Over the last few weeks, I have found these industry news stories that should be of interest to healthcare finance professionals.
- Despite a steady decline in the number of omicron cases throughout the country since mid-February, stories about nursing and other clinician shortages and high levels of burnout among healthcare professionals continue to make headlines.
- Civica, the drug manufacturing consortium founded in 2018 by health systems and other stakeholders, has announced plans to enter the insulin market.
- Medicare Advantage now boasts 28 million participants, or 45% of all Medicare beneficiaries.
1. Nationwide shortages of healthcare professionals drag on as burnout levels continue to spike
Stories about nursing and other clinician shortages and continuing high levels of burnout among healthcare professionals continue to make headlines even weeks after the beginning of the decline in omicron cases throughout the country.
“Heading into the third year of a wearying pandemic, America's health care workers report significant levels of burnout and even anger about the complications of politics and rising incidents of abuse from patients and their families,” a Feb. 22 USA Today article reported.
According to the findings of a USA Today/Ipsos poll:
- 80% of healthcare workers report being “somewhat” or “very satisfied” with their current job
- 73% agree with the statement, “I love working in healthcare”
- 52% report feeling “burned out”
- 23% say “they are likely to leave the field in the near future”
The poll was conducted Feb. 9-16 and was based on a sample of 1,170 healthcare workers.
According to a March 9 Yahoo! Finance article, “Demand for registered nurses will continue to grow by 5% in the next five years. As shortages persist due to resignations and retirement, employers will need to not only recruit 1.1 million new nurses by 2026 but retain their existing staff.”
Results of another survey “found that nurses continue to be affected by effects of the pandemic” and that “many” of the 229 nurses who responded to a questionnaire were experiencing burnout, according to a March 2 TriangleNewsHub.com article. The survey, which allowed participants to remain anonymous, was conducted in February by the North Carolina Nurses Association.
“Some hospitals have done a better job than others at mitigating the burnout that’s come with the two years of surging workloads,” wrote author Rose Hoban.
Preventing burnout less costly than the status quo
Hoban quoted Jane Muir, a nurse researcher from the University of Virginia, saying, “Those hospitals that have taken the time and expense to prevent burnout likely saved money.”
According to Muir’s findings, “Hospitals looking to prevent such fatigue among their staff nurses spend on average $11,592 per nurse per year to prevent the exhaustion, Muir found,” the article states.
“Those costs include measures such as spending more on full-time staff to share the load, creating programs to improve patient safety and the quality so nurses feel like they’re providing better care, providing opportunities for professional development for nurses and increased vacation time,” wrote Hoban.
But hospitals that “stayed with the status quo … ended up spending about $16,736 per year on their nurses,” wrote Hoban. Reasons for the higher cost were:
- Higher turnover rates
- Cost to recruit new nurses
- Training new hires
- Cost of “expensive fill-in nurses”
Hospitals facing shortages of PCPs and pharmacy techs too
Hospitals are contending with turnover in many other areas as well. The cost of primary care physician (PCP) turnover was the topic of a study published Feb. 26 in Mayo Clinic Proceedings, while an article about the nationwide shortage of pharmacy technicians was featured in the March issue of HFMA’s hfm magazine.
PCP turnover. Troubling, too, are the predictions of physician shortages to come.
“The United States could see an estimated shortage of between 54,100 and 139,000 physicians, including shortfalls in both primary and specialty care, by 2033,” wrote Patrick Boyle, the author of an Association of American Medical Colleges report published June 26, 2020.
“The pandemic, which struck after the projections were completed, magnifies the need to address shortfalls in both primary care doctors and specialists,” added Boyle.
The authors of the recent Mayo Clinic Proceedings article wrote: “11,339 PCPs are expected to leave their current practice each year,” with the majority of departures consisting of general internal medicine practitioners (4,370/year) and family medicine doctors (3,624/year).
The estimate of physicians exiting the field is based on “published data on intent to leave practice by specialty within primary care and the conservative estimate of 25% turnover among those who express an intent to leave,” wrote the study authors.
Pharmacy tech shortage. “What’s causing the shortage? In addition to the … heavier workloads and burnout, circumstances largely outside the control of employers of pharmacy technicians have contributed to the problem,” wrote Ken Perez, the author of the hfm article, “Healthcare assailed by a labor crisis, with pharmacy technicians particularly affected.”
Perez wrote: “At the October 2021 meeting of the Autonomous Pharmacy Advisory Board, virtually all chief pharmacy officers on the board reported they were struggling to staff enough pharmacy technicians.”
While retailers such as Walmart and Amazon have increased entry-level salaries, “the U.S. average hourly wage for pharmacy technicians in retail pharmacies is about $16, which gives them a reduced incentive to resume work in this area,” wrote Perez. And given “the average pharmacy’s pretax profit margin was just 1.51%,” there is “little or no room for increasing wages.”
2. Civica says it will start manufacturing insulin, with an eye toward bringing down prices
A new initiative from the drug manufacturing consortium Civica, Inc. represents an effort to tackle the price of insulin, a vexing issue for many consumers.
Civica, which is governed by leading health systems, payer representatives and philanthropies, plans to manufacture and distribute insulin that it says will be available “at significantly lower prices” than current alternatives.
In a news release, Civica stated that in 2024 it will begin manufacturing three insulin products — glargine, lispro and aspart, which are biologics corresponding to, and interchangeable with, Lantus, Humalog and Novolog, respectively.
Civica will “co-develop and manufacture the drug product, complete the clinical trials and file the necessary applications for FDA approval,” the company stated. The recommended consumer price will be set at no more than $30 per vial or $55 for a box of five pen cartridges.
By way of comparison, Civica alluded to GoodRx price data listing the least expensive pharmacy prices for the respective brand-name drugs as $195 for Lantus, $43 for Humalog and $59 for Novolog as of March 9 (in the last case, the price applied only when presenting a coupon at Walgreens pharmacies, with other pharmacies charging $120 or more).
“Civica plans to sell its insulins at one low, transparent price for all, basing the price on the cost of development, production and distribution,” according to the news release.
Manufacturing will take place at a 140,000-square-foot plant being built in Petersburg, Virginia, according to Civica. The facility is expected to be operational in early 2024.
The facility “will ultimately have the capacity to produce a substantial amount of the insulin needed in the United States, with additional space to increase production, if necessary,” the news release states. Glargine is projected to be available for purchase in early 2024 pending FDA approval, with the other insulin products to follow.
— Nick Hut, HFMA senior editor
3. Medicare Advantage is now 45% of all Medicare enrollment
Medicare Advantage “now boasts 28 million participants, [who] represent 45% of all Medicare beneficiaries,” according to a new report by The Chartis Group.
“This marks a +3% point improvement in penetration over 2021 and a total program enrollment growth of +9%,” wrote the report’s authors. “These results reflect the strong value proposition of Medicare Advantage products and the industry’s sustained push to create new value for its consumers. With this growth, we continue to see a shifting competitive landscape for health plans that administer these products.”
Some of the most notable trends, according to the authors, include the following:
Medicare overall enrollment continues to grow, up 1 million this year. But growth has slowed compared to years past, much of which is likely attributable to COVID-19 deaths among those ages 65 and older. There were 300,000 deaths per year in 2020 and 2021 for people in that age group.
The Medicare Advantage market added 2.3 million lives at the expense of 1.3 million Original Medicare lives. This contraction in Original Medicare enrollment and shift to Medicare Advantage is the highest it has ever been. The 45% share of Medicare beneficiaries enrolled in Medicare Advantage is up from 42% last year and 37% in 2019.
Nonprofit and Blue-branded health plans (referred to as “Blues” in this report) continue to cede share to for-profit health plans. This year, nonprofit and Blues plans shrunk to 18.2% and 10% of the market, respectively. For-profit plans now represent 71.8% of all beneficiaries. Even in their home states, Blues plans continue to cede share to other plans, with their in-state share declining from 15.4% to 13.9% since 2019.
HFMA bonus content
- Read the article, “CMS's overhaul of the Direct Contracting program draws praise from supporters of value-based payment,” by Nick Hut, senior editor with HFMA.
- Listen to the latest “Voices in Healthcare Finance” podcast where HFMA President and CEO Joe Fifer interviews Jason Wolf, president and CEO of The Beryl Institute, about the importance of remembering the "human experience" in all aspects of healthcare.
- Register for HFMA’s Annual Conference to be held June 26-29 in Denver and virtually.