Locum tenens clinicians can be a short-term solution for doctor shortages, but CMOs must plan carefully how to use them.
Locum tenens physicians can plug short-term gaps in the physician workforce, but CMOs must be aware of both the cost and the effect on workplace culture.
There are about 50,000 locum tenens physicians working in the United States, says Joseph Sturdivant, MD, CMO of IMN Enterprises, a healthcare staffing company. With a clinician shortage nationwide, he notes, they're a popular solution to fill workforce gaps.
About 88% of the nation’s health systems used locum tenens clinicians in 2023, Sturdivant says, and half of them expect to use more in 2024.
Here are 5 facts about employing locum tenens clinicians that you need to know:
Locum tenens clinicians can be a short-term solution for doctor shortages, but CMOs must plan carefully how to use them.
Locum tenens physicians can plug short-term gaps in the physician workforce, but CMOs must be aware of both the cost and the effect on workplace culture.
There are about 50,000 locum tenens physicians working in the United States, says Joseph Sturdivant, MD, CMO of IMN Enterprises, a healthcare staffing company. With a clinician shortage nationwide, he notes, they're a popular solution to fill workforce gaps.
About 88% of the nation’s health systems used locum tenens clinicians in 2023, Sturdivant says, and half of them expect to use more in 2024.
"What we have seen in the rise of locum tenens is the ability to fill the void of clinicians as we have an aging population and increased utilization of inpatient care," says Sturdivant, who is a practicing locum tenens physician. "There is a lack of physician coverage throughout the nation."
Andy Anderson, MD, MBA, executive vice president and chief medical and quality officer at RWJBarnabas Health, says the health system uses locum tenens physicians in several departments.
"We have certain physician areas where we have a shortage, and having access to locum tenens physicians enables us to fill those gaps at least in the short term," he says.
Locum tenens clinicians are hired for various lengths of time, Sturdivant says. They can fill in for a week during the holidays, for a couple of months to cover maternity or paternity leave, or for several months while a healthcare organization recruits a permanent clinician.
In the longer term, Anderson says, it's more beneficial to have physicians who remain with a health system, hospital, or physician practice for long periods of time.
"Locum tenens physicians tend to come and go, and there is less opportunity for them to get to know the staff, get to know a facility, and get to know the community," he says.
Anderson says permanent clinicians are superior in the long term because they become familiar with their clinical colleagues, their institution, and the community they serve.
Financial perspective
There is a financial challenge associated with employing locum tenens clinicians, Anderson says.
"They tend to be more expensive than employed clinicians," he says. "So, in the long run financially, locum tenens is not the best model for us. It is important to fill gaps and make sure we can operate our business fully staffed. However, the incremental salary a locum tenens clinician typically demands is a cost burden."
Typically, locum tenens clinicians earn 25% to 40% more in monetary compensation than permanent clinicians, Sturdivant says. However, they are not given a benefits package as part of their compensation, which can account for one-third of the compensation that permanent clinicians have as part of their employment, he says.
Sturdivant says it's important not to view the impact in isolation.
"You must look at why organizations look at hiring locum tenens physicians," he says. "There might be a surge in patients and an organization's current staffing model cannot handle that level of patient care efficiently. Those inefficiencies can suck away the margin that serving a larger patient population can produce."
In addition, Sturdivant says, locum tenens clinicians can help to reduce doctor turnover as well as boost retention and provider satisfaction because permanent clinicians are overworked when there are openings in the permanent staff.
"If you are not meeting your staffing goals, your physicians are going to burn out and leave, which has a financial cost," he says. "When you talk about the financial bonus that locum tenens physicians receive, that cost is offset by improvements in patient care, permanent physician satisfaction, and margin that is generated from being fully staffed."
Having a pipeline to recruit permanent clinicians is an alternative to using locum tenens clinicians, Anderson says.
"In today's market, you will have a need to fill gaps here and there, but having a physician pipeline is the best solution," he says. "At RWJBarnabas, we have established a physician pipeline in partnership with Rutgers University. We are hiring physicians from Rutgers and retaining them in our communities."
Ensuring locum tenens assignments are successful
A successful locum tenens assignment, Studivant says, begins with teamwork.
"In my experience working in a locum tenens capacity, the facilities where I have struggled in my assignments are those that treated me not as a member of the team but as an expendable commodity," he says. "When I have worked as a medical director, I have had the most success with locum tenens clinicians when they are brought on as full members of the team."
Also crucial, he says, are onboarding processes.
"You want a locum tenens physician to get to know a facility and get to know the team they are working with," he says. "It is important to establish connectivity and relationships early on, so the locum tenens doctor can work as a team member with the other staff in the facility."
The onboarding process should include creating familiarity with an organization's culture, mission, vision, and values.
"They need to understand the strategic priorities of the organization," Anderson says.
That includes the quality and patient safety requirements of an organization.
"There needs to be transparency around the areas where you are focused in terms of quality and patient safety," he says. "You need to make sure that a locum tenens clinician sees the metrics that are being tracked. They need to understand the areas that are being prioritized. They also need to know how they can contribute to the outcomes that a facility is seeking."
Sturdivant says several studies have shown that locum tenens physicians compared to permanent providers are statistically indistinguishable in terms of quality care.
"[They] are not bouncing around from job to job because they are not doing a good job," he says. "They are highly educated and highly motivated professionals who have chosen to work locum tenens assignments with a skillset comparable to permanent physicians."
Sturdivant says physicians are attracted to locum tenens jobs because they can have a freedom of movement and the ability to set a working schedule.
"I personally have viewed my locum tenens work as an opportunity to put my toe in the water and test-drive different organizations and different practice patterns," he says. "Then you get the benefit of being in control. As a locum tenens clinician, you get to declare your availability in terms of scheduling."
Yale New Haven Health launched a major initiative four years ago to reduce variation in care at the health system's four acute-care hospitals and outpatient sites.
Yale New Haven Health is seeking to reduce variation in the delivery of care with the health system's Care Signature Initiative.
Decreasing variation has been a central goal of quality improvement since W. Edwards Deming pioneered the concept in the Toyota Production System in the 1970s. In care delivery, research has shown the consequences of inappropriate variation include underusing needed services, overusing unwarranted services, higher costs, and worse clinical outcomes.
Here is how Yale New Haven Health is reducing variation in care delivery.
Click here to read the accompanying article, which features comments from Thomas Balcezak, MD, MPH, chief clinical officer for Yale New Haven Health.
Clinical components of the merger between Intermountain Health and SCL Health have included integrating clinical care, integrating medical staffs, and promoting simplification of the experience of clinicians and patients.
Intermountain Health Chief Clinical Officer JP Valin, MD, MHA, has been managing the clinical elements of the 2022 merger between Intermountain Health and SCL Health.
There are several clinical aspects of the merger between the health systems. These include integrating clinical care, integrating medical staffs, and promoting simplification of the experience of clinicians and patients, Valin says in this week's HealthLeaders podcast.
When Valin came into the role as chief clinical officer of the new Intermountain Health post-merger, he was told that Rule No. 1 should be to not break anything.
"That was a great comment because both organizations had very long and storied histories of clinical excellence and providing great clinical care," he says.
JP Valin, MD, MHA, is chief clinical officer of Intermountain Health. Photo courtesy of Intermountain Health.
Over the past two years, Valin has been leading a phased approach to merging clinical care at Intermountain Health and SCL Health.
The first phase has involved "wiring and plumbing," Valin says.
"When you build a new house, you need to put the wiring and plumbing in before you can close the walls," he says. "We needed to do that work as part of our merger. We were coming from a place where both organizations did things well, but we did things differently."
For example, Intermountain Health and SCL Health had different software utilization, with one organization using MicroSoft and the other using Google.
"We had to combine on MicroSoft to be able to communicate," he says.
Intermountain Health and SCL Health have also been working to get on the same EHR. SCL Health was on Epic, and Intermountain Health used mainly Cerner. The process to shift Intermountain Health to Epic should be complete by the end of this year.
The second phase of the merger effort was a period of clinical discovery, Valin says.
"We spent time getting to know each other across the organizations and bringing together teams from the organizations to meet each other and share what each organization was doing," he says. "This second phase allowed us to identify best practices that we could share as organizations."
The third phase has involved building structures and processes to connect people together and to connect leadership structures together, Valin says.
"We wanted to align our work and integrate clinical care across the new Intermountain Health," he says. "We are more than two years into this work. We have made tremendous progress, but we are still not done."
There are better ways to retain physicians than to require them to sign noncompete contracts, the CMO of Denver Health says.
The use of noncompete contracts is widespread in healthcare, with as many as 45% of primary care physicians required to sign the agreements, according to the American Medical Association.
The FTC estimates that about 18% of the nation's workforce—roughly 30 million people—are subjected to noncompete clauses. However, in April, the Federal Trade Commission issued a final rule that banned noncompete contracts for most workers, including physicians.
The American Hospital Association and other healthcare stakeholders claim the FTC overstepped its authority to approve what the AHA calls "a bad law, bad policy, and a clear sign of an agency run amok." Now, the FTC final rule is being challenged in court.
Last month, a complaint was filed with the National Labor Relations Board that challenges a noncompete contract with part-time physicians at Mount Sinai Health System. The complaint targets a clause in the noncompete contract that states Mount Sinai part-time physicians may not recruit, solicit, or induce to terminate the employment of hospital system employees or independent contractors one year after a part-time physician's termination.
Mount Sinai declined a request from HealthLeaders to comment on the complaint.
Connie Savor Price, MD, is CMO of Denver Health. Photo courtesy of Denver Health.
"What they are probably trying to do is to prevent part-time physicians from recruiting people they have worked with at Mount Sinai," says Denver Health CMO and HealthLeaders CMO Exchange member, Connie Savor Price, MD. "This restriction bars part-time physicians from offering opportunities to colleagues at another practice or hospital."
According to Savor Price, noncompete contracts for part-time physicians are problematic for those doctors.
"For a part-time physician, noncompete contracts are particularly difficult given that they are only part-time, and the contracts limit a physician's ability to round out their employment, which should not be the purview of the employer," Savor Price says.
Denver Health does not require physicians to sign noncompete contracts.
"We don't feel the need to use noncompete contracts for physicians," Savor Price says. "We want to stay grounded in what we believe is best to service the health needs of our community. We do not see how noncompete contracts contribute to that goal."
Proponents of noncompete contracts for physicians say the agreements are helpful in retaining doctors at a health system, hospital, or physician practice.
The disadvantages of noncompete contracts outweigh the benefits, according to Savor Price, who says noncompete contracts can create a situation where a physician can be forced into working for somebody he or she does not want to work for.
"We know that workers including physicians who are not happy in their work often do not perform as optimally as they could," Savor Price says. "So, it does not serve the community to have these agreements enforced."
Satisfied physicians provide the best care for patients, according to Savor Price.
"We want doctors who want to stay here, who want to practice here, and who are happy to practice here," Savor Price says.
There are better ways to retain physicians than requiring doctors to sign noncompete contracts, according to Savor Price.
"You can provide a pleasant practice environment as well as salaries and benefits that are competitive," Savor Price says. "There are also things that can make a physician's job more interesting and purposeful. For example, many physicians like to teach, so you can provide academic opportunities."
In addition, there are different ways to compensate physicians, according to Savor Price.
"You can provide retention payments or other incentives that do not prevent a physician from going back into a community if they want to leave a job," Savor Price says.
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Susan Bray-Hall, MD, was named CMO of VA Rocky Mountain Network on July 1. She had been serving as Interim CMO of the Denver-based U.S. Department of Veterans Affairs (VA) health system since November 2023. Prior to joining the VA Rocky Mountain Network, Bray-Hall served as chief of staff for the Oklahoma City VA Health Care System.
VA Rocky Mountain Network features 18,000 employees, eight hospitals, and a $5 billion operating budget. It has the largest geographic footprint of VA health systems in the lower 48 states, serving five primary states (Colorado, Montana, Oklahoma, Utah, and Wyoming) and portions of five other states (Idaho, Kansas, Nebraska, Nevada, and Texas).
One of the primary challenges of leading clinical care in such a large organization is listening and making sure that staff members are heard, according to Bray-Hall.
"I need to build relationships, spend time at all of the facilities, encourage the building of teams, and get staff to speak up," Bray-Hall says. "If I am listening to the staff, we won't miss important concerns."
For a CMO, listening is essential to promote patient safety, according to Bray-Hall.
"My primary approach to patient safety is empowering staff to speak up," Bray-Hall says. "I want staff to be able to comment on their concerns and have them taken seriously. They are the ones who are most likely to see patient safety issues."
Bray-Hall says her patient safety concerns include medication safety, surgical safety, and healthcare-associated infections, but she must be aware of the full spectrum of patient safety.
"I am concerned about taking care of patients' mental health, physical health, primary care and prevention, and all of the services in between," Bray-Hall says. "So, when it comes to patient safety for me, it is not a particular focus, it is always a global focus."
For a CMO, listening is also pivotal to promoting quality care, according to Bray-Hall.
"It is important to listen to your staff," Bray-Hall says. "The best ideas come from the frontline staff when they are taking care of the veterans."
Susan Bray-Hall, MD, is the new CMO of VA Rocky Mountain Network. Photo courtesy of VA Rocky Mountain Network.
The VA model of care
VA health systems are veteran-focused and provide comprehensive care, according to Bray-Hall.
"We embrace population health," Bray-Hall says. "We have special education for staff to care for veterans. We focus on the multi-morbid patients, so we are concerned about the global needs of our veterans. We do a ton of prevention. We provide comprehensive and coordinated care."
Given the needs of their patient population, VA health systems have several focal points, according to Bray-Hall.
"The data supports that the VA provides some of the best care in the country for cardiovascular care and preventative health," Bray-Hall says. "We are focusing on making sure that patients are getting the comprehensive care they need for their cardiovascular care in the primary care setting. Mental health and suicide prevention are core services."
Care coordination is a top priority at VA health systems, according to Bray-Hall.
"We have social workers that do care coordination and intensive case management for high-risk veterans. These are patients who have significant conditions and hospitalizations," Bray-Hall says. "We have nurses who do care coordination in primary care and that is their main job."
The VA provides care coordination in medication management.
"We have a single pharmacy record, which is extremely helpful because medications can get mixed up when a patient is going to multiple pharmacies and multiple sites of care," Bray-Hall says.
Prepared to lead
Bray-Hall is board certified in internal medicine, geriatrics, hospice, and palliative care, which provides a solid foundation to serve in the CMO role.
"I rely on my medical background all the time," Bray-Hall says. "Internal medicine gives you the breadth and knowledge base across the adult lifespan. My geriatric training taught me a lot about systems-based care and how to improve systems to provide quality care and take safer care of patients. My hospice and palliative care training taught me about listening and empathy."
Bray-Hall says her approach to leadership as CMO is to be accessible to peers and staff.
"I also share my successes and my failures," Bray-Hall says. "I want to always be authentic, which helps people feel they can come to me. I also have a connection with clinicians. I will be doing geriatric consultations via telemedicine for veterans who are frail."
Yale New Haven Health launched a major initiative four years ago to reduce variation in care at the health system's four acute-care hospitals and outpatient sites.
Yale New Haven Health is seeking to reduce variation in the delivery of care with the health system's Care Signature Initiative.
Decreasing variation has been a central goal of quality improvement since W. Edwards Deming pioneered the concept in the Toyota Production System in the 1970s. In care delivery, research has shown the consequences of inappropriate variation include underusing needed services, overusing unwarranted services, higher costs, and worse clinical outcomes.
Yale New Haven Health launched its Care Signature Initiative in late 2019 and early 2020, says Chief Clinical Officer Thomas Balcezak, MD, MPH.
"The intent was based on the idea that variation is bad and that we should develop a clinical consensus on how specific conditions should be evaluated, diagnosed, and treated," he says.
The initiative has developed more than 600 Care Signature Pathways that are used thousands of times per week. The first Care Signature Pathway that the health system developed was for COVID-19, Balcezak says.
"We updated the Care Signature Pathway for COVID-19 every time a new therapy was determined to be effective, or an old therapy was determined not to be effective," he says. "As it worked out, we were updating that Care Signature Pathway practically every other day."
The impact of that pathway, Balcezak says, was profound.
"Our mortality was not only among the lowest in the country but also no different if you were in our smallest hospital in Westerly, Rhode Island, or at our academic medical center," he says. "We were able to achieve good outcomes at all of our hospitals because no matter which facility patients touched, they got the same care delivered in the same way."
Care Signature Pathways are developed by Care Signature Councils, which consist of representatives from all of the disciplines involved in the care for a particular condition. Those councils also update pathways as new medical knowledge arises.
"We give the council space and time to drive to consensus around the appropriate diagnostic work-up tests and the appropriate therapeutics for a particular medical condition," Balcezak says.
Once a pathway is developed, it is integrated into the health system's Epic EHR. Once a pathway is available on Epic, clinicians can populate care plans for patients automatically.
"We can make physicians' jobs easier by using technology to deliver recommendations," Balcezak says. "For example, if they are trying to treat pneumonia, we have a Care Signature Pathway for that condition, and they can click on a button in the EHR that populates the order set."
Thomas Balcezak, MD, MPH, is chief clinical officer of Yale New Haven Health. Photo courtesy of Yale New Haven Health.
Generating results
Balcezak says the initiative has produced positive results.
"We have gotten to a reduction in variation that has been a bedrock of quality improvement for years," he says.
For example:
Alcohol use disorder: The health system's Care Signature Pathway for alcohol use disorder recommends a treatment plan and gives the physician a recommended order set. Before Care Signature Pathways were created, only about 14% of the patients received proper treatment; now roughly 85% of patients are getting that recommended treatment.
High-sensitivity troponin test: In February 2023, a new high-sensitivity troponin test became available. Troponin is an enzyme that is released by heart tissue when it is injured, so testing for troponin in patients who present with chest pain in the emergency department can determine whether they are having a heart attack. The health system has a Care Signature Pathway for the high-sensitivity troponin test that includes the level of troponin that prompts a cardiology consult and the level of troponin that allows a patient to go home safely. The pathway has led to significant reductions in emergency department length of stay and hospital admissions.
Blood cultures: On June 28, Becton, Dickinson, and Company informed Yale New Haven Health of a shortage of blood culture bottles, forcing the health system to reduce blood culture testing. The health system created a Care Signature Pathway to address the variation in stewardship for blood cultures, including appropriate reasons to do blood cultures, appropriate intervals for blood cultures, and protocols for conducting blood cultures such as the amount of blood required. Within three days, the health system reduced blood culture utilization by 65%.
Implementing Care Signature Pathways
When a Care Signature Pathway is developed, the primary goals of the health system for introducing them to clinicians are to achieve rapid change in clinician behavior and rapidly institute standardized practice to improve operations, throughput, quality, and safety, Balcezak says.
"Each one of those factors is intimately integrated with one another," he says. "You don't get high-quality and safe care without efficient, streamlined, and standardized operations. They go hand-in-glove."
Clinician adoption has a generational element, Balcezak says.
"Clinicians have changed over time," he says. "Today's generation of clinicians is much more likely to accept suggestions and Care Signature Pathways. In the 1990s, you would hear clinicians say, 'I do not accept cookbook medicine.' Today's physicians realize that standardization is not cookbook medicine—it is best practice."
The potential to make the lives of clinicians easier is a powerful incentive for clinicians to adopt the pathways, Balcezak adds.
"Clinicians are much more likely to accept a Care Signature Pathway because it gives them answers right at the time they are seeing patients, and pathways make it easier to do the right thing and harder to do the wrong thing," he says.
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.
The older adult population is growing sharply, and patients over the age of 65 are high utilizers of healthcare services. CMOs must be 4 steps ahead.
With older adults constituting the majority of patients in U.S. hospitals, it is essential for CMOs to be four steps ahead, says the CMO of Burke Rehabilitation Hospital in White Plains, New York.
As we know, the number of Americans who are 65 or older is sharply rising and is expected to increase from 58 million in 2022 to 82 million by 2050. During this period, the share of the total population of Americans who are 65 or older is expected to increase from 17% to 23%.
Members of this segment of the population are high utilizers of healthcare services, which makes adoption of age-friendly care at health systems and hospitals imperative, says Mooyeon Oh-Park, MD, MHCM, senior vice president and CMO at Burke.
"We need to think about who is using healthcare," Oh-Park says. "The vast majority of people using healthcare services are older adults."
At Burke, 72% of patients are 65 or older.
In 2023, Burke joined the Age-Friendly Health Systems movement, which is led by the Institute for Healthcare Improvement and The John A. Hartford Foundation in partnership with the American Hospital Association and Catholic Health Association of the United States. The movement is designed to accelerate and spread evidence-based care for older adults. A primary goal of the movement is to push adoption of four evidence-based elements of high-quality care for older adults, known as the 4Ms: medication, mobility, mentation, and what matters most to older patients and their families.
"Using the 4Ms of age-friendly care developed by IHI is improving outcomes for older adult patients," Oh-Park says.
According to Oh-Park, patient experience scores at Burke have improved significantly since the hospital adopted the 4Ms.
Age-friendly care innovations
Burke has launched several innovations to support age-friendly care over the past two years, Oh-Park says.
One innovation is use of CatchU, which is a digital app developed by neuroscientists at Albert Einstein College of Medicine. The app focuses on assessing the risk of falls among Burke's older adult patients and older adults living in the community, Oh-Park says.
For people to be able to move around without falling, they are constantly integrating visual stimulus and the feeling on the bottom of their feet. People react to that stimuli, which is why they do not fall. A person's ability to integrate multiple stimuli can predict future falls, according to Oh-Park.
"The CatchU digital app can measure how well a person can integrate multiple stimuli," Oh-Park says. "Based on the results of these measures, we can make a recommendation such as whether a person needs more balance exercise or needs counseling to avoid falls."
Another age-friendly care innovation that Burke has adopted does not involve technology. In inpatient rooms, the hospital has hung a "Get to Know You Board." Patients are asked to post things that could be a surprise to know about them such as what makes them happy, Oh-Park says.
"Within a couple days after admission, patients list things about themselves on the board," Oh-Park says. "It is a tool to develop a relationship with the patient and to recognize what is important to them, which is one of the four primary elements of age-friendly care."
Challenges of providing age-friendly care
Age-friendly care involves implementation of evidence-based practice, says Oh-Park, adding that high-quality implementation is always challenging, especially in complex clinical settings.
"One of the greatest challenges is bringing everybody on your staff on the same page and maintaining the initial excitement about age-friendly care," according to Oh-Park. "Then you must continue the momentum. Learning how to overcome these challenges is extremely rewarding for an organization, and it requires leadership skills and creativity."
Monitoring mentation is an example of an element of age-friendly care that requires all members of a clinical staff to be on the same page, Oh-Park says.
When older patients are admitted to Burke, they may be confused because of anesthesia, medication, or the unfamiliar environment, according to Oh-Park. To make sure the confusion is not related to an underlying condition such as dementia, the hospital has provided education about mentation to physicians, nurses, and other clinical staff.
"We can change medications or be on the lookout for a developing infection or dehydration," Oh-Park says. "Identifying changes in mentation requires everybody to be on the same page, including doctors, nurses, physical therapists, and family members."
Physician reimbursement from Medicare decreased 29% from 2001 to 2024, according to the American Medical Association.
The proposed 2.8% physician payment cut in the 2025 Medicare Physician Fee Schedule is not sustainable, the CMO of a New Jersey-based health system says.
On July 10, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule for the Physician Fee Schedule that would reduce the conversion factor for physician reimbursement from $33.29 this year to $32.36 next year. The conversion factor is the number of dollars assigned to a relative value unit (RVU), which is a key element of physician payment by Medicare.
If the payment cut is adopted in the 2025 Physician Fee Schedule final rule later this year, it would be the fifth consecutive year that physicians experienced a reimbursement cut from Medicare.
Physician reimbursement from Medicare decreased 29% from 2001 to 2024, according to the American Medical Association.
The proposed 2025 reimbursement cut would have a significant negative impact on health systems, hospitals, and physician practices, says Andy Anderson, MD, MBA, executive vice president and chief medical and quality officer at RWJBarnabas Health.
"The cost of healthcare is rising," Anderson says. "There is clearly inflation in our economy, and having the reimbursement go down is absolutely the wrong direction. The Physician Fee Schedule model is not sustainable if the reimbursement is going to be cut. Reimbursement needs to keep pace with inflation and the cost of healthcare."
Medicare physician payment cuts are hitting the bottom line of healthcare organizations, according to Anderson.
"It handcuffs our health systems and hospitals to make the investments they need to make in infrastructure as well as to provide a fair wage to employees including physicians," Anderson says. "These reimbursements cuts are not going to help healthcare grow over time."
To cope with the reimbursement reduction trend, health systems, hospitals, and physician practices must reduce costs and find efficiencies, Anderson says, adding that these efforts include stewardship of services and resources, such as laboratory tests, radiology tests, and pharmaceuticals.
"We need to question ourselves and make sure we are using our resources judiciously," Anderson says.
According to Anderson, another area where health systems and hospitals can contain costs is throughput—moving patients through hospitals as efficiently as possible.
"Some of that is through better discharge planning," Anderson says. "Some of that is through better throughput in our emergency rooms. We need to focus on throughput efficiency while being safe at the same time."
In addition to proposing a 2.8% physician payment cut next year, CMS predicts that the Medicare Economic Index, which is the measure of physician practice cost inflation, will increase by 3.6% in 2025. The gap between the reimbursement cut and inflation places a significant financial burden on healthcare providers, according to Anderson.
"Medicare needs to match inflation with reimbursement and to make sure that this gap is not widening," Anderson says. "It is creating stress points financially on our healthcare system, and that is not a sustainable model."
JP Valin, MD, MHA, is chief clinical officer of Intermountain Health. Photo courtesy of Intermountain Health. 
Connie Savor Price, MD, is CMO of Denver Health. Photo courtesy of Denver Health.
Susan Bray-Hall, MD, is the new CMO of VA Rocky Mountain Network. Photo courtesy of VA Rocky Mountain Network.
