Todd Shryock

Hospitals, health systems, and physician practices all had an unfavorable mix of volume, revenue, and expensed that continued through the third quarter, marking a year-long trend of negative margins, according to data from Kaufman Hall.

“Health systems are starting to get a clear picture of what service lines have a positive effect on their margins and which ones are weighing them down,” said Matthew Bates, managing director and Physician Enterprise service line lead with Kaufman Hall, in a statement. “Without a positive margin there is no mission. Health systems must think carefully and strategically about what areas of care they invest in for the future.”

The median year-to-date operating margin index for hospitals was -0.1% in September, for a ninth straight month of negative actual operating margins, according to findings in the latest 

, the median investment/subsidy per provider full-time equivalent (FTE) reached $227,282 in Q3 2022, slightly up from the second quarter and returning physician practices to a trend of increasing investments/subsidies after a temporary decrease in Q2. Investment/subsidies remain well above where they were at this time last year, with Q3 2021 median investment/subsidies per provider FTE of $190,608.

The average patient length of stay remained steady from last month, with adjusted patient days and emergency department visits both dropping 3% from August. Operating room minutes decreased 5% from last month, hurting hospital revenues. Adjusted discharges were also down 3%, with a slight increase (1%) in observation days driving the drop in discharges. In total, discharges were down 3% from August.

Physician practice volumes increased in Q3, but not enough to outpace expenses. Net patient revenue per provider FTE increased slightly from Q2 to Q3 2022, reaching $389,017 in Q3, driven by increases in net patient revenues in medical specialties and primary care. Expenses outweighed volume and revenue increases, however, with total direct expense per provider at $626,120, up slightly from Q2 and up 9% from Q3 2021.

 total expenses dropped slightly in September, down 1% from August, but are up 3% from September 2021 and are up 8%

“Heading into the final quarter of the year, hospitals and physician practices have had little reprieve during a very 

 from a financial perspective,” said Erik Swanson, a senior vice president of Data and Analytics with Kaufman Hall, in a statement. “Hospitals and physician practices could climb back into the black by the end of the year, but it is looking less and less likely as months of negative margins continue to pile up.”

The National Hospital Flash Report draws on data from more than 900 hospitals from Syntellis Performance Solutions. The Physician Flash Report draws on data based on more than 200,000 providers, also from Syntellis.

This article originally appeared on Medical Economics®.

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Declining volume and revenue with increasing expenses mean many systems are ending the year in the red.

Hospitals, health systems, and providers having one of the most difficult financial years on record

If doctors want to deliver a positive patient experience, it starts with scheduling of appointments, according to a study commissioned by 

 was an important element in the patient experience, and nearly half say it is the most important.

 to patients, but patients are still relying on human-driven interactions by phone or at the front desk at a time when staffing challenges abound, according to the report. While scheduling and patient engagement technology are widely available to provider groups and many have implemented them, patients have yet to widely adopt them.

Approximately two-thirds of provider groups rely on phone calls and/or use automated phone calls to communicate with patients prior to appointments

60% of provider groups send mass patient messages, and about half send targeted/segmented messages

84% of providers say patients still schedule care with the front desk

73% of patients still call to cancel or reschedule an appointment

“Provider groups overwhelmingly understand the need for automation and digital tools to improve the patient experience—especially as they face unprecedented staffing challenges,” said Jeff Gartland, CEO at Relatient “The key for them is identifying and investing in solutions that alleviate staffing challenges while providing an experience consumers will embrace and use.”

Staffing challenges impact both staff and patient experience, according to the provider groups surveyed:

35% report negative impact on staff morale

18% report longer wait times for patients

16% report negative impact to patient experience

39% report it takes more than four weeks to onboard new staff

In addition, provider groups cited managing provider preferences as the number one driver of patient scheduling challenges. Notably, 86% of respondents said their organization still relies on staff knowledge or offline resources to manage rules and preferences—as opposed to leveraging an intelligent scheduling platform.

The survey of 359 individuals in c-suite, executive and other senior positions was commissioned by Relatient and conducted by the Medical Group Management Association (MGMA) in August 2022.

Report shows providers embraced technology solutions, but patients have not.

Patient experience partly driven by quality of scheduling options

Hospitals and health systems are boosting retention efforts, according to 

Kaufman Hall’s 2022 Healthcare Performance Improvement Report.

 With stiff competition for candidates, 100% of respondents say they have adopted some type of recruitment and retention strategy, with 98% reporting raising starting salaries or minimum wage, and 67% seeing wage increases of more than 10% for clinical staff.

“Long-term staffing shortages create bottlenecks in patient care and increase inpatient length of stay, leading to higher costs and poorer outcomes,” said 

 Managing Director Lance Robinson, leader of the firm’s performance improvement practice, in a statement. “For the rest of 2022 and beyond, hospitals and health systems need to prioritize building out retention strategies and transitioning away from unsustainable levels of contract labor to more stable staffing.”

Kaufman Hall experts say that the pandemic may be a turning point for health care and pre-pandemic patient 

 may never return. Innovations in care that have emerged and been refined over the past two years have only accelerated the larger trend of patients preferring to receive care in 

 centers, online, or in the comfort and convenience of their homes.

“Healthcare leaders must navigate short-term challenges that continue to pressure revenue and expenses, while also adapting organizational strategy to match larger transformations in the way care is delivered,” said Robinson.

In addition to retention efforts, 46% identified labor costs as their greatest opportunity for cost reductions, compared to 17% who said that last year. The workforce crisis extends to performance on volume and revenue, with two-thirds of respondents indicating that staffing shortages required them to run at less than full capacity over the past year.

Supply chain issues are also continuing, with 71% reporting distribution delays.

The only area that showed significant volume improvement over last year’s survey was oncology, with 40% of respondents saying that volumes were at 100% or more of pre-pandemic levels.

The report is based on survey responses from 86 hospital and health system leaders nationwide, including representatives from all regions of the country as well as from urban, suburban, and rural markets.

Almost all respondents report raising wages to boost retention, according to a Kaufmann Hall report.

Hospitals implement retention strategies to stave off staffing shortages

 on Medicare Advantage says that most of the large insurers in the program have been accused of fraud.

Insurers are accused of making patients appear sicker than they actually were to boost pay by looking for old illnesses in medical records and paying bonuses to doctors to add illnesses to patients they hadn’t seen in weeks.

 is a private sector alternative to traditional Medicare and more than half of Medicare patients will be in the program by next year.

 insurers have submitted inflated bills. Four of the five largest players—UnitedHealth, Humana, Elevance, and Kaiser—face federal lawsuits alleging that efforts to overdiagnose their patients crossed the line into fraud. The fifth company, Aetna, told investors its practices were also being investigated by the Department of Justice.

AHIP, the industry trade group for the insurance companies, said the accusations reflect missing documentation rather than fraud, and the 

 reported that insurers dispute the federal allegations and were aiming to improve care by documenting more conditions to accurately reflect a patient’s health.

 plans typically earn twice as much gross profit than other types of insurance.

, the most common allegation is that the insurers did not correct potentially invalid diagnoses after becoming aware of them. At Anthem, for example, the Justice Department said “thousands” of inaccurate diagnoses were not deleted. According to the lawsuit, a finance executive calculated that eliminating the inaccurate diagnoses would reduce the company’s 2017 earnings from reviewing medical charts by $86 million, or 72 percent. The company said that the government is holding it to standards not grounded in statuatory and regulatory rules.

Report from New York Times says most large insurers in the program have been accused of fraud.

NYT: Medicare Advantage rife with fraud

 from the University of Colorado and Johns Hopkins University on the prior authorization process for 

 plans identified several areas for improvement.

The study, published in JAMA, examined the benefits and problems with prior authorizations, which 99% of MA plans use for at least some medical services. The goal of prior authorization is to ensure appropriate use criteria are met and the right care is provided to the patient to reduce unnecessary spending. This also can benefit the patient through reduction in premiums and lower out-of-pocket costs through better care allocation and reduced denials. The study also notes that when applied to medications, prior auths can provide an additional level of safety review.

On the other hand, patients must content with inappropriate denials due to omissions or errors in the medical record, or inappropriate application of clinical practice guidelines. An HHS report in 2018 found that 56% of audited MA contracts inappropriately denied prior auth requests. Approximately 75% of audited denial appeals were successful, raising concerns that MA plans were denying services and payments that should have been approved, according to the report.

Prior auths can also cause delays in care, which for serious conditions, can cause possible harm to the patient, according to the report. Prior auths create a substantial administrative burden, with 93% of physicians reporting care delays and 82% reporting abandonment where the patient does not follow through because of 

 policies, and can contribute to physician burnout.

Because of these issues, the report notes that calls for reform have resulted in 

 to establish requirements for MA plans with respect to the timeliness and efficiency of prior auths.

The report outlines the following proposed measures that may help improve the use of prior authorization in Medicare:

Plans should use an electronic-based prior authorization process with time-bound requirements for initial and appeal decisions.

Plans should be mandated to report guidelines used to make prior authorization decisions and seek input from respective medical societies and stakeholder groups on an annual basis.

In addition, to expand the congressional legislation, the following proposed measures could be considered:

The relative benefits and costs of prior authorization should be reviewed by the CMS at the procedure level. Such review could consider evidence from other care rationing mechanisms, including price. All else equal, unnecessary care is less of a concern in clinical scenarios for which demand is inelastic and there is little price sensitivity (eg, high-cost chemotherapy when there is not a lower-cost alternative). In such cases, restrictions on access due to prior authorization will introduce little change in wasteful or unnecessary care while still generating additional administrative costs.

Medicare Advantage insurers should report approval and denial rates annually to the CMS based on beneficiary sociodemographic characteristics and by procedure type so that the CMS can monitor whether prior authorization policies may be increasing disparities in access to care.

Drawing upon MA insurer–submitted data on denial rates, the CMS should audit the denials of plans with high-denial rates. Setting thresholds for audit could be based on a comparison with other MA plans, as well as in consultation with patient, caregiver, clinician, and insurer stakeholders.

The authors conclude that “by improving transparency and accountability of the process, prior authorization can better function as a tool to improve high-value care for Medicare beneficiaries.”

Study looks at how prior auths help and hurt health care - and how they can be made better.

How to improve the prior authorization process for Medicare Advantage

Patients want to hear from their doctors, but there are so many scam callers posing as health care providers that they won’t answer unless the phone number is identified, according to a new 

 users about their communication preferences with their health care providers.

 callers has led to increased customer financial loss, decreased trust in phone calls, and increased frustration from patients who view unknown phone calls as a negative characteristic. In fact, 80% of those surveyed said they would consider rating a health care provider poorly for making unidentified calls, while 93% say they want to hear from their doctor, especially regarding urgent matters, and 94% said they were more likely to answer a call from a provider if the number was clearly identified.

Although there are other ways to communicate with patients, such as online portals, most respondents prefer to get a phone call from a medical center or health care professional. More than nine in 10 people say they want a call from their doctor, pharmacy, or other provider. Only 7% of respondents said they didn’t want a call from their provider for any reason.

The top five reasons patients want a phone call from their doctor, as identified in the survey:

Many calls from doctor offices go unanswered or straight to voicemail, meaning important information isn’t being conveyed to the patient. But if people say they prefer phone calls, why aren’t they answering?

According to the survey, the simple answer is they don’t know who is calling. More than three in four people (76%) say that they’ve ignored or declined a call from a health care provider because they didn’t know it was them calling. A similar percentage (74%) believe they’ve received a health care-related scam call, and more than half (52%) say they’ve received more scam calls this year compared to a year ago. This is a major factor in why people won’t answer calls they don’t recognize.

This article was published by our sister publication Medical Economics.

Survey shows that patients are dealing with so many phone scams that they miss calls from their doctors because the number isn’t identified.