Hospital Staffing challenges CFOs face in 2023
As 2023 has begun, the healthcare industry is bracing for ongoing shortages in various sectors. A survey conducted by the Medical Group Management Association (MGMA) in September 2022 revealed that 58% of the 673 medical practices surveyed identified staffing as their primary concern heading into the new year.
This concern was significantly higher than the second-ranked concern, expenses, by a margin of 35 percentage points. Despite a 15% decrease in the number of practices that reported meeting staffing demands from a similar survey conducted by MGMA in September 2021, staffing remains a top concern heading into 2023.
Impact of labor shortage in hospitals and medical groups:
The healthcare industry is facing challenges with staffing shortages in medical billing and AR follow-up teams, which are impacting the speed and cost of collecting payments from patients. Nearly half of the respondents in a survey reported experiencing a severe shortage in their organization’s revenue cycle management (RCM) or billing department.
As a result, 50% of hospitals and medical groups have open and unfilled positions in their RCM staff. These labor shortages, combined with increasing complexity in the revenue cycle and advancements in technology, have made automation a necessity in the healthcare industry to manage administrative burdens and keep pace with rising patient volume.
Problems faced by CFOs during staffing crisis:
For example, Healthmark Regional Center in DeFuniak Springs, Florida is facing a delay in payroll obligations and employees have not received their latest paycheck. The CFO has offered a letter to staff that they can present to banks and creditors that states the delay is due to circumstances beyond their control and funding was not available to cover paychecks. The facility is closed with no inpatients, no ER, and no services except for patients getting their labs drawn. The ER closed on March 18 for renovations.
Surveys and statistical data on staffing shortages:
A report by George S. Kaufman Hall found that hospital finances are still in danger as of mid-2022. Hospitals had seen some positive signs of relief in March with increased patient volumes and revenues, and reduced expenses due to fewer high-acuity patients.
However, the report suggests that there is still a long road ahead as hospitals continue to struggle with inflation, national labor shortages, and other operational pressures. The median operating margin index was -2.43% in March and the median change in operating margin was down 48.7% compared to the previous year. The median change in operating earnings before interest, taxes, depreciation, and amortization margin declined 37.8% compared to March 202
In 2021, 333,942 healthcare providers left the workforce. 33% of physicians are over 59 years old and the average age of nurses, medical specialists, surgeons, and family medicine doctors is 57, 55, 56, and 52 respectively. Internal medicine saw the most loss in the past year, followed by family medicine and medical specialty.
The largest healthcare system has expanded by adding 10,000 beds, 35 hospitals, and 163 physician teams in the past 3 years. However, the patient volume has increased and expenses have risen, leading to negative margins for many in the first half of 2022. Relief is not expected from government payers as a July 2022 report indicates CMS is unlikely to increase rates to account for inflation, causing further compression in margins.
Automation plays an important role to eliminate staffing problems:
The healthcare industry is facing challenges with staffing shortages in their Revenue Cycle Management (RCM) teams, which leads to longer hold times for scheduling and customer service calls, increased patient billing errors, and more difficulties in handling complex tasks. Many healthcare CFOs and RCM VPs say that these challenges have led them to seek out RCM partners that can help automate repetitive and mundane tasks in order to free up remaining staff to focus on more complex assignments.
Automation can also improve the patient experience and empower RCM staff to deliver better patient outcomes. However, it’s important for hospitals and medical groups to find an RCM partner that is well-versed in both RCM operations and Robotic Process Automation (RPA) capabilities. This is especially important for practices that have a limited number of reliable in-house staff and do not want to go through the expense of hiring and training new staff.
Most financial leaders in medical practices agree that evaluating the performance of the medical billing and revenue cycle management departments begins and ends with analyzing data to determine how well the billing process, whether in-house or outsourced, is meeting expectations.
Some of evaluating and measuring methods:
- Examine insurance payments and aging reports.
- Evaluate patient payment aging.
- Rate medical billing employee productivity.
Healthcare CFOs are facing new requirements and challenges and it is important to explore strategies that can positively impact the budget. Securing budget approval on time can benefit both revenue cycle management and administrative operations. It is the CFO’s responsibility to find cost-efficient and high-quality solutions that provide a holistic approach, eliminating the need for multiple RCM service providers. Other hospital executives have found success with the services offered for revenue maximization and cost containment.