Physicians are in short supply. They are costly. Is the APP the answer to the CMO's workforce and budget challenges?
Welcome to our July 2024 cover story. Each month, our editors will be taking a deep dive into the topics that matter most to you in our cover story series. From ways to win the payer/provider war to AI governance, we have a lot of stories up our sleeves this year.
So, what did our team look into this month? Well, it’s time for physician leaders to say the unspoken part out loud: There will never be enough physicians. And even if you can find them and keep them, you can’t pay them all.
The AAMC estimates that in the next 12 years, the U.S. will be 86,000 physicians short, with more than half of those being primary care physicians. The future is a zero sum game, where the clinical need of an aging population runs up against falling numbers of physicians.
To fill those gaps, health systems and hospitals are elevating APPs and giving them more responsibilities. The resulting change in care team design is forcing CMOs and other executives to think about how they manage their physicians to ensure a productive workplace and positive clinical outcomes.
Since this shift, CMOs have begun to wonder if they need as many physicians as they thought, especially since the APPs are sometimes carrying out the majority of the tasks.
So this begs the question, is it time for CMOs to scale back their physicians and usher in more APPs instead? While the question is in part written in jest, it doesn’t mean there aren’t pros and cons to considering APP-lead teams. Our CMO editor Chris Cheney dug into what the experts have to say.
Did you miss our June cover story on turning to automation to streamline revenue cycle operations? No worries, you can read it here.
The president of St. Johns Radiology Associates talks about its middle revenue cycle tech implementation process for HealthLeader's 2023 Revenue Cycle Technology Week podcast sponsored by AGS Health, Inovalon, Omega Healthcare, and Waystar.
Hospitals will be seeing a payment bump, but will it be enough to ward off rising inflation and labor costs?
CMS recently released the fiscal year (FY) 2024 Inpatient Prospective Payment System (IPPS) final rule increasing payment rates by a net 3.1% for FY 2024 for hospitals that are meaningful users of electronic health records and submit quality measure data.
This 3.1% payment update reflects a hospital market basket increase of 3.3% as well as a productivity cut of 0.2%. Overall, the agency will increase hospital payments by $2.2 billion compared to FY 2023, which also includes a $957 million decrease in disproportionate share hospital payments and a $364 million decrease in new medical technology payments, according to the IPPS final rule.
While a $2.2 billion increase seems significant, hospitals are facing historic financial challenges. In fact, hospital margins for the year rose in June, but the divide between the haves and have-nots widened as expenses and economic pressures remained high according to a recent Kaufman Hall analysis.
Most hospitals underperformed in June, even as the median year-to-date operating margin index increased to 1.4%, compared to 0.7% in May.
These challenges highlight the fact that leaders need to stop relying on payment rate increases to keep them afloat.
"This 'new normal' is an incredibly challenging environment for hospitals," Erik Swanson, senior vice president of Data and Analytics with Kaufman Hall, said in a press release regarding it's market analysis.
"It's time for hospital and health system leaders to begin developing and implementing a strategy for long-term sustainability, including expanding their outpatient footprint and re-evaluating where finite resources are being utilized," Swanson said.
The AHA doubled down on the “woefully inadequate” payment rate increase for FY 2024.
In a statement shared with the media, Ashley Thompson, AHA’s senior vice president for public policy analysis and development, said, “The AHA is deeply concerned with CMS’ woefully inadequate inpatient and long-term care hospital payment updates. The agency continues to finalize rate increases that are not commensurate with the near decades-high inflation and increased costs for labor, equipment, drugs and supplies that hospitals across the country are experiencing.”
Drew Smith, director of revenue cycle at MainStreet Family Care, talks implementing text-based bill pay and creating a positive patient financial experience.
Digital payment options are becoming increasingly important for revenue cycle leaders as they seek to bolster their technology and better secure revenue. Perfecting and expanding these options should be a priority, especially since the same challenges that made 2022 the worst financial year since the start of the pandemic haven’t abated.
With patients increasingly demanding convenient, digital payment methods, healthcare providers must adapt to meet changing expectations to stay ahead of the competition, and this is what Drew Smith, director of revenue cycle, at MainStreet Family Care is trying to achieve with its new, text-based bill pay.
“We reduced the volume of paper statements mailed to patients by 11%—and this represents significant savings for our 46-facility system. We’ve also saved five hours in manual work per week for our revenue cycle team, or 260 hours a year,” Smith said.
During his conversation with HealthLeaders, Smith touch more on this and chatted about implementing this new technology, what it means for the systems’ patients, and how it significantly decreased accounts receivable days.
HealthLeaders: Why was it imperative to improve the patient billing experience?
Drew Smith: MainStreet Family Care serves a primarily rural population in Alabama, North Carolina, Georgia, and Florida, and often, we are patients’ only option for care. Even though we’re an urgent care center, people in our communities often turn to us for primary care because of the lack of providers available locally. Some of the areas we serve have a county hospital people can turn to for care, but many do not. Without access to care for conditions like diabetes, which impacts people in rural areas more severely than those in urban areas, the health of these communities would severely decline.
So, it’s vital that we have a healthy balance sheet. This means we depend on patients to pay their out-of-pocket costs of care in a timely manner. But research shows 40% of patients are often confused by their bills. Moreover, consumers believe healthcare providers can make it difficult for them to pay their bills. And in rural areas in particular, we’re finding that inflation is affecting residents’ decisions on whether to seek care or delay treatment. This makes clear communication around how much patients owe for their care after insurance and their options for payment crucial.
Pictured: Drew Smith, director of revenue cycle at MainStreet Family Care. Photo courtesy of LinkedIn.
HealthLeaders: How did you determine there was a need for text-based pay?
Smith: We chose text-based bill pay because we wanted to make it easy for patients to understand their financial responsibility for care and simple to pay their bill. Our goal was not only to speed payment but also reduce cost to collect. Paper statements cost $6 per statement for our organization based on paper and postage costs, the time it takes to post physical checks and respond to returned mail and the need for a lockbox. When we improve cash flow and reduce our cost to collect, we strengthen our ability to open new facilities and extend care to underserved areas—and that promotes better health.
One of the things that was attractive to us about text-based bill payment is that we could reach patients through the device they use most: their cell phone. In the rural communities we serve, most adults own a smartphone. We also don’t get charged when we have an inaccurate mobile number for the patient or the text hasn’t been successfully delivered. And the experiences of AccessOne, the vendor we work with, indicated patients pay their medical bills faster when they receive text notifications for payment. We estimated we could save thousands of dollars a week just by avoiding paper statements for a portion of our population while speeding cash flow.
HealthLeaders: How did your patient population respond to the change?
Smith: We saw an immediate impact on our ability to collect payment sooner through text-to-pay. Since rolling out mobile pay in 2019, 14% of our patients pay their medical bill using our secure text payment feature. Among patients who use mobile pay, 95% pay their balances within two weeks. More than 80% of this bucket make a payment before a paper statement is ever printed. We also offer patients the opportunity to self-enroll in a payment plan using their mobile phone. This makes the process of payment plan enrollment much more convenient. It also adds an element of privacy by enabling patients to take this step from the comfort of home.
Initially, there was some skepticism among our staff about how patients would respond to text-based payment. However, for us, the initial response to text-based medical bill payment was strong. We’ve found that by branding text-based communications to have the same look and feel as other MainStreet Family Care communications, patients more readily accept mobile pay as a valid vehicle for payment.
But that doesn’t mean we haven’t had to modify aspects of our approach. Even as mobile pay exceeded our expectations, when we reached out to patients for feedback, we discovered some people felt the language used in our communications was a little aggressive. In some instances, patients thought the messages were spam. We took a second look at our messaging to soften communication, and the response has been pretty positive. We plan to take another look at our messaging to make sure it still resonates with those we serve in a high-inflation environment.
Of course, some patients still desire paper statements—and that’s OK. Today, we wait a week after a text-based notification is sent before mailing a paper statement. This gives us time to capture payments from those who prefer to pay us electronically while respecting the preferences of those who still want a paper statement. We also allow patients to opt out of mobile notifications.
HealthLeaders: What other benefits has this change created for your organization?
Smith: Text-based payment significantly decreased our cost to collect and our days in accounts receivable. We reduced the volume of paper statements mailed to patients by 11%—and this represents significant savings for our 46-facility system. We’ve also saved five hours in manual work per week for our revenue cycle team, or 260 hours a year. That’s time that can be directed to more value-added tasks, like patient financial counseling.
HealthLeaders: How has the implementation of digital patient payment options improved the patient experience for your organization?
Smith: Digital payment options give us another way of creating better patient financial experiences—and not just around payment. For instance, when patients receive a text from our mobile pay system, they can easily call us with questions right from the payment screen. Many patients who view their statement via text end up calling to make a payment over the phone or update their insurance information. This is a return on investment that may not be reflected on our performance dashboard, but it’s made our call center a better-performing channel while creating stronger connections with patients. We’ve found that the benefit of taking an omnichannel approach to payment is that it builds trust with patients by meeting them where they are. By creating a seamless, consistent financial experience, we can leave a positive impression that carries over to their next encounter with our facility.
Are you interested in sharing your expertise on this topic? Join one of our panels for the upcoming Patient Financial Experience NOW Summiton April 19. E-mail revenue cycle editor Amanda Norris at anorris@hcpro.com for more information on joining the conversation.
As newly licensed nurses gain practice experiences, they will learn to make consistent and effective clinical judgements, says this nurse leader.
HealthLeaders spoke to Nicole Williams, director of content and test development at the National Council of State Boards of Nursing (NCSBN), about a new study that defines practice readiness for nurses. Tune in to hear her insights.
As AI weaves its way into the healthcare ecosystem, Oracle is reshaping the EHR debate to focus on collaboration and interoperability. But will everyone be willing to share?
As EHR companies ramp up their efforts to convince health systems and hospitals to sign tech contracts or switch from one platform to another, there are some who argue that the process of giving care to patients shouldn't be a business. The best business practice, they say, is sharing data and technology to ensure that patients get the best care.
That's Oracle's pitch this week at the Oracle Health and Life Sciences Summit in Orlando, and Oracle Health Life Sciences EVP and General Manager Seema Vermawas its biggest cheerleader.
With a nod to Epic, the biggest player in the pool, Verma and others at the conference made an argument that the EHR platform alone isn't the key to success. The difference will be found in how that platform embraces AI.
"Not all AI products are created equally," she said, touting an Oracle AI strategy that integrates with the EHR rather than acting as a bolt-on. "No other company is taking this end-to-end approach."
And speaking of interoperability, Verma pointed out that healthcare will only succeed if ideas are shared openly.
"The future belongs to open, extensible platforms and innovation compounds," she said. "There are no walls in our garden."
The concept pushes against traditional business norms, but healthcare isn't a traditional business. Vendors work on the idea that their products and services add value to the care continuum, and that data is a commodity that can be gathered, stored, analyzed and used for profit. Sharing those services and data, as opposed to walling them off in a silo and charging for access, is anathema to common business practice.
But that may very well be where healthcare is going. Providers need access to all patient data to improve care and clinical outcomes. The emerging business plan in healthcare is to create platforms and products that facilitate data sharing, and to derive value out of making those processes seamless for both providers and consumers.
To be sure, the EHR isn't going away. But Oracle is banking on its experience in industries outside healthcare to bypass the inconsistencies and hangups of legacy platforms and deliver products that work. And to do that, Mike Sicilia, President of Oracle Industries, said the company has to practice "thoughtful co-dependent co-building."
In the only (and perhaps final) mention of Cerner, the EHR platform that Oracle acquired for $28 million in 2022 to form Oracle Health, Verma pointed out that AI tools running through legacy EHRs are using "old data" and not providing meaningful value. She said the new AI-First EHR, built from the ground up and unveiled earlier this year, has been integrated with Oracle's cloud infrastructure and data platform, as well as tools like the Oracle Semantic Database and Knowledge Graph that capture the conversation, pull in data from separate sources and make it meaningful.
"The new Oracle EHR is voice first, and the record writes itself," she said.
Verma said more enhancements will be coming out in the next couple of years, including an Autonomous Reimbursement System that's designed to apply AI to revenue cycle management (what she called "a labyrinth of the ‘80s") and, working with payers, tackle prior authorizations and denials.
The company also plans to roll out a Life Sciences AI Data Platform and suite of apps in 2027 that will address clinical trials through the EHR, enabling researchers, clinicians and even patients to work together to find the right candidates for clinical trials.
The gist of Oracle's presentation is that its healthcare platform will be open, and that anyone can be part of the ecosystem. The company even unveiled an Oracle Center of Excellence, with Sicilia pointedly noting that organizations "whose partner is our competitor" can participate.
At the end of the day, however, Oracle is still one player in a very big pond, and its vision of a connected healthcare ecosystem has to deliver before health systems and hospitals will even consider changing their EHR platforms. Oracle did get the jump on Epic when it released its AI-First EHR, and Verma noted that the company is embracing federal efforts for nationwide interoperability with plans to become a Qualified Health Information Network (QHIN).
Sicilia also made note of the speed with which organizations are adopting AI tools and using them. Now comes the hard part of seeing real value and developing programs that reduce costs and complexity, improve workflows for doctors and nurses and boost clinical outcomes.
Whether that will stem the tide of health systems embracing Epic or other EHR platforms remains to be seen. But the concept was backed by a quartet of health system executives in a separate panel. Richard Gray, MD, CEO of the Mayo Clinic's Arizona hospital, said healthcare organizations and their patients suffer when they think they have all of the answers.
"We don't know who is going to have the best idea, but we do know that Mayo Clinic isn't going to have all the best ideas," he noted.
At Nemours Children's Health, Scott Shaw helps the health system's young patients play games. He's doing a lot more than just letting them have fun.
Health IT isn't all fun and games. Until it is.
Scott Shaw has perhaps the most enviable tech job in healthcare. His job at Nemours Children's Health in Wilmington, Delaware is to make sure all of the hospital's pediatric patients can play video games – and to play with them if their family members and friends aren't available.
"A lot of people go, 'That seems like a dream job,'" the pediatric health system's Game and Technology Specialist says. "And yeah, it is. I get to play video games with kids in the hospital while they're here."
"We have a lot of long-term kiddos," he continues. "We have [children] that are here for repeated treatments and things like that. Getting to build relationships with those kids, doing something fun and normalizing … can distract them from what they're going through and … connect them back to a community that they've already been taking a part in. That really helps to make the day go by a little easier."
Serious Business
Fo Shaw and Nemours, playing is serious business – and it's a strategy that healthcare leaders across the country should be considering. Video games as part of inpatient entertainment services promote patient engagement and satisfaction, helping both patients and their families get through the trying time of being in a hospital. In addition, innovative healthcare providers are using games and gaming technology to boost clinical outcomes, through specially designed games that tackle hot-button care gaps like chronic care management and medication adherence.
While it isn't known how many health systems and hospitals actively support gaming or have programs in place, organizations like the Starlight Children's Foundation and Child's Play Charities work with children's hospitals to help their patients access games. As of 2021, Starlight Gaming has helped more than 11.6 million children in more than 900 children's hospitals in the U.S. and Puerto Rico, while Child's Play is partnering with nearly 200 pediatric hospitals to integrate gaming and technology into pediatric patient care.
And that's where Shaw comes in.
A former chair of the Game Design and Development Program at Wilmington University, he was brought into Nemours in 2022 through a two-year grant from Child's Play. His work was so successful that Nemours made him a full-time staff member last year.
The 4 Pillars of Gaming at Nemours
Shaw's work at Nemours is structured around four strategies:
Set up and maintain the gaming platform at the hospital and make sure all patients can access and play games. Shaw says he often gets surprised looks from patients and their parents when he walks into a room (he used to get surprised looks from the doctors and nurses as well, but he's become a familiar figure now). And not just because he's usually in a Hawaiian shirt.
"I have had parents, after I give my intro, explain what I do, they will immediately look at their kiddo and be like, there's your dream job right there," he says.
Aside from introducing patients and their parents to the gaming platform, he's in the background, making sure everything is working properly and the kids have access to age-appropriate games.
Play games with patients who need gaming partners. This is an undervalued responsibility. Parents and siblings usually can't stay in the room forever, and the toughest time for kids is when they're alone in the hospital room. That's when Shaw steps in.
"If you don't have a buddy, if mom or dad or your brother or sister aren't here and you need somebody to play with, just tell your nurse and I'll come and hang out for a little while and we can either talk about gaming or play some games," he tells the kids.
That goes a long way toward making someone feel a little bit more comfortable at a very trying time.
Help develop programs that use games to improve care management. This is where Shaw's job intersects with clinical care. Aside from entertainment, these games can help kids better understand their care, or get them through a tough time. Shaw says he's helped kids during a stressful wound dressing change by putting them on a VR set that has them interact with kittens, or on a roller coaster ride timed perfectly to end with the dressing change.
Shaw also develops games that can help kids stuck in their rooms explore the hospital campus, or go to places they would have gone on vacation with their families had they not had to go to the hospital.
They're merging gaming tech and patient care to "help kids feel normal again [and] distract them from what they're going through," he says. Most importantly, "when they need it, [he can] be the support system throughout the hospital for kids."
Help develop special projects that merge gaming with patient care.
These are the clinical games – games that help children diagnosed with diabetes to understand their chronic condition and how to care for themselves, or games that explain cancer or asthma or heart disease. These can be better tools than any doctor's printout or tutorial.
This is where gaming, games and gaming theory hold the most potential in healthcare. They can be used to help not only children, but patients of all ages understand what they're going through and teach them how to manage their care and live healthier lives. They're tools that can unlock not only better engagement and adherence, but also better clinical outcomes.
"I think we're going to get to that point where a lot more folks are looking at it seriously and going, 'This is where we need to be,'" says Shaw.
Understanding Why Games Are Played
One important aspect about gaming at Nemours, Shaw says, is that it's not based on the idea of getting a reward for completing a task successfully.
"Making you better is not a reward," he points out. "This is what we do. We want to enable that."
Games, he says, are for entertainment and learning, not winning prizes. To that end, it can be fun to lose a game and see what happens, and to be able to play it again with a different outcome.
The Clubhouse
Shaw works often from The Clubhouse, a third floor haven in the health system that encompasses activities and arts and crafts organized by activity coordinators and child life specialists, a preschool area and dramatic play area, a teen area with an air hockey table, pool table and the aforementioned gaming systems, and even a CCTV studio (he says Bingo on Wednesdays is very popular).
It's a very different atmosphere in there, compared to the rest of the hospital. That, given the very nature of a pediatric hospital, makes it a special place.
"If we're out here at The Clubhouse and we're playing [games], you'll hear lots of laughter, lots of hooting and hollering and giggles," he says. "And to hear that within a hospital, I know I'm doing something right. If we're bringing smiles or bringing laughter, families are having fun, kids are having fun, siblings are having fun. … That is the best indicator that I think it's working."
Shaw, who networks often on a Slack channel for fellow pediatric gaming specialists and attends symposiums on gaming in healthcare, says the network isn't big enough by far. When asked what most surprises him about the use of games in healthcare, his response is, 'Why doesn't every hospital have a me?'
This should be an integral part of any health system, he says, helping adults as much and as often as children. Every hospital IT platform should encompass games and gaming, and every hospital should have gaming specialists.
"I would love to take this up and down the care spectrums to really see what kind of impacts we can make using gaming," he says. "It would be a lot of fun."
CNOs can build confidence and provide education to improve the ED nurse experience, says this nurse leader.
From a nurse's perspective, the emergency department is a place where care delivery can be chaotic and disorganized.
Crowded emergency rooms and workplace violence are big obstacles that get in the way of providing safe and efficient care delivery, and it's the CNO's responsibility to make sure that the ED nurses are prepared to handle as many different scenarios as possible.
Overcrowding and workplace violence are big obstacles that get in the way of providing care in the emergency department, says this nurse leader.
On this episode of HL Shorts, we hear from Ryan Oglesby, president of the Emergency Nurses Association (ENA), about the biggest challenges that emergency department nurses face. Tune in to hear his insights.
A practice-ready nurse is one who can make consistent, effective clinical judgements, and know when to ask for assistance, says this nursing leader.
As CNOs focus on recruiting and retaining new graduate nurses, they must look for candidates who are both qualified and ready to practice.
After getting hired for the first time, it takes time for new-to-practice nurses to get comfortable practicing autonomously in the workforce. However, new-to-practice nurses in 2025 have different needs and workflows than nurses of previous generations.
According to Nicole Williams, director of content and test development at the National Council of State Boards of Nursing (NCSBN), there are more newly licensed nurses working in the emergency department, critical care, and high acuity areas, where they will have to make more consistent and effective clinical judgments. As patient populations age and have higher patient acuity, there is more urgency for new nurses to engage in effective clinical decision-making from the beginning of their careers.
"As newly licensed nurses begin to gain practice experiences, they come to recognize patterns more regularly, recognize cues, and can readily synthesize salient cues in order to make effective clinical judgments," William said.
Clinical judgement is essential
The NCSBN recently published a study that details characteristics of new-to-practice nurses and how long it takes for their entry-level characteristics to be replaced by consistent and effective clinical judgement. Currently, according to Williams, there is no standard amount of time that entry-level nurses should remain practicing beside a seasoned nurse.
The study found that out of the 200 nurses surveyed, 74% of them stated that it takes about 12 months to be ready to practice autonomously without relying on a more experience nurse for guidance.
"It takes a nurse that’s new to practice up to about 12 months of engaging in nursing practice where they are deferring to a more seasoned colleague to receive supportive help until they are then able to practice more autonomously," Williams said.
According to Williams, there are several qualities that make a practice-ready nurse. While new graduate nurses will have the knowledge to begin practicing, there seems to be a disconnect between knowing the information and processing it to consistently make an effective decision.
"One of the key variables that we found is that in order to really support that area of what we call 'practice readiness' [a nurse needs] the ability to effectively engage in clinical judgement," Williams said. "We find that clinical judgement is essentially a scaffolding for entry level nursing practice within that transition to practice period that helps support patient safety."
Why practice readiness matters
For CNOs, exploring resources during the 12-month period as a way to ensure practice readiness among nurses is essential, Williams explained.
"In other professions, there is a defined, supervised practice period where a novice physician or advanced practice provider would practice under a more seasoned physician," Williams said. "In nursing, we do have that paradigm, but there's no defined period on when it should end."
According to Williams, it's important to define that time period so CNOs can better understand and assess the knowledge, skills, and abilities that are required for an entry-level nurse to practice safely.
"I think one of the things that is universally of interest for our practice partners and CNOs to consider is how long that entry-level period lasts because that's the amount of time that a newly licensed nurse will need additional supporting resources," Williams said.
Williams recommends that CNOs focus on transition to practice resources to ensure that new nurses enter and remain in the workforce feeling confident and ready to do their jobs. Providing a hybrid between a curriculum and supportive practice on the units with a preceptor can be a great resource for nurses, along with mentors and coaches, Williams explained.
"It really helps the entry level nurse become more well acclimated as they're beginning to gain those clinical experiences," Williams said. "The entry level nurse is quite different from another nurse who has been in practice a bit longer, and they're going to need supportive care within the transition to practice."
