The results were released one week after a Medscape report on physician compensation.
Physician compensation rose for those in the primary care and specialty spaces in 2019, according to the 31st annual Provider Compensation and Production Report released by the Medical Group Management Association (MGMA) Thursday.
The average compensation for primary care physicians rose 2.6% last year, totaling $273,437. Meanwhile, urgent care and pulmonary specialists had the largest salary increases for physician specialists, at 6.83% and 5.51%, respectively.
The study indicated that the highest paid primary care physicians were in West Virginia, while Vermont had the lowest paid physicians in the country.
Additionally, the report found that compensation for nonphysician practitioners (NPP) rose over 2% from 2018 to 2019.
Surgical physician assistants led the way with an average annual salary of $129,183, followed by surgical nurse practitioners at $116,964 and nonsurgical/nonprimary care physician assistants at $116,656.
Despite the compensation increases over the course of the past two years, MGMA acknowledged the forward-looking uncertainty surrounding the coronavirus disease 2019 (COVID-19) outbreak.
In mid-April, MGMA survey found that nearly all physician practices have experienced a negative financial impact from the coronavirus outbreak.
"With 1.4 million healthcare workers furloughed in the last month alone, this 2019 compensation data will serve as a baseline for benchmarking 2020 operations in the aftermath of the COVID-19 pandemic," Halee Fischer-Wright, MD, MMM, FAAP, FACMPE, CEO of MGMA, said in a statement. "COVID-19 has had a dramatic impact on the healthcare industry with productivity halting for many medical practices. Compensation models will look different in the near future based on shifting productivity and demands on physicians and the healthcare industry overall."
The results were also released one week after a Medscape report on physician compensation.
Given the widespread cancellation of elective surgeries at hospitals across the country in order to handle the influx of patients infected with COVID-19, the Medscape report stated that patient volumes have declined by 60% since early March.
Physicians, which earned an average of 13% in incentive bonuses based off "patient volume and productivity," face continued challenges related to the outbreak. Additionally, Medscape found that one-in-10 physician practices have closed because of the pandemic.
Almost 30% of surveyed executives said the outbreak has increased the likelihood that their organization pursues a merger.
Nearly two-thirds of hospital executives expect full year revenues will decline by at least 15% due to the coronavirus disease 2019 (COVID-19) outbreak, according to a Guidehouse analysis of a survey conducted by the Healthcare Financial Management Association (HFMA).
The results, released Thursday morning, indicated that 20% of executives expect revenue declines of more than 30% year-over-year.
In fact, half of the respondents stated that it will likely take through the end of 2020 or longer for their organization's elective procedure volumes to match pre-pandemic levels.
Given the financial pressures on provider organizations, almost 30% of surveyed executives said the outbreak has increased the likelihood that their organization pursues a merger or a new partnership.
David Burik, partner and payer/provider consulting division leader at Guidehouse, told HealthLeaders that a more active M&A market may not result in more transactions but rather a move by providers towards growing service lines, given the importance of elective surgeries and outpatient procedures to the bottom line.
"You can expect the competition to move heavily on down that road; the organizations with means and infrastructure to take advantage of those that might have had it, might have thought they were getting it, but don't have it," Burik said. "That might be the easiest way for growing organizations to grow, rather than the older model of 'Call us when you're ready to merge and we'll figure it out.'"
The survey reiterated the belief that hospitals and health systems will be offering more telehealth services to patients than before the outbreak.
Nearly 70% of executives said their organizations will be using telehealth "at least five times more" than before the pandemic, though 33% said their organizations have "all needed telehealth capabilities."
Telehealth remains the top revenue growth area, 71%, provider organizations are eyeing going forward. However, two-thirds of health system executives anticipate service line strategies will be a revenue generator in the future, while 57% pointed to revenue cycle improvement.
Burik told HealthLeaders that the survey points to a gap between organizations that are positioned to grow in the telehealth and virtual solutions space, which will be critical as patients seek care but are wary of returning to the hospital, and those that may have capital restraints.
"All organizations will aspire to growth, but the ability to grow, the balance sheets to grow, and the infrastructure to grow will be pretty discriminating," Burik said. "Some organizations that are our positioned can turn on the switch and make it happen a lot more readily than organizations that thought they were big enough and thought they were virtual enough. Of course, for folks who were struggling before, there isn't much in this that's going to position them better."
While the survey highlights revenue growth opportunities coming out of the COVID-19 outbreak, hospitals are also looking to get a handle on historically high expenses in the face of a potential second or third wave of the pandemic.
Over three-quarters of executives stated that their organizations were focused on addressing labor costs, via "furlough, layoffs, hiring freeze, reducing hours and/or contract labor." Similarly, over 75% stated that they would focus on capital expenditures, including a "reduction in new/existing construction, acquisitions of high-cost medical equipment and technology."
Almost 70% of respondents are reviewing their purchased services, specifically at "canceling or renegotiating contracts and co-management agreements."
Forward looking, the pandemic has implications for on-site employment and where workers will be in this new normal.
Only 20% of executives expect their employees to return to work primarily on-site and over one-in-five executives have already instituted additional work-from-home options for their organizations.
Meghann Hutchison, CFO of Lovelace Medical Center, details how the organization has weathered the coronavirus outbreak and why telemedicine will be a key component of the reopening process.
While the outbreak of coronavirus disease 2019 (COVID-19) has infected over 1.3 million people and killed thousands across the country, states are beginning the process of slowly reopening for business.
Hospitals, which temporarily canceled elective procedures to meet the demand caused by the pandemic, are also coming back online, and examining the financial damage they've suffered over the past few months.
Meghann Hutchison is CFO of Lovelace Medical Center, a 263-bed hospital based in Albuquerque, New Mexico, that is part of for-profit Ardent Health Services. In a conversation with HealthLeaders, Hutchison details how the organization has weathered the outbreak and why telemedicine will be a key component of the reopening process.
This transcript has been lightly edited for brevity and clarity.
HealthLeaders: Meghann, how has Lovelace dealt with the COVID-19 outbreak and what has it required from you as a hospital leader?
Hutchison: Our priority, as I feel like it always should be, is to take care of our patients, our community, and our staff. We have solidified several different policies to ensure that we're doing that.
We have increased screenings throughout our facilities—we've got three separate buildings—[so] you have to have your temperature taken and you're asked a series of questions coming in the building at any time. We also have universal masking and we are ensuring that we're isolating COVID-19 patients and prospective patients to keep everybody safe. Safety for our team is key for us. We want to make sure that everyone has appropriate personal protective equipment (PPE), that we're following all infection control guidelines, and that we're properly training people how to don and doff with all of their PPE as they're walking into a COVID unit. We continue to do employee daily assessments, making sure if you're getting a fever, let's check you out and make sure that you're OK. If you're not and you're feeling poorly, then you go home but we stay in constant contact with you. We also have reestablished our whole ER triage systems so that we're keeping people behind the line safe through plexiglass and making sure that every precaution that we can take for our team is is being taken.
We were the first in the state to perform drive-thru testing, which I am proud of. Initially, we had specific criteria that we use to screen but, now, we're just encouraging that everybody gets tested. It's advantageous if you find out early if you've got [COVID-19]. Our leaders have collaborated with the state and other systems to prepare. We are one of three health systems in Albuquerque and all of our leaders have gotten together. None of us had an idea of what a surge in New Mexico would look like, so all of us prepared to ensure that if the highest surge were to come that we would be ready. We've made several of our nursing units have negative pressure. This assists in ensuring that the spread doesn't happen through air conditioners; that was a pretty big feat. We have an amazing maintenance guy, so he hit that early in March, which is fantastic. We've supported efforts in social distancing and even prior to any government mandates, we started ramping down our elective procedures to ensure that we were keeping our patients and our staff safe. We're also supporting the New Mexico Department of Health (DOH) and their efforts in keeping New Mexico safe.
HL: As New Mexico, like other states, reopens for business, what is Lovelace's plan to bring elective procedures and surgeries back online?
Hutchison: Well, the first thing is safety; safety first. We want to make sure that we're following all of our policies and all DOH guidelines to ensure that we're always available to care for the sickest of patients. Whether they have COVID or whether they don't have COVID, those things are key. We've got a phased approach to begin surgeries and procedures to make sure we have sufficient supplies, equipment, and staffing to provide a safe and effective environment for our patients and our staff.
I feel like we're going to be kind of ahead of the curve because in the beginning, probably around the middle of March, our providers started offering telemedicine appointments to provide patients with needed care from the safety of their own home. This has allowed us to continue to monitor and manage the care for anybody who had an upcoming procedure. We maintained contact with them, and then we're going to be able to start scheduling the procedures as soon as we can, when it's safe enough for them. We've been able to maintain that constant communication with them through telemedicine, so it's been advantageous.
HL: What is Lovelace's financial standing after more than two months into the pandemic, and how are you bolstering the organization's bottom line ahead of a second or third wave?
Hutchison: Our purpose, regardless of any time, is always to care for others in times of need. I don't think that's any different than any other healthcare providers in our community or even across the globe at this point. Our primary focus remains on meeting the needs of our patients, community, and staff during this pandemic. You're absolutely correct; COVID-19 has had a significant impact on our organization and community. We're appreciative of all the federal and state support received thus far, but healthcare providers across the nation, including us, have been impacted financially, particularly as a result of the government directives to suspend the elective surgeries, procedures, and any type of ambulatory care visits.
[However], we are trying to plan properly so that we're going to be fiscally responsible and ensure that while being fiscally responsible, we're continuing to provide quality care for our patients, and [also] protecting the safety of our community and staff. There's a lot that we look at with a fine-tooth comb and as a finance person, I'm always looking at the bottom line, but always keeping the patient's perspective in mind as my priority, because that's what's appropriate. I think that with proper planning, we're going to be all right. We'll be able to continue to care for everyone during the second and third wave, if it comes towards the fall or winter, where we've got proper segregation and great policies and controls to ensure everybody's safe.
HL: In your opinion, how has the New Mexico healthcare market handled the spread of COVID-19 and what are your expectations for what the provider market will look like in a post-pandemic landscape?
Hutchison: I believe that the New Mexico healthcare market has handled the spread of this [virus] remarkably. Like I'd mentioned, there's been a huge collaboration of New Mexico hospitals and that's been second to none. You're talking about competitors coming together and saying, 'OK, what can we do?' I think we've built lifelong relationships to ensure that we can all come together in this critical time to treat New Mexicans but, then also, it shows that we have the ability to do it quickly if something were to happen again. That's a great thing.
[For the] future, post-pandemic landscape, it's telemedicine. I think that we've experienced successes with primary care and specialist appointments, such as orthopedics or post-operation appointments, that can be done via video visits. That's convenient for patients and allows them to keep their appointment, which is key. But then they don't have to leave. They can stay at home and show the doctor through a video, 'Here's how I'm walking, here's how I'm progressing.' I think that it's a good situation and I think that telemedicine is definitely going to be in our future much more so than it ever has been.
Only Alaska and Maryland did not experience an increase in hospital expenses per visit.
Hospital expenses per visit increased over 188% in North Dakota from 2009 to 2018, the most of any state during that period, according to a QuoteWizard report released Tuesday.
North Dakota was followed by Wyoming, which saw its hospital expenses increase over 91%, Wisconsin at over 72%, and Idaho at over 66.5%.
Only Alaska and Maryland did not experience an increase in hospital expenses per visit during the analysis period, with declines of 0.62% and 7.05%.
According to the most recent data, North Dakota, Connecticut, and Oregon had the highest hospital expenses per visit in the country. On the other hand, West Virginia had the lowest hospital expenses at $1,446 per visit.
The report is another insight into the cost of healthcare in America and price variability across states.
Just over two weeks ago, the Catalyst for Payment Reform (CPR) released its report card on healthcare price transparency and awarded Maine and New Hampshire an 'A' grade, the only states to receive that distinction.
Meanwhile, 34 states received failing grades from the report, though CPR noted that "many states have made progress" since the last report card released in 2017.
The four main employer groups behind the letter are the American Benefits Council, The ERISA Industry Committee, the National Alliance of Healthcare Purchaser Coalitions, and the Pacific Business Group on Health.
Several large employer groups sent a letter to congressional leaders Tuesday morning offering recommendations to ensure access to "high quality, affordable healthcare" during the ongoing coronavirus disease 2019 (COVID-19) pandemic.
The main recommendations included in the letter are "affordable coverage in the immediate and longer term," access to primary care physicians, a halt to price gouging and surprise billing, and mitigation of risk in the insurance market.
The four main employer groups behind the letter are the American Benefits Council, the ERISA Industry Committee, the National Alliance of Healthcare Purchaser Coalitions, and the Pacific Business Group on Health (PBGH).
"The pandemic has placed unprecedented strain on our country’s healthcare payment and delivery systems," the letter read. "As Congress and the administration grapple with this rapidly evolving and highly destructive crisis, we urge policymakers to contemplate immediate and longer-term coverage policies as separate and distinct."
The letter was co-signed by over 30 groups, including the Leapfrog Group, Partnership for Employer-Sponsored Coverage, and Self-Insurance Institute of America, Inc.
The employer groups detailed specific recommendations to address coverage concerns, including bolstered subsidies for individuals receiving healthcare access through COBRA, increased access to telehealth services, and long-term health coverage that includes cost containment measures.
To ensure access to primary care physicians, the employer groups called on Congress to mandate that providers commit to not engaging in M&A activity for 12 months as part of receiving funds through the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
"These reforms are especially critical to ensuring the long-term viability and survivability of smaller physician practices," the letter read. "As these smaller practices struggle and threaten to close because of this pandemic, we fear this could exacerbate already problematic provider consolidation – giving even more market domination to physician staffing firms and other parties already positioned to command exorbitant prices."
The employer groups also urged Congress to prioritize efforts to protect patients from high costs during the pandemic.
These include a ban on "price gouging on any health care items or services," the enactment of a "local, market-based payment rate" to curb surprise billing, and the passage of policies that protect both payers and employers from "unexpected costs in the 2020 and 2021 plan years."
The economic upheaval caused by the pandemic has challenged employers dealing with unprecedented pressures to the bottom line, especially as it relates to healthcare costs going forward.
Earlier this month, a Willis Towers Watson (WTW) analysis projected that the COVID-19 outbreak might reduce healthcare costs for employers by as much as 4%.
WTW estimated that at a 10% infection level, benefit costs could rise by 1% to 3%, while a 30% infection level could see costs rise by 4% to 7%. At the highest rate included in the analysis, a 50% infection level, costs could rise between 5% to 7%.
Days before that report was released, the American Hospital Association, America's Health Insurance Plans, and the U.S. Chamber of Commerce sent a letter to congressional leaders that called on them to protect and expand health coverage for employers and workers.
While revenues fell by over 30%, expenses at Garden State hospitals rose more than 10%, according to a new report.
New Jersey hospital revenues have dropped $650 million per month due to the ongoing coronavirus disease 2019 (COVID-19) outbreak, according to a New Jersey Hospital Association (NJHA) report released Monday afternoon.
The analysis estimated that the pandemic caused the average Garden State hospital operating margin to drop from 4.3% at the start of the pandemic to negative 30%.
Additionally, while revenues fell by 32% per month, expenses at Garden State hospitals rose more than 10%, totaling $214 million per month. The report noted that these expenses do not include those "associated with hospitals’ expansion of bed capacity."
“COVID-19 is an unprecedented event for our healthcare system, and our hospitals have directed all of their resources at it, including extraordinary efforts to expand capacity that kept our state ahead of the curve,” NJHA President and CEO Cathy Bennett. “Unfortunately, that doesn’t come without risk to hospitals’ own fiscal health.”
In late March, Governor Phil Murphy issued an executive order to suspend most elective procedures at hospitals in New Jersey in order to handle the influx of patients infected with COVID-19.
Since that executive order was issued, hospitals across the state have seen volume declines for "non-COVID inpatient admissions, emergency room visits, outpatient procedures and laboratory, radiology and other diagnostic tests," according to the report.
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Hospitals account for nearly three-quarters of supply chain management market demand side, according to a new report.
The healthcare supply chain management market is expected to see its largest growth in the North American market between 2020 to 2025, according to a Research and Markets report released Monday morning.
Overall, the healthcare supply chain management market is projected to increase at a compound annual growth rate (CAGR) of 7.9% during the forecast period.
The report attributed the North American market's projected CAGR to widespread consolidation among hospitals, as well as the "rising prevalence of chronic diseases and growing awareness in the region." Meanwhile, the European market is projected to have the second highest CAGR, according to Research and Markets.
Hospitals account for nearly three-quarters of the healthcare supply chain management market demand side, according to the report.
The study is the latest examination of how the healthcare supply chain market is changing and how it effects provider organizations.
The market is expected to benefit from the increased adoption of software-based systems compared to hardware-based systems due to "the increasing number of online purchases, improving business intelligence, and growing preference for eco-friendly logistics."
Similarly, while the on-premise segment holds the largest share of the market, the cloud-based segment of the market is expected to experience the highest growth rate over the next five years.
Wasteful supply chain spending has been a growing concern for hospital leaders in recent years given that they oversee organizations operating on razor-thin margins.
Navigant, a Guidehouse company, released an analysis in November 2019 that estimated hospitals and health systems unnecessarily spent $25.7 billion on supply chain operations in 2018.
Wasteful spending on supply chain by provider organizations has increased by nearly 12% since 2017, the analysis found, with the average annual supply expense reduction opportunity rising 22.6% over the same period.
The Chicago-based provider's revenues did inch up to just north of $7.3 billion.
CommonSpirit Health reported an operating loss of $387 million in Q3 2020 as the system dealt with the financial challenges related to the coronavirus disease 2019 (COVID-19) pandemic.
However, CommonSpirit faced a serious obstacle related to the cancellation of elective surgeries and procedures due to the outbreak, which contributed to a peak of 40% patient volume declines by mid-April.
Additionally, the system reported significant costs to "secure additional supplies and personal protective equipment, increase capacity, and retain enough staff for potential COVID-19 volume surges."
In an interview with HealthLeaders, CommonSpirit CFO Dan Morissette, MBA, said that the system has already seen some recovery in its patient volumes as most of its markets have reopened for procedures that were canceled over the past two months.
Morissette added that CommonSpirit is looking to "responsibly" reopen with safeguards in place, following an approach that is consistent with state approvals. Despite the interruption to the system's care delivery process because of the crisis, Morissette said the system has seen its telehealth services grow considerably.
"One of the silver linings in a very, very dark cloud for humanity is telehealth; we have been conducting more than 40,000 telehealth visits with our consumers each week," Morissette said. "This is up exponentially from where it was before the pandemic happened. I point this out because we have sort of been pressed into doing some of the transformations around telehealth, home health, and increased advocacy at the Medicaid standpoint. These [transformations] are consistent with our push towards value-based care and community health."
Anticipating a potential second or third wave of the coronavirus in the coming months, Morissette said that CommonSpirit is examining how it handled the first wave of the pandemic and modifying its approach to serve on the frontlines for communities across the country.
"The short answer is that when you look at where we were the first time when the pandemic hit, we started shutting down," Morissette said. "Now, if you look at the second or third wave, we see it more like a dimmer switch. As our regional markets and local markets become more impacted by the continuation of this pandemic, we are prepared to dial back services there. Likewise, we are prepared to dial up services in areas that are not as impacted to try to serve the communities that we're in."
CommonSprit stated that prior to the spread of the coronavirus across the country in mid-March, the organization had been seeing "positive trends" for the first two months of 2020.
The organization recorded a total net income of $579 million during Q2 2020 and saw its EBITDA reach $528 million, an increase of 7.1% compared to Q2 2019.
Between mid-March and the end of April, Sutter's inpatient bed days declined 23%.
Sutter Health's bottom line struggled significantly through Q1 2020, due in part to the coronavirus disease 2019 (COVID-19) pandemic.
The Sacramento-based health system posted a $236 million loss from operations during the quarter, according to interim unaudited annual financials filed this week.
Sutter also posted total operating revenues of $3.1 billion, a negative operating margin of 7.4%, and a loss attributable to the organization of over $1 billion.
Meanwhile, total operating expenses topped $3.4 billion and capital spending fell sharply to $46 million.
The system suffered severe declines in its patient volumes related to the COVID-19 outbreak, which forced most hospitals to cancel elective surgeries and procedures to handle the influx of patients infected with the virus.
Between mid-March and the end of April, Sutter's inpatient bed days declined 23%, ambulatory facility volumes fell 60%, and outpatient surgical cases dropped off by 73%. Sutter added that 5,000 employees were impacted by the cancellation of elective procedures, with some working part-time hours while others were " temporarily placed in a labor pool for reassignment and retraining."
Despite the unaudited financials, Sutter stated that it is still finalizing its Q1 financial performance and that the ultimate impact of the pandemic is "not yet known."
Sutter is not the only California-based provider organization that struggled with the financial impact of the coronavirus outbreak to start 2020.
Last week, Kaiser Permanente reported a $1.1 billion net loss in Q1, owing in large part to operational costs for "surge planning, equipment, and preparations," though the company stated that these were "not significant."
Prior to the COVID-19 outbreak, Sutter reported challenges to its bottom line in recent quarterly filings.
The system also agreed to a $575 million settlement with a group of self-funded employers and the California Attorney General's office, though court approval of that settlement has not been granted yet.
The authors concluded that a reduction in drug spending "is possible within a value-based care model" reliant on evidence-based pathways.
An Illinois cancer treatment center reduced its spending on cancer drugs relative to the Oncology Care Model (OCM) by 13.5% through value-based clinical pathways, according to a study published in the Journal of Oncology Practice Friday.
From Q1 2017 to Q1 2019, Cancer Care Specialists of Illinois (CCSI) saw its median cancer drug spending increase by 18.6% compared to the OCM spending increase of 34.4%. Similarly, from October 2017 to December 2019, CCSI's pathway adherence rose from 69% to 81%.
The study sought to challenge the notion that oncologists are unable to control cancer drug spending, with the authors concluding that a reduction "is possible within a value-based care model" reliant on evidence-based pathways.
The study's authors do concede that the results are "subject to potential confounding influences that may be confused with treatment effect," as well as the fact that CCSI's "higher-than-median chemotherapy spending at baseline" could have contributed to an easier descent to median drug spend.
"Although segregating out the contribution of each of these factors is difficult, we have shown that reduction of drug spend using clinical pathways to optimize chemotherapy utilization is possible and can increase the chances of a practice’s success within the OCM model," the authors wrote.
The study's findings were released amid the ongoing coronavirus disease 2019 (COVID-19) outbreak, which has prompted healthcare stakeholders to consider the potential opportunity for alternative payment models (APM) to mitigate the damage.
Keely Macmillan, senior vice president of policy and solutions management at Archway Health, a Boston-based payment solutions company, told HealthLeaders last monththat the ongoing outbreak is an opportunity to examine how providers participating in APMs continue to deliver value-based care during a crisis.
Providers participating in APMs such as accountable care organizations, Bundled Payments for Care Improvement, or OCM already have the benefit of telehealth waivers, according to Macmillan.
Providers that have been operating under these waivers, Macmillan continued, are likely to have already established the necessary infrastructure to support telehealth services ahead of the demand surge spurred by the COVID-19 outbreak.