price. Originally the legislation was designed for resource-challenged communities, but now some hospitals in these programs are profiting from wealthy folks paying normal prices and the hospitals keeping the difference. [8]
  • “Hundreds of Hospitals Sue Patients or Threaten Their Credit,
    a KHN Investigation Finds. Does Yours?” Medical debt is a
    large and growing problem for both patients and providers.
    Healthcare systems employ collection agencies that
    typically assess and screen a patient’s ability to pay. If the
    credit agency determines a patient has resources and has
    avoided paying his/her debt, the health system send those
    bills to a collection agency. Most often legitimately
    impoverished folks are left alone, but about two-thirds
    of patients who could pay but lack adequate medical
    insurance face lawsuits and other legal actions attempting
    to collect payment including garnishing wages or placing
    liens on property. [9]
  • “Hospital Monopolies Are Destroying Health Care Value,”
    written by Rep. Victoria Spartz (R-Ind.) in The Hill, includes
    a statement attributed to Adam Smith’s The Wealth of
    Nations, “that the law which facilitates consolidation ends in
    a conspiracy against the public to raise prices.”     The country
    has seen over 1,500 hospital mergers in the past twenty
    years — an example of horizontal consolidation. Hospitals
    also consolidate vertically by acquiring physician practices.
    As of January 2022, 74 percent of physicians work directly for
    hospitals, healthcare systems, other physicians, or corporate
    entities, causing not only the loss of independent physicians
    but also tighter control of pricing and financial issues. [10]
    The healthcare industry is an attractive target to examine.
    Everyone has had meaningful healthcare experiences, many have
    had expensive and impactful experiences. Although patients do
    not typically understand the complexity of providing a diagnosis,
    treatment, and prognosis, the care receiver may compare the
    experience to less-complex interactions outside healthcare that
    are customer centric and more satisfying.

PROFIT-MARGIN SQUEEZE


Both nonprofit and for-profit hospitals must publish financial
statements. Three major bond rating agencies (Fitch Ratings,
Moody’s Investors Service, and S & P Global Ratings) and
other respected observers like KaufmanHall, collate, review,
and analyze this publicly available information and rate health
systems’ financial stability.


One measure of healthcare system’s financial strength is
operating margin, the amount of profit or loss from caring
for patients. In January of 2023 the median, or middle value,
of hospital operating margin index was -1.0%, which is an
improvement from January 2022 but still lags 2021 and 2020.


Erik Swanson, SVP at KaufmanHall, says 2022,


“Is shaping up to be one of the worst financial years on
record for hospitals. Expense pressures — particularly
with the cost of labor — outpaced revenues and drove
poor performance. While emergency department visits
and operating room minutes increased slightly, hospitals
struggled to discharge patients due to internal staffing
shortages and shortages at post-acute facilities,” [11]


Another force exacerbating health system finance is the
competent, if relatively new retailers (CVS, Walmart, Walgreens,
and others) that provide routine outpatient care affordably.
Ninety percent of Americans live within ten miles of a Walmart
and 50% visit weekly. CVS and Walgreens enjoy similar
penetration. Profit-margin squeeze, combined with new
convenient options to obtain routine care locally, will continue
disrupting legacy healthcare systems.


Providers generate profits when patients access care.
Additionally, “easy” profitable outpatient care can and has
switched to telemedicine. Kaiser-Permanente (KP), even before
the pandemic, provided about 50% of the system’s care through
virtual visits. Insurance companies profit when services are
provided efficiently or when members don’t use services.
KP has the enviable position of being both the provider
and payor for their members. The balance between KP’s
insurance company and provider company favors efficient
use of limited resources. Since COVID, 80% of all KP’s visits are
virtual, a fact that decreases overhead, resulting in improved
profit margins. [12]


On the other hand, KP does feel the profit-margin squeeze
because labor costs have risen. To avoid a nurse labor strike,
KP gave 21,000 nurses and nurse practitioners a 22.5% raise over
four years. KP’s most recent quarter reported a net loss of $1.5B,
possibly due to increased overhead. [13]


The public, governmental agencies, and some healthcare leaders
are searching for a more efficient system with better outcomes

at a lower cost. Our nation cannot continue to spend the most
money of any developed nation and have the worst outcomes.
In a globally competitive world, limited resources must go to
effective healthcare, balanced with education, infrastructure, the
environment, and other societal needs. A new healthcare model
could satisfy all these desires and needs.


Even iconic giants are starting to feel the pain of recent annual
losses in the billions. Ascension Health, Cleveland Clinic,
Jefferson Health, Massachusetts General Hospital, ProMedica,
Providence, UPMC, and many others have gone from stable
and sustainable to stressed and uncertain. Mayo Clinic had
been a notable exception, but recently even this esteemed
system’s profit dropped by more than 50% in 2022 with higher
wage and supply costs up, according to this Modern Healthcare
summary. [14]


The alarming point is even the big multigenerational health
system leaders who believed they had fortress balance sheets
are struggling. Those systems with decades of financial success
and esteemed reputations are in jeopardy. Changing leadership
doesn’t change the new environment.


Nonprofit healthcare systems’ income typically comes from three
sources — operations, namely caring for patients in ways that are
now evolving as noted above; investments, which are inherently
risky evidence by this past year’s record losses; and philanthropy,
which remains fickle particularly when other investment returns
disappoint potential donors. For-profit healthcare systems don’t
have the luxury of philanthropic support but typically are more
efficient with scale and scope.


The most stable and predictable source of revenue in the
past was from patient care. As the healthcare industry’s cost
to society continues to increase above 20% of the GDP, most
medically self-insured employers and other payors will search for
efficiencies. Like it or not, persistently negative profit margins
will transform healthcare.


Demand for nurses, physicians, and support folks is increasing,
with many shortages looming near term. Labor costs and burnout
have become pressing stresses, but more efficient delivery of
care and better tools can ameliorate the stress somewhat. If
structural process and technology tools can improve productivity
per employee, the long-term supply of clinicians may keep up.
Additionally, a decreased demand for care resulting from an
effective prevention strategy also could help.


Most other successful industries work hard to produce products
or services with fewer people. Remember what the industrial
revolution did for America by increasing the productivity of each
person in the early 1900s. Thereafter, manufacturing needed
fewer employees.

PATIENTS’ NEEDS AND DESIRES

Patients want to live a long, happy and healthy life. The best
way to do this is to avoid illness, which patients can do with
prevention because 80% of disease is self-inflicted. When
prevention fails, or the 20% of unstoppable episodic illness kicks
in, patients should seek the best care.


The choice of the “best care” should not necessarily rest just on
convenience but rather objective outcomes. Closest to home may
be important for take-out food, but not healthcare.


Care typically can be divided into three categories — acute,
urgent, and elective. Common examples of acute care include
childbirth, heart attack, stroke, major trauma, overdoses, ruptured
major blood vessel, and similar immediate, life-threatening
conditions. Urgent intervention examples include an acute
abdomen, gall bladder inflammation, appendicitis, severe
undiagnosed pain and other conditions that typically have
positive outcomes even with a modest delay of a few hours.


Most every other condition can be cared for in an appropriate
timeframe that allows for a car trip of a few hours. These illnesses
can range in severity from benign that typically resolve on their
own to serious, which are life-threatening if left undiagnosed and
untreated. Musculoskeletal aches are benign while cancer is life-threatening if not identified and treated.


Getting the right diagnosis and treatment for both benign and
malignant conditions is crucial but we’re not even near perfect for
either. That’s unsettling.


In a 2017 study,


“Mayo Clinic reports that as many as 88 percent of those
patients [who travel to Mayo] go home [after getting a
second opinion] with a new or refined diagnosis — changing
their care plan and potentially their lives. Conversely, only
12 percent receive confirmation that the original diagnosis
was complete and correct. In 21 percent of the cases, the
diagnosis was completely changed; and 66 percent of
patients received a refined or redefined diagnosis. There
were no significant differences between provider types
[physician and non-physician caregivers].” [15]


The frequency of significant mis- or refined-diagnosis and
treatment should send chills up your spine. With healthcare
we are not talking about trivial concerns like a bad meal at a
restaurant, we are discussing life-threatening risks. Making an
initial, correct first decision has a tremendous influence on
your outcome.


Sleeping in your own bed is nice but secondary to obtaining the
best outcome possible, even if car or plane travel are necessary.
For urgent and elective diagnosis/treatment, travel may be a

good option. Acute illness usually doesn’t permit a few hours of grace, although a surprising number of stroke and heart attack victims delay treatment through denial or overnight timing. But even most of these delayed, recognized illnesses usually survive. And urgent and elective care gives the patient the luxury of some time to get to a location that delivers proven, objective outcomes, not necessarily the one closest to home.

Measuring quality in healthcare has traditionally been difficult for the average patient. Roadside billboards, commercials, displays at major sporting events, fancy logos, name changes and image building campaigns do not relate to quality. Confusingly, some heavily advertised metrics rely on a combination of subjective reputational and lagging objective measures. Most consumers don’t know enough about the sources of information to understand which ratings are meaningful to outcomes.

Arguably, hospital quality star ratings created by the Centers for Medicare and Medicaid Services (CMS) are the best information for potential patients to rate hospital mortality, safety, readmission, patient experience, and timely/effective care. These five categories combine 47 of the more than 100 measures CMS publicly reports. [16]

A 2017 JAMA article by lead author Dr. Ashish Jha said:

“Found that a higher CMS star rating was associated with lower patient mortality and readmissions. It is reassuring that patients can use the star ratings in guiding their health care seeking decisions given that hospitals with more stars not only offer a better experience of care, but also have lower mortality and readmissions.”

The study included only Medicare patients who typically are over
65, and the differences were most apparent at the extremes,
nevertheless,


“These findings should be encouraging for policymakers
and consumers; choosing 5-star hospitals does not seem to
lead to worse outcomes and in fact may be driving patients
to better institutions.” [17]


Developing more 5-star hospitals is not only better and safer
for patients but also will save resources by avoiding expensive
complications and suffering.


As a patient, doing your homework before you have an urgent or
elective need can change your outcome for the better. Driving a

couple of hours to a CMS 5-star hospital or flying to a specialty
hospital for an elective procedure could make a difference.


Business case studies have noted that hospitals with a focus on
a specific condition deliver improved outcomes while becoming
more efficient. [18] Similarly, specialty surgical areas within
general hospitals have also been effective in improving quality
while reducing costs. Mayo Clinic demonstrated this with its
cardiac surgery department. [19] A similar example is Shouldice
Hospital near Toronto, a focused factory specializing in hernia
repairs. In the last 75 years, the Shouldice team has completed
four hundred thousand hernia repairs, mostly performed under
local anesthesia with the patient walking to and from the
operating room. [20] [21]

THE BOTTOM LINE

The Mayo Brother’s quote, “The patient’s needs come first,” is
more relevant today than when first articulated over a century
ago. Driving treatment into distinct categories of acute, urgent,
and elective, with subsequent directing care to the appropriate
facilities, improves the entire care process for the patient. The
saved resources can fund prevention and decrease the need for
future care. The healthcare industry’s focus has been on sickness,

not prevention. The virtuous cycle’s flywheel effect of distinct
categories for care and embracing prevention of illness will decrease
misery and lower the percentage of GDP devoted to healthcare.


Editor’s note: This is a multi-part series on reinventing the healthcare
industry. Part 2 addresses physicians, non-physician caregivers, and
communities’ responses to the coming transformation.

The health of a community depends on fair health insurance practices

Posted on by • Posted in Charity Care, Community Benefit, Health Insurance Industry, Health System, Hospital, Hospital Industry, Market Power, Market Trends, Outcomes, Patient Experience, Population Health • Leave a comment

https://www.healthcaredive.com/news/the-health-of-a-community-depends-on-fair-health-insurance-practices-antonio-rios/644475/

The health of a community is measured by the health of its individual members, and the health of its members depends on their access to local, high-quality medical care. Health coverage is a key indicator of the health and wellness of an individual. When people have health insurance, they have greater access to care, reduced mortality, and better health outcomes, according to a report from the American Hospital Association.

However, the current approach taken by some of the nation’s largest health insurers, or payers, is putting this at jeopardy as payers focus on profits and quarterly earnings, strip rates and put the long-term viability of health systems at risk. With hospitals in the middle of the worst economic performance in decades, it is time for payers to own up to how their actions negatively impact the communities and those they claim to serve.

As a physician and the chief of population health at a large metro-area health system, Northeast Georgia Health System, my patients’ ability to readily access medical care at our facilities — and have that care be covered by insurance — matters greatly. Any disruption in a patient’s experience, such as restricting access to care by their health plan or going out of network with an insurance company, can wreak havoc on population health. It’s no secret that many health systems across the country have felt the weight of increased administrative and contractual burdens from health insurers as denial rates continue to creep upwards.

Health insurance companies, like the nation’s largest, UnitedHealthcare, have seen profits soar in recent years. UnitedHeatlhcare’s profits were up 28 percent during the third quarter of 2022 – achieving a profit of $5.3 billion in just those three months – before closing the year at $28.4 billion in net earnings in 2023. Elevance (formerly Anthem), Cigna, and Aetna have also posted record profits recently.

We have seen the impact of the pressure payers are putting on hospitals across the country. Nearly 200 hospitals have closed since 2005, according to the Sheps Center for Health Services Research at the University of North Carolina. Many of these hospitals have closed because they failed to receive fair contracted rates from large payers and thus were insolvent.

Community benefits like charity care, health education and economic impact are provided by hundreds of hospitals nationally, but that impact is at risk if they are not fairly compensated for the services they provide.

‘We’re Going Away’: A State’s Choice to Forgo Medicaid Funds Is Killing Hospitals

Posted on by • Posted in ACA, Health Policy, Health System, Healthcare Reform, Hospital, Hospital Industry, Medicaid, Medicaid Expansion, Rural Health, Rural Health Clinics (RHC), Rural Hospital, Uncompensated Care • Leave a comment

Since its opening in a converted wood-frame mansion 117 years ago, Greenwood Leflore Hospital had become a medical hub for this part of Mississippi’s fertile but impoverished Delta, with 208 beds, an intensive-care unit, a string of walk-in clinics and a modern brick-and-glass building.

But on a recent weekday, it counted just 13 inpatients clustered in a single ward. The I.C.U. and maternity ward were closed for lack of staffing and the rest of the building was eerily silent, all signs of a hospital savaged by too many poor patients.

Greenwood Leflore lost $17 million last year alone and is down to a few million in cash reserves, said Gary Marchand, the hospital’s interim chief executive. “We’re going away,” he said. “It’s happening.”

Rural hospitals are struggling all over the nation because of population declines, soaring labor costs and a long-term shift toward outpatient care. But those problems have been magnified by a political choice in Mississippi and nine other states, all with Republican-controlled legislatures.

They have spurned the federal government’s offer to shoulder almost all the cost of expanding Medicaid coverage for the poor. And that has heaped added costs on hospitals because they cannot legally turn away patients, insured or not.

States that opted against Medicaid expansion, or had just recently adopted it, accounted for nearly three-fourths of rural hospital closures between 2010 and 2021, according to the American Hospital Association.

Opponents of expansion, who have prevailed in Texas, Florida and much of the Southeast, typically say they want to keep government spending in check. States are required to put up 10 percent of the cost in order for the federal government to release the other 90 percent.

But the number of holdouts is dwindling. On Monday, North Carolina became the 40th state to expand Medicaid since the option to cover all adults with incomes below 138 percent of the poverty line opened up in 2014 under the terms of the 2010 Affordable Care Act. The law, a major victory for President Barack Obama, has continued to defy Republican efforts to kill or limit it.

“This argument about rural hospital closures has been an incredibly compelling argument to voters,” said Kelly Hall, the executive director of the Fairness Project, a national nonprofit that has successfully pushed ballot measures to expand Medicaid in seven states.

In Mississippi, one of the nation’s poorest states, the missing federal health care dollars have helped drive what is now a full-blown hospital crisis. Statewide, experts say that no more than a few of Mississippi’s 100-plus hospitals are operating at a profit. Free care is costing them about $600 million a year, the equivalent of 8 percent to 10 percent of their operating costs — a higher share than almost anywhere else in the nation, according to the state hospital association.

Expanding Medicaid would uncork a spigot of about $1.35 billion a year in federal funds to hospitals and health care providers, according to a 2021 report by the office of the state economist.

And it would guarantee medical coverage to some 100,000 uninsured adults making less than $20,120 a year in a state whose death rates are at or near the nation’s highest for heart disease, stroke, diabetes, cancer, kidney disease and pneumonia. Infant mortality is also sky-high, and the Delta has the nation’s highest rate of foot and leg amputations because of diabetes or hypertension.

Health officials blame those numbers in part on the high rate of uninsured residents who miss out on preventive care.

“I can tell you I have a number of patients who are on dialysis with renal failure for the rest of their life because they couldn’t afford the medication for their blood pressure, and that caused their kidneys to go bad,” said Dr. John Lucas, a Greenwood Leflore surgeon.

Among Mississippi adults, only disabled people and parents with extremely low incomes, along with most pregnant women, are eligible for Medicaid. Many of the ineligible are also too poor to qualify for the tax credits for insurance under the Affordable Care Act, leaving them without affordable options.

The same is true for close to two million other Americans who live in the states that have not expanded Medicaid. Three in five are adults of color, according to a 2021 study by the Center on Budget and Policy Priorities, a nonprofit research group. In Mississippi, more than half are Black.

Gov. Tate Reeves, a Republican, and key G.O.P. state lawmakers argue that a bigger Mississippi program is not in taxpayers’ best interest. The governor says the state’s $3.9 billion surplus would be best used to help eliminate Mississippi’s income tax.

“Don’t simply cave under the pressure of Democrats and their allies in the media who are pushing for the expansion of Obamacare, welfare and socialized medicine,” Mr. Reeves said in his annual State of the State address in January.

Opponents also argue that the newly insured would become dependent on Medicaid and therefore be less likely to work. “I believe we should be working to get people off Medicaid as opposed to adding more people to it,” said Philip Gunn, the powerful Republican House speaker.

Yet in Mississippi’s Delta, a flat swath of fields of corn, soybeans and other crops nearly as big as Delaware, access to any kind of medical care is drying up for lack of money. More than 300,000 people live here, nearly 35 percent of them Black. About the same percentage live in poverty, a rate three times the national average.

Dr. Daniel P. Edney, the state’s top health officer, said he did not set Medicaid policy, and he has been careful not to take sides. But he predicted emerging health care deserts where women would have to travel long distances to deliver babies and more sick people would die because they could not gain access to care.

Of the state’s hospitals, “I have maybe heard of two that are generating any profit,” he said. When he asks hospital executives if Medicaid expansion would help their balance sheets, he said, “they say it’s a game changer.”

He predicted that five hospitals would soon downgrade into mere emergency rooms, where doctors work to stabilize patients, then transfer them to the nearest hospital.

If that happens, some of the sickest will not make it, said Dr. Jeff Moses, an emergency room physician at Greenwood Leflore.

“Where are they going? Davy Jones’s locker,” he said. “It is very dark, and I’m not exaggerating this. I just can’t imagine what will happen to this community if this hospital closes.”

Nine years after states began expanding Medicaid, evidence is growing that broader coverage saves lives. In a 2021 analysis, researchers for the National Bureau of Economic Research estimated that in one four-year period, 19,200 more adults aged 55 to 64 survived because of expanded coverage, and nearly 16,000 more would have lived if that coverage was nationwide.

Other studies suggest why: Making medical care more affordable led to increases in regular checkups, cancer screenings, diagnoses of chronic diseases and prescriptions for needed medicines.

Especially during the first six years of the Medicaid expansion, when the federal government picked up 95 to 100 percent of the cost, many states found that the program was a net fiscal gain. Some states have imposed taxes on hospitals or health care providers to cover their share of the expense, the same strategy used to help fund other Medicaid costs.

Now the federal government is offering a new incentive for the holdouts: As part of a 2021 pandemic relief measure, it agreed to temporarily pay a higher proportion of costs for some existing Medicaid patients if states broadened eligibility.

Mississippi’s office of the state economist has estimated that for at least the first decade, those savings and others would fully cover the roughly $200 million a year that Medicaid expansion would cost the state government.

Tim Moore, the president of the Mississippi Hospital Association, said expansion was “a no-brainer.” The state is so poor, he said, that for every dollar it spends on Medicaid, the federal government pumps four back in.

Polls, including by Mississippi Today and Siena College, appear to show Mississippians support Medicaid expansion, regardless of their political affiliation. Brandon Presley, the Democratic candidate for governor, is highlighting hospital closures as a reason to deny Mr. Reeves a second term in elections this November.

In a possible sign of political nervousness, the governor and the legislature recently agreed to extend Medicaid coverage to pregnant women for 12 months after they give birth, prolonging a federal pandemic-era policy.

The legislators are also trying to prop up the hospitals with a one-time infusion of $83 million or more. But that is a pittance compared with what the state has given up in Medicaid payments.

The state has lost four hospitals since 2008, according to the hospital association, and Dr. Edney, the state health officer, said that it would inevitably lose more. He said he worried most about health care access in the Delta, where he grew up, the child of working-class parents with no health insurance.

On Saturday, Representative Bennie Thompson, Democrat of Mississippi, said victims of a tornado that struck the Delta last week had to be ferried 50 miles away for medical treatment because the local hospital had no power. More Medicaid dollars, he said, would have equipped it with an emergency generator.

An hour due west from Greenwood Leflore, another major hospital, run by Delta Health System, is also in serious trouble. Licensed for more than 300 beds, the hospital one day last month held just 72 inpatients.

Thirty-two of them were kept in the emergency department, partly because of nursing cuts. One upshot is that patients seeking emergency care now wait an average of two hours, four times as long as they should, according to Amy Walker, the chief nursing officer. Some simply walk out.

The neonatal intensive care unit closed last July. Now babies in trouble must be ferried by ambulance or helicopter 125 miles south to Jackson.

Iris Stacker, the chief executive, said the hospital could remain open through the end of the year; after that, she makes no promises. She is hoping federal grants will help keep the doors open, despite the state’s failure to expand Medicaid.

But she said, “It’s very hard to ask the federal government for more money when you have this pot of money sitting here that we won’t touch.”

A top message on Greenwood Leflore’s website is now a request for donations. So far, the hospital has raised less than $12,000.

Mike Hardin, a 70-year-old retiree, was one of a handful of inpatients one recent day. He had come to the emergency room two days before with slurred speech. Doctors quickly diagnosed a stroke and now were sending him home with revised medications.

“They have to do something to keep this hospital open,” he said as he was wheeled out of his room. “The people around this area wouldn’t have any place else to go.”

The hospital’s outpatient clinics are largely still in business, and doctors there say their caseloads are full of impoverished patients who should have been treated earlier.

Dr. Abhash Thakur, a cardiologist, said he routinely saw patients in the late stages of congestive heart failure who had never seen a cardiologist or been prescribed heart medication. Some have as little as 10 percent of their heart function left.

“They are not the exception,” he said, before examining a 52-year-old man who uses a wheelchair because of his heart disease. “Every day, probably, I will see a few of them.”

Dr. Raymond Girnys, a general surgeon, had just treated a man in his late 50s. He said that a week earlier, the man had punctured his foot on a sharp stick while walking in his tennis shoes in a field.

The man did not seek medical attention until the foot became infected because he was poor and uninsured. Dr. Girnys pointed out the irony: If his patient lost his foot, he would become eligible for Medicaid because then he would be disabled.

“If they had insurance, they wouldn’t be afraid to seek care,” he said.

Experts say that no more than a few of Mississippi’s 100-plus hospitals are operating at a profit.

Razor-thin hospital margins become the new normal

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Hospital finances are starting to stabilize as razor-thin margins become the new normal, according to Kaufman Hall’s latest “National Flash Hospital Report,” which is based on data from more than 900 hospitals.

External economic factors including labor shortages, higher material expenses and patients increasingly seeking care outside of inpatient settings are affecting hospital finances, with the high level of fluctuation that margins experienced since 2020 beginning to subside.

Hospitals’ median year-to-date operating margin was -1.1 percent in February, down from -0.8 percent in January, according to the report. Despite the slight dip, February marked the eight month in which the variation in month-to-month margins decreased relative to the last three years. 

“After years of erratic fluctuations, over the last several months we are beginning to see trends emerge in the factors that affect hospital finances like labor costs, goods and services expenses and patient care preferences,” Erik Swanson, senior vice president of data and analytics with Kaufman Hall, said. “In this new normal of razor thin margins, hospitals now have more reliable information to help make the necessary strategic decisions to chart a path toward financial security.”

High expenses continued to eat into hospitals’ bottom lines, with February signaling a shift from labor to goods and services as the main cost driver behind hospital expenses. Inflationary pressures increased non-labor expenses by 6 percent year over year, but labor expenses appear to be holding steady, suggesting less dependence on contract labor, according to Kaufman Hall. 

“Hospital leaders face an existential crisis as the new reality of financial performance begins to set in,” Mr. Swanson said. “2023 may turn out to be the year hospitals redefine their goals, mission, and idea of success in response to expense and revenue challenges that appear to be here for the long haul.”

Healthcare employment rebounds to pre-pandemic levels

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Contrary to widespread reports of staffing shortages, healthcare employment reached pre-pandemic levels with the addition of 44,200 jobs in February, according to a recent report from Altarum. 

A recent survey of hospital CEOs found that healthcare staffing was their top concern. Nurses nationwide have reported unsafe staffing levels, leading health systems to restructure and lawmakers to consider safe-staffing laws. 

Yet, healthcare currently has 1.3 percent more jobs than it did in February 2020, according to the monthly Health Sector Economic Indicators brief from Altarum. The nonprofit, healthcare-focused research and consulting organization analyzes available data on spending, prices, employment and utilization to craft the monthly report. 

The data holds that this isn’t a new occurence. The sector has been adding — on average — 49,100 jobs per month for the past year, according to the brief. In February, hospitals led that growth, tapping 19,400 workers. Nursing and residential care facilities added 13,700 jobs, and ambulatory care settings added 11,100. 

However, as healthcare employment rises, its wage growth continues to decline and now lags behind economywide growth. Healthcare wage growth has been declining since mid-2022; in January, pay grew 4.2 percent year over year, while total private sector wage growth grew 4.4 percent. 

This statistic also defies industry narratives, as recent labor negotiations between unions and health systems have scored big raises for workers and clinicians. 

AHA: MedPAC’s 2024 Medicare payment recommendation is ‘out of touch with reality’

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MedPAC’s recommendation that acute care hospitals don’t need a significant increase in 2024 Medicare rates is “totally insufficient and out of touch with reality,” according to the American Hospital Association.

“This view is one-sided, inaccurate and misleading,” Ashley Thompson, AHA’s senior vice president of public policy analysis and development, wrote in a March 23 blog post. “After years of once-in-a-lifetime events in the form of a global pandemic and record inflation, hospitals across the country are struggling to continue to fulfill their mission to care for their patients and communities.”

In its annual March report to Congress, MedPAC recommended an update to hospital payment rates of “current law plus 1 percent,” which the AHA says is not enough for many hospitals to keep their doors open. 

The commission found that most indicators of sufficient Medicare rates for providers were positive or improved in 2021, though it acknowledged that hospitals saw more volatile cost increases in 2022 compared to years prior. Hospital margins were also lower last year than in 2021, according to preliminary data, driven in part by providers facing higher than expected costs and capacity and staffing challenges.

The report also said that its 2024 payment recommendations “may not be sufficient” to sustain some safety-net hospitals with a low number of commercially insured patients, and proposed $2 billion in add-on payments.

Across the U.S., a total of 631 rural hospitals — or about 30 percent of all rural hospitals — are at risk of closing in the immediate or near future.

MedPAC’s recommendations for 2024 differ from how some health economists have recently described hospitals’ finances. In January, hospitals had a median operating margin of -1 percent according to Kaufman Hall, a finding that arrived on the heels of 2022 being named the worst financial year for hospitals since the start of the COVID-19 pandemic.

“It is also important to realize that MedPAC’s report and data has limitations,” Ms. Thompson wrote, referring to a misalignment in the calendar year MedPAC chose to analyze and how hospitals can differ in how they report their individual financial earnings.

MedPAC said its report reflects 2021 data, preliminary data from 2022, and projections for 2023, along with recent inflation rates.

“…cost reports are filed for hospitals’ own specific fiscal years, and because surges, relief payments, and eventual expense increases happened at different times for different hospitals, these calculated margins don’t necessarily provide a fully accurate picture of the financial reality in 2021,” Ms. Thompson wrote.

The AHA stressed that hospitals’ finances in 2023 face much different challenges compared to 2021, when the industry was more supported by strong investment returns and federal pandemic relief. 

“The fact that massive numbers of hospitals are not currently closing due to financial pressures should be seen as positive for patients and communities,” Ms. Thompson said. “Instead, some observers seem to be disappointed that more hospitals are not failing financially.”

A detailed response from the AHA to the MedPAC report is available here.

30 hospitals, health systems cutting jobs

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A number of hospitals and health systems are trimming their workforces or jobs due to financial and operational challenges. 

Below are workforce reduction efforts or job eliminations that were announced within the past six months and/or take effect later this year. 

Editor’s Note: This webpage was updated March 27 and will continue to be updated. 

1. Bellevue, Wash.-based Overlake Medical Center and Clinics has laid off administrative staff, the health system confirmed to the Puget Sound Business Journal. The layoffs, which occurred earlier this year, included 30 workers across Overlake’s human resources, information technology and finance departments, a spokesperson said, according to the publication. This represents about 6 percent of the organization’s administrative workforce. Overlake’s website says it employs more than 3,000 people total.

2. Columbia-based University of Missouri Health Care is eliminating five hospital leadership positions across the organization, spokesperson Eric Maze confirmed to Becker’s March 20. Mr. Maze did not specify which roles are being eliminated saying that the organization won’t address individual personnel actions. According to MU Health Care, the move is a result of restructuring “to better support patients and the future healthcare needs of Missourians.”

3. Greensboro, N.C.-based Cone Health eliminated 68 senior-level jobs. The job eliminations occurred Feb. 21, Cone Health COO Mandy Eaton told The Alamance News. Of the 68 positions eliminated, 21 were filled. Affected employees were offered severance packages. 

4. The newly merged Greensburg, Pa.-based organization made up of Excela Health and Butler Health System eliminated 13 filled managerial jobs. The affected employees and positions are from across both sides of the new organization, Tom Chakurda, spokesperson for the Excela-Butler enterprise, confirmed to Becker’s. The positions were in various support functions unrelated to direct patient care.

5. Crozer Health, a four-hospital system based in Upland, Pa., is laying off roughly 215 employees amid financial challenges. The system announced the layoffs March 15 as part of its “operational restructuring plan” that “focuses on removing duplication in administrative oversight and discontinuing underutilized services.” Affected employees represent about 4 percent of the organization’s workforce.

6. Philadelphia-based Penn Medicine is eliminating administrative positions. The change is part of a reorganization plan to save the health system $40 million annually, the Philadelphia Business Journal reported March 13. Kevin Mahoney, CEO of the University of Pennsylvania Health System, told Penn Medicine’s 49,000 employees last week that changes include the elimination of a “small number of administrative positions which no longer align with our key objectives,” according to the publication. The memo did not indicate the exact number of positions that were eliminated.

7. Sovah Health, part of Brentwood, Tenn.-based Lifepoint Health, has eliminated the COO positions at its Danville and Martinsville, Va., campuses. The responsibilities of both COO roles will now be spread across members of the existing administrative team. 

8. Valley Health, a six-hospital health system based in Winchester, Va., eliminated 31 administrative positions. The job cuts are part of the consolidation of the organization’s leadership team and administrative roles. 

9. Marshfield (Wis.) Clinic Health System will lay off 346 employees, representing less than 3 percent of its employee base.

10. St. Mark’s Medical Center in La Grange, Texas, is cutting nearly 50 percent of its staff and various services amid financial challenges. 

11. Roseville, Calif.-based Adventist Health plans to go from seven networks of care to five systemwide to reduce costs and strengthen operations. The reorganization will result in job cuts, including reducing administration by more than $100 million.

12. Arcata, Calif.-based Mad River Community Hospital is cutting 27 jobs as it suspends home health services.

13.. Hutchinson (Kan.) Regional Medical Center laid off 85 employees, a move tied to challenges in today’s healthcare environment. 

14. Oklahoma City-based OU Health is eliminated about 100 positions as part of an organizational redesign to complete the integration from its 2021 merger.

15. Memorial Sloan Kettering Cancer Center announced it would lay off to reduce costs amid widespread hospital financial challenges. The layoffs are spread across 14 sites in New York City, and equate to about 1.8 percent of Memorial Sloan’s 22,500 workforce.

16. St. Louis-based Ascension completed layoffs in Texas, the health system confirmed in January. A statement shared with Becker’s says the layoffs primarily affected nonclinical support roles. The health system declined to specify to Becker’s the number of employees or positions affected.

17. Lebanon, N.H.-based Dartmouth Health is freezing hiring and reviewing all vacant jobs at its flagship hospital and clinics in an effort to close a $120 million budget gap. 

18. Chillicothe, Ohio-based Adena Health System announced it would eliminate 69 positions — 1.6 percent of its workforce — and send 340 revenue cycle department employees to Ensemble Health Partners’ payroll in a move aimed to help the health system’s financial stability.

19. Ascension St. Vincent’s Riverside in Jacksonville, Fla., will end maternity care at the hospital, affecting 68 jobs, according to a Workforce Adjustment and Retraining Notification filed with the state Jan. 17. The move will affect 62 registered nurses as well as six other positions.

20. Visalia, Calif.-based Kaweah Health aims to eliminate 94 positions through early January as part of a new strategy to reduce labor costs. The job cuts come in addition to previously announced workforce reductions; the health system already eliminated 90 unfilled positions and lowered its workforce by 106 employees. 

21. Oklahoma City-based Integris Health is eliminating 200 jobs to curb expenses. The eliminations include 140 caregiver roles and 60 vacant jobs.

22. Toledo, Ohio-based ProMedica plans to lay off 262 employees, a move tied to its exit from a skilled-nursing facility joint venture late last year. The layoffs will take effect between March 10 and April 1. 

23. Employees at Las Vegas-based Desert Springs Hospital Medical Center were notified of layoffs coming to the facility, which will transition to a freestanding emergency department. There are 970 employees affected. Desert Springs is part of the Valley Health System, a system owned and operated by King of Prussia, Pa.-based Universal Health Services.

24. Philadelphia-based Jefferson Health plans to go from five divisions to three in an effort to flatten management and become more efficient. The reorganization will result in an unspecified number of job cuts, primarily among executives.

25. Pikeville (Ky.) Medical Center will lay off 112 employees by year’s end as it outsources its environmental services department. The 112 layoffs are effective Jan. 1, 2023, with the affected employees’ last day of work expected to be Dec. 31.

26. Southern Illinois Healthcare, a four-hospital system based in Carbondale, announced it would eliminate or restructure 76 jobs in management and leadership. The 76 positions fall under senior leadership, management and corporate services. Included in that figure are 33 vacant positions, which will not be filled. No positions in patient care are affected. 

27. Citing a need to further reduce overhead expenses and support additional investments in patient care and wages, Traverse City, Mich.-based Munson Health is eliminating 31 positions and leaving another 20 jobs unfilled. All affected positions are in corporate services or management. The layoffs represent less than 1 percent of the health system’s workforce of nearly 8,000. 

28. West Reading, Pa.-based Tower Health on Nov. 16 laid off 52 corporate employees as the health system shrinks from six hospitals to four. The layoffs, which are expected to save $15 million a year, account for 13 percent of Tower Health’s corporate management staff.

29. Sioux Falls, S.D.-based Sanford Health announced layoffs affecting an undisclosed number of staff in October, a decision its CEO said was made “to streamline leadership structure and simplify operations” in certain areas. The layoffs primarily affect nonclinical areas.

30. St. Vincent Charity Medical Center in Cleveland closed its inpatient and emergency room care Nov. 11, four days before originally planned — and laid off 978 workers in doing so. After the transition, the Sisters of Charity Health System will offer outpatient behavioral health, urgent care and primary care.

Which physician specialties are most targeted for corporate roll-ups?  

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In the last edition of the Weekly Gist, we illustrated how non-hospital physician employment spiked during the pandemic. Diving deeper into the same report from consulting firm Avalere Health and the nonprofit Physicians Advocacy Institute, the graphic above looks at the specialties that currently have the greatest number of physicians employed by hospitals and corporate entities (which include insurers, private equity, and non-provider umbrella organizations), and those that remain the most independent.


To date, there has been little overlap in the fields most heavily targeted for employment by hospitals and corporate entities. Hospitals have largely employed doctors critical for key service lines, like cancer and cardiology, as well as hospitalists and other doctors central to day-to-day hospital operations.

In contrast, corporate entities have made the greatest strides in specialties with lucrative outpatient procedural business, like nephrology (dialysis) and orthopedics (ambulatory surgery), as well as specialties like allergy-immunology, that can bring profitable pharmaceutical revenue.

Meanwhile, only a few specialties remain majority independent. Historically independent fields like psychiatry and oral surgery saw the number of independent practitioners fall over 25 percent during the pandemic.

While hospitals will remain the dominant physician employer in the near term, corporate employment is growing unabated, as payers and investors, unrestrained by fair market value requirements, can offer top dollar prices to practices.