Ongoing workforce challenges have led to declining staffing ratios and high labor expenses for medical groups, a survey from the American Medical Group Association (AMGA) found.
The 2022 Medical Group Operations and Finance Survey reflects data from more than 24,000 healthcare providers across 5,600 clinics.
The findings indicated that staffing ratios have declined while staffing expenses have increased. Medical groups saw an 11.3 percent decrease in clinical staffing full-time equivalents (FTEs) on a per-provider basis compared to pre-pandemic levels. Positions with a high turnover risk, such as medical assistants, saw a more significant decrease.
As staffing shortages worsened, overall staffing expenses increased by 15 percent. Patient volumes rebounded from the early months of the pandemic, but the workforce did not.
“The changes in staffing ratios in key direct patient care roles highlight the ongoing challenges faced by medical groups as they have managed the volume recovery post-COVID without the same staffing resources to provide care,” Rose Wagner, RN, MHS, FACMPE, consulting chief operations officer of AMGA, said in a press release emailed to RevCycleIntelligence.com.
“This situation will force medical groups to optimize, and hopefully leverage, technology to automate their processes. They have had to learn how to operate as efficiently as possible, to work with the staff they have, while also managing higher labor costs. This trend is unlikely to change for the foreseeable future.”
In response to these staffing challenges, medical groups have increased their utilization of advanced practice clinicians (APCs). The ratio of APCs to physicians has grown for most specialties, AMGA noted.
“The use of APCs has been steadily increasing as groups try to adopt a lower cost care model in the midst of a nationwide physician shortage,” Wagner continued. “The challenge going forward will be for groups to implement a defined care model that appropriately utilizes APCs with clear delineation of duties between the APC and the physician.”
Profits per physician for system-affiliated and independent medical groups improved in 2022, but system-affiliated groups saw an overall loss.
System-affiliated groups’ total loss after overhead allocations was -$188,793, compared to -$220,207 in 2021. Meanwhile, independent medical groups saw a profit of $27,781 in 2022, up from $1,127 in 2021.
The return of patient volumes also led to higher revenue for medical groups. In particular, primary care physicians benefitted from the revenue increases due to the work relative value unit (wRVU) weight changes CMS implemented in 2021. The agency increased wRVUs for common office and outpatient evaluation and management (E/M) services.
“Improving medical group financial performance is an incredibly complex and demanding endeavor,” Fred Horton, MHA, consulting president of AMGA, said. “Over the past few years, medical groups have had to juggle the rebound in patient volume, a decrease in staffing FTEs as a result of labor shortages, CMS wRVU weight changes, and a host of other operational challenges.”
“It is important that groups evaluate this year’s results with caution. It would be a mistake to consider the last few years a stable period of time. Looking ahead, groups need to be operating as efficiently as possible amid the growing labor shortages and increasing supply costs and the continued decrease in the CMS conversion factor.”
Data from the Medical Group Management Association (MGMA) revealed that medical groups have considered limiting the number of new Medicare patients and reducing clinical staff to keep finances afloat amid upcoming Medicare payment cuts.
Healthcare organizations struggled financially during 2022, and experts project that the challenges will continue this year. Rising costs and workforce shortages caused the number of healthcare bankruptcies to increase by 84 percent from 2021 to 2022, research showed.
Source: Revcycle Intelligence