The Detroit-based health system leader suggests a blend of solutions to tackle the labor shortage challenges in healthcare.
Amid a challenging financial climate riddled with labor shortage issues, Henry Ford Health CFO Robin Damschroder says the healthcare industry's best path forward is to "get back to basics" while continuing to innovate.
Though the COVID-19 pandemic is no longer at its peak, several challenges that were either created or exacerbated over the past two years remain for hospitals, physician groups, and payers. The labor shortages, in particular, have caused financial strain for healthcare's decision-makers. But there are strategies that CFOs can implement to alleviate the burden.
Blended strategy
Like many other health systems, Henry Ford Health's 2021 numbers veered closer to surviving rather than thriving. It posted a consolidated operating loss of $168.2 million for year end, representing an operating margin of -2.5%. Much of that loss was due to COVID-19-related costs and medical claims for the Detroit-based system, an integrated healthcare network that operates five acute-care hospitals, two psychiatric hospitals, the Henry Ford Medical Group, Health Alliance Plan of Michigan, and a network of ambulatory centers, health clinics, home-based care, and retail-oriented services.
For Damschroder, the path to thriving is all about a balanced approach.
"I've been at this for 30 years and this is unprecedented. We all have to get back to basics," Damschroder told HealthLeaders. "With the up and down volatility that comes with the COVID waves, we've got to learn to manage that within our capacity and throughput. Now that we've been through it, we have to start to shift from the volume being pandemic to more endemic."
COVID and its variants are just part of what's plaguing health systems.
"The biggest short-term burden out there, hitting the entire nation, is the labor shortage," Damschroder said. "In healthcare, it's not just created by the Great Resignation. We're watching people retire and leave the workforce, just due to burnout. Our most significant concern for the short term and long term is for our people."
For Henry Ford Health, Damschroder says the best approach to the situation will be a blend of the old and new—a reinvestment in people combined with an embrace of technology.
As a more traditional approach, Damschroder points to strategies Henry Ford Health has used in the past.
"Like many, we're recruiting nurses from the Philippines," Damschroder said. "We've done this two other times in the past 30 years and it's been successful. That initiative has started, and we expect by September to have 100–150 of those nurses here. It will probably be a two-year plan to get all those slots filled."
She added: "And just like everyone, this was a wake-up call for employers about what employees want in flexibility around their time and flexibility around which benefits to choose. We've had a lot of studies going into how do you respond to the different [perspectives] … in your organization, as well as to the different generations and needs [of] people. We've learned that you've got to create greater flexibility."
As far as an innovative solution, automation has the potential to play a significant role.
"There are certain jobs that are probably going to go away because we don't have people to do them. So how do we use technology to fill that gap?" Damschroder said. "We have a real opportunity to redesign our care models and our roles."
According to a study by the U.S. Government Accountability Office (GAO), patients face greater challenges with receiving approval for mental health services than medical services.
The demand for mental healthcare is on the rise, but even those with coverage are experiencing difficulties accessing services, a new study by GAO found.
One of those hurdles is prior authorization, which is less likely to be granted for mental health hospital stays compared with medical and surgical hospital stays, according to the study.
For the report, GAO interviewed federal officials and representatives from 29 stakeholder organizations representing consumers, health plans, providers, insurance regulators, and mental health and Medicaid agencies.
Sixteen of the 29 stakeholder organizations pointed to non-quantitative treatment limitations (NQTLs) used by health plans as causing delays in accessing mental health treatment or limiting time spent in treatment. Prior authorization, in particular, was highlighted as a challenge by representatives from most of the organizations.
"In some cases stakeholders said that health plans are applying these limits to consumers' mental health benefits in more restrictive ways than to medical and surgical benefits, which highlight ongoing mental health parity issues," the study stated.
Aside from mental hospital stays being less likely to be granted, other examples of prior authorization issues cited by the representatives in the report included:
Denial rates were slightly higher for inpatient pre-authorization for mental health services compared to medical and surgical benefits, according to officials from one insurance regulator
Private health plans and Medicaid plans said they wouldn't cover mental health inpatient treatment any longer, even if the physician determined that additional treatment was needed, according to representatives from a health system that provides mental healthcare
Whether it's in mental or medical healthcare, prior authorization continues to be a source of consternation. While physicians and medical groups agree that streamlining the administrative process can significantly cut down on delays and restrictions in care, implementing a regulated method brings its own set of challenges.
When it comes to mental health, however, the GAO report states that the parity laws in place should be requiring that mental health treatment is no more restrictive than coverage for medical or surgical treatment.
"Within their parity oversight responsibilities, the Department of Labor and the Department of Health and Human Services are taking steps to enhance their oversight of the use of NQTLs in mental health coverage, which, according to these officials, could improve access to mental health care," the study concluded.
The widely-used EHR company Epic has developed a customer management system and is building a best practices app after coming out with new software.
Following its recent release of new software, Epic is continuing to push healthcare technology with more launches to improve patient communication and resources for independent medical groups.
The EHR company just introduced Cheers, its first-ever customer relationship management system for health systems and is close to unveiling Best Care for My Patient, an app for physicians to research best practices for patients, according to Madison.com.
The new developments come on the heels of Epic announcing Garden Plot, a new software to streamline access to its suite and keep patient records for smaller, independent medical groups.
Garden Plot was conceived after the American Medical Association found that nearly half of physicians worked in independent medical groups in 2020. These finidings marked the first year that less than half of doctors (49.1%) worked in a practice wholly owned by physicians. For comparison, 60.1% of physicians worked in a private practice in 2012.
With challenges increasing and incentives dwindling for physicians choosing to be independent over working at hospitals and health systems, Epic's new technology aims to address a need for all clinicians.
"We've always been really good at helping clinicians keep record of patient care," Epic director of clinical informatics Jacqueline Gerhart told Madison.com. "What we are trying to do… is take that to the next level. It's not just about having information but using that information for good… from access to care, to figuring out the (health) ecosystem around the individual and bringing that all together."
Cheers, which is reportedly being used by dozens of organizations and will ramp up over the next year, allows providers to better connect with their patients.
Sam Seering, Epic's product manager, told Madison.com that the technology can send out communication like emails, text messages and calls through Epic's MyChart app if a particular kind of care is needed. It can also pull up a caller's record by connecting to an organization's phone system.
Best Care for My Patient, meanwhile, will be populated by Cosmos, a dataset with over 135 million patient records and 2.2 billion clinician visits, Gerhart told the news outlet. The app is reportedly expected to launch in the next year to year-and-a-half.
Advancements in EHR technology should allow physicians to spend less time dealing with billing and regulations and more time with patients providing necessary care.
The pandemic accelerated the trend of healthcare moving into outpatient care settings, forcing health systems to look for tactics to maintain their bottom line.
The pandemic has created a multitude of challenges for hospitals, but an increased shift toward lower-cost outpatient or in-home care is threatening organizations' revenue growth and margins, according to new research by Moody's Investors Service.
Traditionally, inpatient care revenue has been the measure of presence and market share in the industry for hospitals and healthcare systems.
Between a rise in telehealth and fewer emergency room visits, [[{"fid":"12399","view_mode":"default","fields":{"format":"default"},"link_text":"the report","type":"media","field_deltas":{"1":{"format":"default"}},"attributes":{"class":"file-default media-element","data-delta":"1"}}]] finds that traditional hospital-based care is becoming less of the norm, as outpatient revenue has exceeded inpatient revenue in the past few years.
Though this trend has been prevalent for years, COVID-19 has caused an acceleration, with Moody's identifying changes in reimbursement models, risk-sharing, investment in outpatient services, and advances in drugs and medical devices as contributing factors.
Telehealth boomed in the early stages of the pandemic, increasing 63-fold during 2020, according to the Department of Health and Humans Services data cited by Moody's. While telehealth hasn't sustained that usage as in-person visits have returned, it will continue to be an access point many patients opt for, particularly for certain specialities, the report said.
At-home acute care models are also expanding, with many hospitals and health systems striving to provide services in patients' homes. In May 2021, Kaiser Permanente and Mayo Clinic invested in Medically Home to help systems reinvent their method of delivery of complex care.
"These models would allow some providers, such as critical-access hospitals, to reduce inpatient beds and costs but allow others, such as academic medical centers, to increase inpatient capacity where needed," Moody's said.
Mayo, Kaiser, and Medically Home, along with 11 nonprofit health systems, launched the Advanced Care at Home Coalition in October 2021 to extend telehealth and remote services.
Moody's reports that hospitals are also investing in outpatient services such as ambulatory surgery centers (ASC). Several nonprofit hospital systems have already created partnerships to develop or expand their ASCs, like Allina Health System joining Optum's Surgical Care Associates, and Ascension Health working with Regent Surgical Health.
Meanwhile, multiple for-profit systems, like Tenet Healthcare's United Surgical Partners International and Envision Healthcare's AmSurg, are among the largest ASC consolidators, putting them ahead of nonprofits in certain markets.
Key findings
Additionally, Moody's points to several other factors that will play significant roles in the shfit to outpatient care.
Reimbursement changes to hospitals. Payers will continue to incentivize providers to offer less expensive outpatient care, potentially further restricting hospital care with denials of coverage.
CMS' decision. By removing certain orthopedic and cardiac procedures from its inpatient-only list, CMS is further driving treatment to hospital-based outpatient departments or ASCs. CMS also introduced hospital penalties for excessive readmissions for certain conditions, as part of the 2010 Affordable Care Act.
Advances in drugs and medical devices. The need for hospitalizations will reduce as new orthopedic technology bolsters outpatient procedures.
Looking ahead
In the immediate future, however, many hospitals will see a greater demand for inpatient services due to higher-acuity patients who delayed care during the pandemic, Moody's said.
Long term, the hospitals best positioned to sustain demand for inpatient services will be those that focus on quaternary and tertiary care, such as academic medical centers. Moody's also views markets as a factor, with hospitals in regions like Florida, Texas, Arizona, Utah, and Idaho likely continuing to experience strong overall volume.
The company, which is used by more than 1,000 hospitals and health systems, is focusing on offering end-to-end revenue cycle management.
nThrive is changing its name to FinThrive as part of a rebrand to further commit to end-to-end revenue cycle management for hospitals and health systems.
The software-as-a-service platform, which is already used by more than 1,000 hospitals and health systems, announced that the name change is reflective of its aim to offer a more efficient approach to the administrative process.
"For healthcare to realize its true potential, revenue cycle management software needs a new vision," said Hemant Goel, president and CEO of nThrive. "The future of the healthcare economy requires a connected and holistic approach."
"We are challenging the status quo and envisioning a better way to optimize healthcare revenue and the patient experience," continued Goel.
nThrive's rebrand comes on the heels of its acquisition of TransUnion Healthcare, the healthcare data and analytics business of TransUnion. By combining its claims and contract management, front-end capabilities, and workflow for acute and ambulatory providers with TransUnion's social determinants of health data and insurance discovery, nThrive wants to offer complete end-to-end revenue cycle management solutions.
nThrive also signed an agreement to acquire PELITAS, a leading provider of healthcare patient access, digital patient intake, and front-end revenue cycle management software solutions.
Automation has the potential to play a larger role in revenue cycle management for hospitals and health systems, with the benefits apparent from both an efficiency and cost-savings perspective.
With this, utilizing revenue cycle management software is becoming more of the norm for organizations.
As Elizabeth Woodcock, medical practice and revenue cycle management expert, previously mentioned to HealthLeaders, by automating time-consuming processes such as intake, consent management, payments, and scheduling—and turning those tasks over to patients—medical practices and health systems can also alleviate their hiring challenges and boost staff efficiency without adding new employees.
Automating tasks within the revenue cycle can also help ease employee burnout and increase retention by opening up staff time to concentrate on higher-value tasks, including focusing on the patient experience.
The National Hospital Flash Report found minimal improvement from January to February as most hospitals suffered margins decline for the month.
Hospitals continued to feel the adverse effects from the omicron variant in February as operating margins remained in the red for a second consecutive month, according to a new National Hospital Flash Report from Kaufman Hall.
While COVID-19 cases and hospitalizations significantly decreased from the all-time highs of January, the report found that challenges with labor shortages and global supply chain led to high hospital expenses in comparison to prior years.
The key data points from the report on February, which is based on data from more than 900 hospitals, include:
The median Kaufman Hall Operating Margin Index for hospitals was -3.45% in February, up from -4.52% in January "but still below sustainable levels." Despite the improvement in median actual margin index, most hospitals reported margin declines for the month.
The median change in operating margin was down 11.8% from January, while the median change in operating EBITDA margin fell 7.5% month-over-month.
Patient days decreased 13.3% and the average length of stay was 5.3% less month-over-month. Surgery volume experienced a moderate rise as "some patients returned for nonurgent procedures that were delayed during the omicron surge," with operating room minutes increasing 6.5% from January.
Gross operating revenue dropped 7.4% and outpatient revenue decreased 5% from January. Inpatient revenue suffered significant decline, falling 19.3% after a nearly 3% increase in January due to record volume.
Hospital total expense per adjusted discharge was down 4.5%, labor expense per adjusted discharged fell 6.1%, and non-labor expense per adjusted discharged declined 3.6% from January. However, total expense per adjusted discharge rose 10.4% and non-labor expense per adjusted discharge increased 8% compared to February 2021. Lower staffing levels were offset by wage competition, which drove up labor expense per adjusted discharge 15.3% year-over-year.
"2022 is off to a very difficult start for our nation's hospitals and health systems," Erik Swanson, senior vice president of data and analytics with Kaufman Hall and the author of the report, said in a statement. "Margins, revenues, and inpatient volumes declined for most organizations in February, while outpatient care signaled only slow returns. The metrics indicate a challenging recovery from the omicron surge in the coming months."
The HHS points to expanded overage and lower healthcare costs in the first year of the Biden Administration.
On the 12th anniversary of the Affordable Care Act (ACA), a new report by the U.S. Department of Health and Human Services (HHS) details record-setting enrollment under the Biden administration.
Overall, 14.5 million people signed up nationwide for healthcare coverage—a 21% increase from the previous year—while nearly six million new customers joined as part of the special enrollment period and the open enrollment period during the first full year of the Biden administration, according to the report.
Additionally, the HHS highlighted that 2.8 million more consumers are receiving tax credits to assist with coverage premium costs in 2022 compared to 2021, as a result of President Biden's American Rescue Plan (ARP).
"On the 12th Anniversary of the ACA, it is clear that the Affordable Care Act and the American Rescue Plan are working to expand access to healthcare coverage and have been critical to advancing health equity," CMS administrator Chiquita Brooks-LaSure said ina statement.
"The Biden-Harris administration's ARP subsidies were successful and ensured that more marketplace consumers than ever had access to quality, affordable healthcare, and the peace of mind that comes with having healthcare coverage that best fits their needs."
The ARP has helped lower healthcare costs for many, according to the HHS report, with four in five people able to find a plan for $10 or less per month. After the ACA subsidies during the open enrollment period, 28% of enrollees can select coverage for $10 or less. Absent the ARP, the average monthly premium after tax credits would have been $59 per month higher.
Following the implementation of the ARP and the 2021 special enrollment period, the uninsured rate reportedly fell to 8.9% for the third quarter, down from 10.3% for the last quarter of 2020.
Meanwhile, 18.7 million adults are now covered across 39 states through Medicaid expansion, according to the report.
"President Biden promised to build on the success of the Affordable Care Act, and just one year into his administration, we have already broken records with all-time high enrollment numbers and all-time low prices," said HHS secretary Xavier Becerra. "We will continue working to deliver on that promise until we make healthcare a right for all."
In a letter to the Office of the National Coordinator for Health Information Technology (ONC), the American Hospital Association (AHA) commented on prior authorization rulemaking.
The AHA is stating its support for streamlined prior authorization to the ONC but wants the division to test any potential changes in standards before applying regulations in the administrative process.
While acknowledging the negative effects prior authorization can have on providers and patients, the AHA urged in a letter to Micky Tripathi, national coordinator for health information technology, that the ONC be cautious as it attempts to create solutions.
In January, the ONC released a request for information to seek comment on electronic prior authorization standards, implementation specifications, and certification criteria to help potential future rulemaking.
"The AHA strongly supports the creation of a useable, scalable, and efficient solution to help reduce prior authorization impacts on patients and providers," the AHA wrote. "However, we urge ONC—in collaboration with CMS—to pilot the technologies and workflows described in the rule prior to taking any regulatory steps, including certification or codification of standards to minimize unintended negative consequences, such as an inadvertent increase in costs or burden in the health care system."
Arguably the most significant deterrent of prior authorization is the potential for delay in care. The AHA cited a recent physician survey conducted by the American Medical Association (AMA) in which 93% of respondents said prior authorization led to delayed patient access to necessary care.
Losing time to the approvals process is not an option for many patients who could be at risk of worsening conditions or serious adverse events like hospitalization, disability, or even death.
Though standardizing prior authorizations could combat those concerns, the AHA also offered additional reform: an increase in oversight over health plans, applying prior authorization to services with high costs, and the requirement that plans process prior authorizations around the clock.
Providers, meanwhile, face their own set of challenges when it comes to the administrative process. The AHA once again pointed to the AMA physician survey, highlighting that 88% of respondents described the burden associated with prior authorization as high or extremely high.
To both improve patient care and curb provider burnout, the AHA stated their support for the adoption of electronic prior authorization. From strictly a resources perspective, the 2021 CAQH Index found that automation of prior authorizations had a cost savings opportunity of $437 million annually.
Incorporating new technology, however, can be a resource-intensive process for hospitals and providers, the AHA argued. Premature implementation of new solutions that have yet to completed and tested is also a concern.
As such, the AHA recommended that prior authorization solutions be fully developed and tested prior to the creation of any regulations. Pilot testing and real-world analysis would be essential to not only ensure the changes in the process are working as intended but create data that proves to providers that those changes are worthwhile.
Ultimately, improving prior authorization has the potential for widespread benefits, but the method and application require thoughtfulness.
"In order to effectively update and create standard transactions without unduly burdening healthcare payment processes, regulators should approach potential changes judiciously," the AHA concluded. "Any substantial change in the technology and/or standards used in healthcare information exchange should be sufficiently tested to ensure functionality, analyzed to establish projected return on investment, and incorporated according to an appropriate glide path to minimize systematic disruption."
The American Hospital Association (AHA) is asking to mandate waiving the administrative process during public health emergencies (PHE) as patients suffer from delays in care.
The AHA is urging CMS to require Medicare Advantage (MA) plans to waive prior authorizations during PHEs so care can be streamlined when it is most necessary.
While CMS encouraged MA plans to waive the administrative process during the COVID-19 pandemic, the AHA detailed in a letter to CMS administrator Chiquita Brooks-LaSure the importance of working with Congress on a mandate to avoid similar pitfalls as experienced in the past two years.
"The continued use of prior authorization and other health plan utilization management policies by some plans throughout the pandemic exacerbated capacity issues, caused delays affecting patient care, and resulted in high rates of inappropriate denials," the AHA stated.
Concerns over prior authorization and its potential negative effects on patient care and costs to health systems are longstanding. During PHEs, however, the impact can be far more damaging as timeliness becomes a priority.
During the pandemic, the AHA noted that hospitals have faced challenges in quickly turning over hospital beds for higher-need COVID-19 patients, while transferring patients who require post-acute care (PAC) to the appropriate clinical pathways, such as long-term care hospitals (LTCH) or inpatient rehabilitation facilities.
When prior authorization was not waived in these instances, it often resulted in patients forcibly staying in acute care settings as they awaited discharge and beds not being given to higher-need patients.
The AHA also cited inconsistent use of prior authorization during the pandemic, as some plans waived the process during the initial stages before expiration, while other waivers excluded certain provider services.
According to the AHA, MA plans offered less flexibility with waivers compared to Medicaid plans, even when certain insurers operated both a MA and Medicaid plan. MA plans that did not waive prior authorizations during the pandemic took approximately three days to respond to a request for PAC, based on AHA's members estimate, with the total turnaround time potentially increasing by several days for denials and appeals processes.
Speaking to a larger trend, the AHA pointed to one multi-state member reporting that MA prior authorization denial rates for their LTCHs were significantly higher in 2021 and 2022, compared to before pandemic. Though CMS encouraged MA plans to relax prior authorization requirements, some plans have seemingly gone the opposite direction with an increase in denials.
"Prior authorization processes have exacerbated workforce challenges and contributed to physician and other staff burnout during the PHE," the AHA wrote. "Hospitals often have multiple full-time employees whose sole role is to manage health plan prior authorization requests. These staff often are physicians and nurses who have been diverted from patient care."
While the AHA recognizes the utility of prior authorizations, it concluded in the letter that MA plans would substantially improve pandemic responses through prior authorization waivers.
"Urgent and continued action is needed to ensure that health plans' administrative processes do not impede patients' ability to receive timely, quality, medically necessary care in clinically appropriate downstream settings," the AHA said. "This is more important than ever as we continue into our third year of a global pandemic, fighting new variants and surges, administering additional vaccine doses, addressing workforce shortages, and maintaining critical testing and treatment capacity."
The large insurer claims GS Labs charged more than five times the market rate for COVID-19 tests and administered additional tests to drive up the amount owed.
Blue Cross and Blue Shield of Minnesota has filed a lawsuit against COVID-19 testing laboratory GS Labs to recoup more than $10 million in alleged overpayments stemming from price inflation since the beginning of the pandemic.
The health insurer filed the complaint in the U.S. District Court of Minnesota last week, claiming the Omaha-based lab fraudulently charged more than five times the median market value for its most common COVID-19 test. Blue Cross also alleges that GS Labs administered additional tests just to increase the total amount it could charge the payer.
The price transparency requirement under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, says each COVID-19 testing provider is required to disclose specific cash prices on their website in the absence of a contractual payment agreement. According to Blue Cross, GS Labs intentionally posted inflated prices on their website with the intention of charging the payer larger amounts than what it was willing to accept from individual customers.
"It is our claim that GS Labs intentionally disregarded and misinterpreted federal guidelines for the sole purpose of maximizing profits during a public health emergency," Scott Lynch, senior vice president of pharmacy and chief legal officer at Blue Cross and Blue Shield of Minnesota, stated in a press release.
"After months of attempts at good-faith negotiations, we were unable to reach an agreement with GS Labs that would put in place appropriate COVID-19 testing practices at a fair price. It's egregious price-gouging like this that ultimately drives up the cost of health care for everyone," Lynch said.
In response, GS Labs spokesperson David Leibowitz told the Twin Cities Pioneer Press that the lawsuit amounts to “strong-arm gamesmanship” by the insurer and that Blue Cross owes the lab more than $1 million for thousands of tests.
"GS Labs has followed federal law to the letter," Leibowitz said. "Our posted cash price for COVID tests is in line with the marketplace across the U.S. and we have been paid that price or a negotiated rate by numerous insurers around the country."
GS Labs, which has eight facilities in Minnesota alone, said that its advertised cash price for a rapid COVID-19 antigen test was $179 in January, according to the report.
Blue Cross, meanwhile, stated its continued commitment to providing COVID-19 testing, treatment, and vaccines to all its members. "Since the start of the pandemic, Blue Cross has paid and processed claims for more than 3.5 million COVID-19 tests administered by thousands of different providers in Minnesota and across the country," the insurer said.