The One Thing That Could Be Holding Your Organization Back – and How to Fix It

As the need for healthcare continues to grow and the physician shortage worsens, hospitals and other healthcare organizations need this secret weapon to remain efficient while providing the highest level of care for their patients.

As the need for healthcare continues to grow and the physician shortage worsens, it is no wonder that hospitals and other healthcare organizations have embraced PAs (physician assistants) and NPs (nurse practitioners). PAs and NPs can diagnose illness, develop and manage treatment plans, prescribe medications, and often serve as a patient’s principal healthcare provider. They practice in every state and in every medical setting. Studies demonstrate that they provide high-quality care, enhance patient satisfaction, and can improve an organization’s bottom line.

But the full benefit of this highly trained and skilled workforce is realized only when employers successfully integrate PAs and NPs into their care delivery models. 

At the American Academy of PAs’ Center for Healthcare Leadership and Management (CHLM), we are convinced that the inefficient use of PA and NP time and skills will certainly hold back your organization’s performance and may lead to reduced patient satisfaction and employee morale. Making the most of PAs and NPs—with respect to both patient care and the organization's bottom line—requires a firm grasp of relevant federal and state laws, payer guidelines, and billing and reimbursement protocols, as well as an understanding of what drives PA and NP engagement. Established in 2014 to respond to employer concerns about how to fully utilize PAs and NPs, CHLM brings subject matter expertise to each of these critical areas.

In addition to CHLM’s broad knowledge of laws and regulations that apply to this workforce and a keen understanding of how hospitals and healthcare systems can create a PA and NP-friendly environment, we recognize the value of collecting unique data from each client. That includes comparing organizational bylaws to state and federal regulations, reviewing billing practices, identifying strategies for risk mitigation, and guiding them to successfully incorporate PAs and NPs in a way that aligns with the executive strategy of their organization.

Recent research confirms the value of PAs and NPs on the healthcare team, and the risks of not fully utilizing their skills and training. According to recent data from Medical Group Management Association, for example, medical practices are seeing greater profitability when they have more NPs and PAs per physician. Advance practice providers were listed as one of the “top priorities” for chief financial officers at Becker’s Review Annual Conference last year. And at the 2017 Healthcare Leadership Congress, research was presented estimating that 12 percent of every PA and NP’s billable tasks are not being captured. That may not sound like much, but in a system that employs 500 PAs and NPs, that’s about $8 million in charges left on the table each year.

In healthcare, value is defined as quality divided by cost. Quality is something employers should expect from all their providers therefore one has to analyze cost. PAs and NPs have been established as high-quality providers, are less expensive to employ, and when utilized optimally, employers see an immediate revenue increase per provider. Additionally, physicians are freed up for more complex services. The national median salaries for PAs and NPs are $104,860 and $110,930 respectively—both lower than the average salary for physicians—which the U.S. Bureau of Labor Statistics estimates to be about $208,000.

While salaries for PAs and NPs are lower than physicians, employers should not make the mistake of underutilizing this workforce. Here’s a quick example of sub-optimal utilization that can lead to frustrated employees and a loss of revenue. Let’s evaluate the numbers for a 30-minute new neurosurgical patient visit (99204 Level 4 New):

• The half-hour pay for the surgeon is approximately $130 and $27 for the PA or NP.
• Assuming a $131 billable event, by using the shared visit model of the surgeon and PA or NP both seeing the patient together, you’ve lost $36.
• By only using the surgeon to see the patient, you’ve lost $9.
• But by using the PA or NP for the new patient visit, you have a positive contribution margin of $84 (even at the 85 percent reimbursement rate) while the surgeon is seeing other complex patients or performing surgery.

As you can see, optimally utilizing these valuable providers makes sense for the bottom line – and failing to do so can be costly on all fronts. Smart healthcare leaders partner with organizations that can help them review billing strategies, understand state and federal regulations, and mitigate risk, while still keeping organizational priorities top of mind. Contact CHLM today to ensure that your organization is moving forward at the speed of healthcare.