atarax jarabe niсos
Editor’s note: Find the latest COVID-19 news and guidance in Medscape’s Coronavirus Resource Center.
Although the second quarter of 2021 was a good one for physician groups owned by hospitals and healthcare systems, many of these practices sailed into rough seas in July when the Delta variant began to take hold in some states, according to a pair of new reports.
Kaufman Hall’s Physician Flash Report for August, based on data from more than 68,000 doctors, found that hospital groups saw improvements in physician productivity and revenue in the second quarter of 2021 compared to the second quarter of 2020 and to the fourth quarter of 2019, just before the COVID-19 pandemic began.
But those positive signs were counterbalanced by a significant increase in expenses and “continued high levels of physician investment, medicine administration abbreviations ” the report said.
“Productivity” refers to the level of physician activity, often measured by work relative-value units (wRVUs). Physician “investment” or “subsidies” refers to the amount that hospitals lose on each employed doctor, not counting the value of their referrals to hospitals.
Hospitals’ average physician investment and physician compensation per wRVU both dropped more than 20% from Q2 2020 to Q2 2021, according to the Kaufman Hall report. At the same time, physician-generated revenues and productivity jumped more than 40%, and physician-related expenses increased over 20% in Q2 this year, as patients flocked back to ambulatory care offices.
The median paid physician compensation per full-time equivalent (FTE) was $312,700 in the second quarter, up 5% from the same period in 2020. However, median compensation was down 4.6% from its level of $327,871 in the first quarter of this year.
More Work for Less Pay
Physician compensation per wRVU fell a whopping 24% from Q2 2020 and was also down 11.8% from the first quarter of this year, with declines occurring across most specialty cohorts. In addition, physician payments per wRVU were down 7.5% from Q4 2019.
In contrast, physician productivity, as measured by wRVUs per FTE, jumped 44.7% from the second quarter of last year, 10.6% from the first quarter of 2021, and 11.4% compared to Q4 2019.
Explaining why physician compensation per wRVU fell as productivity grew, Matthew Bates, Kaufman Hall’s managing director and physician enterprise service line lead, told Medscape Medical News that many healthcare systems had protected physician salaries during the earlier phase of the pandemic. “When productivity went down, they didn’t necessarily decrease the compensation as much as the volume decrease would have otherwise driven them to.
“As volume has gone back up, compensation has lagged productivity. One reason why physician comp per wRVU is down is that comp tends to lag the actual production. You might have worked really hard in Q2 and generated more wRVUs, which is the primary driver of variable comp for physicians. But that’s paid out on a quarterly basis. So we’d anticipate that money to be paid out in the third quarter,” Bates said.
Expenses Grow Across the Board
Net revenue per physician FTE increased with higher patient volume and physician productivity. But total direct expense per physician FTE was up 21.3% from Q2 2020, rose 3.9% from Q1 2021, and was 11.7% higher than in Q4 2019.
There were several reasons for this rise in practice costs, Bates said. In the category of “shared costs,” such as human resources, parking lots, and revenue cycle departments, healthcare systems allocate expenses to physician groups on the basis of their billings at the time the bills go out. As patient volume increased, so did the allocation of shared costs, he said.
Some healthcare systems temporarily stopped allocating these shared costs to physician practices because of low levels of productivity earlier in the pandemic, Joshua Halverson, principal and division lead, ECG Management Consultants (ECGMC), told Medscape Medical News.
“There just weren’t patients coming through the system. As patients come back to the physician practices, those overhead allocations increase, either formulaically or because they’re now reallocating those costs,” he explained.
Other expenses, such as the cost of supplies and labor, have shot up over the past 18 months, Bates noted. For example, the prices of gloves and masks skyrocketed when they were in short supply last year, but the prices haven’t come down as fast. Many hospitals and practices are now paying $1 for a pair of medical gloves that used to cost 5 to 10 cents. An N-95 mask that used to go for a quarter now costs $2.
Labor costs have also grown significantly, and not only for nurses, Bates said. The front-desk receptionist who used to earn $14 an hour now wants $18 an hour, because the local fast-food franchise is paying that much to attract employees.
Through the second quarter, patient volume and revenues of hospital-owned practices rebounded significantly from their earlier downturn. But in July, as the fourth wave of COVID emerged, the picture began to darken.
Kaufman Hall’s Hospital Flash Report for August, in contrast to the physician report, analyzes data for the period from January to July of this year. “While outpatient revenue for January–June 2021 increased 10% vs. 2019 and 21.6% YTD versus 2020, it was down 2% from June to July,” the report notes. “The drop signals a break in growth trends seen in outpatient care in recent months, potentially reflecting the initial impacts of patients delaying elective care due to the delta variant.”
Bates sees a direct connection between the pressure of the COVID-19 surge on hospitals and the impact on their physician practices. “In Missouri, Alabama, Texas, and Louisiana, where there was a huge spike in Delta cases in July and August, hospitals have seen an impact on their ability to provide ambulatory services, because their systems are dealing with the COVID surge,” he said.
Financial Impact on Physicians
Both Bates and Halverson said that many hospitals in the affected areas are postponing or canceling elective surgeries and diagnostic tests, as they did during the initial phase of the pandemic.
Some states, such as Texas, Florida, Missouri, and Louisiana, are asking hospitals to postpone elective services so that they can prioritize the care of COVID patients, Bates said.
Besides the financial effect of these policies on physician practices, hospitals are reallocating the work of some physicians to cope with the Delta surge. “Some hospitals are asking internists and pulmonologists to come in and help take care of COVID patients. That has had an impact on those doctors, who are primarily clinic based,” Bates said. “While it’s good they’re helping out in hospitals, their productivity and the profitability of their practices has been affected.”
Halverson pointed out that the financial impact of the latest COVID wave varies by specialty. Surgeons are most affected by the postponement of procedures, he said, whereas critical care specialists and hospitalists are as busy as they can be, and some are getting bonuses. Primary care doctors are reverting to virtual visits and other approaches for part of their practices.
Noting that ECGMC works with many large, independent, multispecialty and single-specialty groups, Halverson said, “Independent practice is under intense financial challenge, and many groups have sold themselves to hospitals or private equity firms.
“But there have been some good positive stories. The volume has bounced back quicker than some groups imagined. The large practices are doing fairly well. The small practices are challenged, because they react very quickly to changes in volume.”
For more news, follow Medscape on Facebook, Twitter, Instagram, and YouTube.
Source: Read Full Article