The experience of a Western Pennsylvania health system shows that a focused effort to optimize the use of advanced practice providers (APPs) can yield millions in increased revenue and operating margin opportunities — which can contribute significantly to a successful recovery from the COVID-19 crisis.
As hospitals and health systems plan for post-COVID-19 recovery, their focus will be on optimizing care delivery and lowering expenses while increasing revenues to help ensure financial sustainability. Enhancing the use of existing resources will be a critical part of organizations’ plans for the recovery.
Rather than simply returning to “business as usual,” organizations will need to make financial and operational improvements to adapt to the changed environment after COVID-19, including taking steps to optimize the clinical workforce and care delivery models. And as part of this effort, leaders should make it a priority to reassess the role of APPs, given these practitioners’ extensive training, broad skill sets and ability to adapt to different practice settings.[a]
Before the pandemic hit, many hospitals and health systems were beginning to prioritize the optimization and engagement of their APPs to enhance access and improve the cost of care. As one of the fastest growing segments of the healthcare workforce, APPs constitute, on average, more than one-third of a U.S. healthcare provider organization’s clinical workforce.[b] Moreover, in response to COVID-19, more than three-quarters (78.6%) of organizations are redeploying or plan to redeploy APPs to front-line specialties as a result of clinical staffing shortages in critical departments.[c] This trend is a clear indicator of the important role this workforce can play in helping their organizations achieve care delivery goals in times of crisis.
Despite the significant growth in APP workforce, however, healthcare organizations all too often have not seen reciprocal gains in revenue and access. Without corresponding increases in patient volume or revenue, operating margins cannot sustain any unsupported cost.
The disconnect between APP staffing and performance has several primary causes, including:
- Inefficient care delivery
- Underutilization of the APPs
- Redundancy in tasks between physicians and APPs
- Misalignment of physician and APP compensation plans
Nonetheless, when leveraged effectively, APPs can provide a significant return on investment (ROI) in the form of additional operating margins from existing resources without the added expense. For hospitals, achieving such an ROI from their APP workforces is important at any time, but it is now critical for them as they begin their recovery from the COVID-19 crisis. The road to successfully optimizing an organization’s APP workforce begins with developing and implementing an intentional strategic plan and framework, whose elements are outlined in the sidebar below ("4 elements of an APP workforce strategy").
Case Example: Excela Health
The effective pursuit of an APP workforce strategy is exemplified by Excela Health, a three-hospital system in Greensburg, Pennsylvania, with more than 550 physicians and 150 APPs across 35 clinical specialties.
Like many healthcare organizations, Excela was adding APPs to help provide clinical coverage and improve access. Excela recognized that despite the rapid growth of the APP workforce over the previous five years, many APPs were being underutilized in their current roles. This disconnect was due to a lack of a comprehensive workforce planning process and clearly defined APP work expectations when the APPs were hired. The underutilization was affecting not only financial performance but also the ability to recruit and retain APPs.
Excela’s leadership realized that the organization’s inability to tap into the full potential of its current APPs was undermining its current recruitment efforts and ability to increase job satisfaction and retention within its APP workforce.
Committed to getting ahead of the extraordinary pace of change in healthcare, Excela developed and implemented new structures and processes to expand support for the APP workforce, with three broad primary objectives:
- Defining and communicating consistent work expectations for APPs
- Clarifying their role on the care delivery team
- Enhancing the environment for all clinicians
Excela assembled a steering committee of key stakeholders to perform a comprehensive review of its current APP workforce practices. Included on the committee were the chief human resources officer, the COO of the medical group, the chief medical officer, service line leadership and four practicing APPs to represent each major specialty area. Support from finance included:
- Quantification of operating margin and revenue opportunity
- Data extraction for financial modeling
- Post-project financial and metric monitoring
The process was conducted in three phases over a six-month period:
- Assessment and education
The assessment and education phase included internal surveys and interviews with practicing physicians and APPs to understand their perceptions of the APP culture, utilization and the practice environment. The committee also reviewed cash compensation levels, pay practices and work-effort expectations, and compared the findings with market benchmarks.
Important findings included the following:
- About 77% of the APPs had been working at Excela for less than five years.
- The external turnover rate was 11% (compared with 10% nationally) and the internal turnover rate was very high, at 18.3% (compared with 6.3% nationally).
- Only 38% of APPs perceived themselves to be utilized to their maximum potential.
- Physicians perceived that APPs could have a significant impact on patient and organizational outcomes.
- Work expectations for APPs were not clearly defined.
- Despite regular market assessments, compensation had fallen behind local competition and included inconsistent incentive opportunities.