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Healthcare in 2023: Staffing is still the biggest challenge for practices as financial worries grow

MGMA Stat - September 21, 2022

Budgeting

Recruitment & Hiring

Compensation & Benefits

Chris Harrop
The people who make medical practices run are at the heart of successful operations — take even a few of them away and things can get messy. Case in point: The effects of the Great Resignation were already the biggest challenge facing medical groups in an MGMA Stat poll from last year.

“Demand on our providers exceeds their ability and capacity,” one practice leader told MGMA. “They are asked to show up in ways that limit their ability to feel successful at work.”

While staffing remains a major issue for medical practices heading into 2023, a host of competing hurdles have crept in to disrupt everyday operations in healthcare.

A Sept. 20, 2022, MGMA Stat poll confirms that staffing (58%) remains the greatest challenge for medical practices heading into 2023, ahead of:
  • Expenses (20%)
  • Revenue (17%)
  • Technology (2%)
  • Other (2%).

The poll had 673 applicable responses.

Staffing

“Finding capable, dependable staff to assist our doctors caring for patients” remains a crucial task for many medical group leaders, as one poll respondent told MGMA, noting the many hours spent calling, interviewing and training candidates for jobs, only to have some newly hired workers leave within the first 90 days, especially among medical assistants (MAs) — a position that remains perhaps the most difficult to recruit in healthcare today outside of physicians.

Independent practices especially are finding it difficult to compete with new-hire incentives in markets where they compete with hospitals and health systems. “Good people are hard to find and afford — inflation and wages are up but reimbursement goes down,” another practice leader told MGMA. “How are practices supposed to thrive?”

At the same time, those practice leaders are increasingly mindful of the strain on longtime workers. “Staff who have remained throughout the pandemic are very burned out,” another practice leader said. “Rapid turnover adds to the issue.” One recent poll found that 4 in 10 medical groups had a physician leave or retire early in 2022 due to burnout, and the strain is being felt by administrators: 80% of healthcare leaders reported their level of stress or burnout increased in 2022.

Expenses

As MGMA members have told us during the past year, the cost of just about everything has gone up: Nine in 10 medical practices reported their costs were rising faster than revenue in a June 21, 2022, MGMA Stat poll. Just as staffing is seen as the biggest challenge for the year ahead, the resulting impacts are seen in rising labor expenses:
  • Raising wages was the top tactic for addressing staffing, per an April 12, 2022, poll.
  • Improved benefit offerings to be competitive with other employers have also added to expenses.
  • Almost three in four (73%) medical groups are planning 3% or higher merit or cost-of-living increases for support staff in 2023, per an Aug. 16, 2022, poll.

Elsewhere in the tightening budgets of medical groups, a July 5, 2022, MGMA Stat poll found that drug supplies, IT, facilities and administrative supplies have been the largest increases in non-labor expenses this past year.

Despite some recent breaks in rising gas prices, many consumer goods and medical supply costs remain elevated over their pre-pandemic levels, and several items are still back-ordered:
  • More recently, items such as lidocaine and lidocaine with epinephrine have become difficult to obtain based on syringe shortages, manufacturing delays and increased demand. All told, the Food and Drug Administration (FDA) says there are 124 drugs currently unavailable in the United States. (Click here for the full list of FDA-reported drug shortages.)
  • Many pharmacies in the past week reported shortages of Moderna’s updated COVID-19 booster doses following a production factory going offline.
  • Medical device manufacturers are still working to update their outsourcing strategies, choosing “nearshoring” — shifting labor to Latin America, Mexico and the Caribbean as opposed to Asia — to shorten their supply chains.

As noted in a May 2022 Forbes report on supply-chain snags, the prevalence of just-in-time ordering versus stocking up on certain items can have major impacts when disruptions occur: “There are probably hundreds of outages of items that we order that do not come in,” Lori Lee, senior vice president of clinical operations at Yale New Haven Health, told Forbes.

Revenue

The downstream effects of those staffing challenges and rising expenses typically can’t be solved simply by tightening the budgetary belts; growing existing sources of revenue and building new ones will go a long way in helping medical groups that report having difficulty collecting on older patient balances and receiving payment from patients covered by high-deductible health plans (HDHPs) as consumer prices rise elsewhere in the economy and strain personal finances.

Many practice leaders told MGMA that prior authorizations, claim denials and long waits for appeals are hampering efforts to provide timely care and get paid for it. Others noted that they are adjusting their hiring plans for the coming year based on planned cuts to Medicare reimbursement and stagnant rates from commercial payers.

“If revenue was higher, we would be able to combat the cost of increased expenses, staffing and technology,” one practice leader said. “But without the revenue, we will not have the ability to keep up.”

Technology

The question of whether your current systems are adequate is difficult to answer, as updating to a new EHR or practice management (PM) system can be a tall order involving virtually all areas of the organization.

But even for those medical groups that are hoping to make upgrades or just growing more quickly than their present technology can handle, lingering supply chain issues are limiting the availability of new electronic equipment, and experts believe these shortages will continue into 2023.

Other

Beyond a series of practice leaders who chose the “other” answer to suggest “all of the above,” several respondents noted big challenges looming with:
  • Adapting to changes in E/M coding
  • Building new business lines
  • Maintaining/updating health insurance offerings for employees.

JOIN MGMA STAT 

Our ability at MGMA to provide great resources, education and advocacy depends on a strong feedback loop with healthcare leaders. To be part of this effort, sign up for MGMA Stat and make your voice heard in our weekly polls. Sign up by texting “STAT” to 33550 or visit mgma.com/stat. Polls will be sent to your phone via text message. 
 
Do you have any best practices or success stories to share on this topic? Please let us know by emailing us at connection@mgma.com.

About the Author

Chris Harrop
Chris Harrop
Senior Editorial Manager MGMA

Chris Harrop, senior editorial manager, MGMA, serves as editor of MGMA's flagship print publication, MGMA Connection magazine, and oversees various association content publications while also serving as a contributing author for the organization. Prior to MGMA, he was managing editor of multiple news organizations in the Denver metro area. Email him.

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