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California Doles Out $300 Million in No-Interest Loans to Save its Financially Struggling Hospitals

State’s new program helps ensure local communities have access to a community hospital and its physicians and clinical laboratories

Like phoenixes rising from ashes, a number of bankrupt and shuttered California hospitals have new life due in part to a state-run program offering the healthcare providers interest-free loans. The medical staff in these hospitals—including the clinical laboratories—will be happy to learn that their local communities refused to let their preferred healthcare providers shut down and disappear.

California’s Distressed Hospital Loan Program, operated by the state’s Department of Health Care Access and Information (HCAI) and the California Health Facilities Financing Authority, is making awards of nearly $300 million in no-interest loans to 17 healthcare providers, an HCAI news release announced.

“The program, established through Assembly Bill 112, offers interest-free, working capital loans to nonprofit and publicly operated financially-distressed hospitals, including facilities that belong to integrated healthcare systems with less than three separately licensed hospital facilities,” according to the news release.

This clearly demonstrates that even as both physicians and patient are increasingly comfortable with telehealth consultations—and having their healthcare conditions managed in ambulatory settings—the concept of the community hospital as an essential medical resource continues to motivate local governments and citizens to invest money in money-losing hospitals.

Elizabeth Landsberg

“Today we have provided much needed assistance to community hospitals across the state that desperately need financial help to provide the care their communities need,” said HCAI Director Elizabeth Landsberg (above). “I’m grateful to the legislature for spearheading this effort to help make sure these vital healthcare institutions are fiscally stable so they can continue to provide quality, affordable healthcare for all Californians.” Thanks to these loans, clinical laboratories in these hospitals will continue to perform critical testing for their communities. (Photo copyright: Gilbert Perez/HCAI.)

Providers Get Support with Conditions

Among the 17 healthcare providers receiving loans is Madera Community Hospital, a 106-bed hospital that served a rural area in California’s Central Valley. Madera, which closed in December and filed for Chapter 11 bankruptcy earlier this year, is one of 17 “troubled hospitals” in California getting a “lifeline,” KFF Health News reported.

Madera will receive a $2 million bridge loan earmarked toward operational costs. It is also eligible for a $50 million loan once Adventist Health, Madera’s intended new administrator, offers up a “comprehensive hospital turnaround plan,” HCAI noted.

“California hospitals face many financial challenges, and for independent rural hospitals, these challenges can sometimes be almost insurmountable,” said Kerry Heinrich, JD, President and CEO of Adventist Health, in a blog post leading up to the state’s announcement of loan awards. “If Madera succeeds in getting the financial resources it needs, Adventist Health will provide Madera Community Hospital with the expertise of a large healthcare system, helping to secure a sustainable future for healthcare in Madera County.”

It’s interesting to note that potential “operators” are watching to see if the hospital or State of California can arrange tens of millions of dollars in loans or other financing before they agree to come in and manage the hospital. 

The Distressed Hospital Loan Program aims to provide “loans (repayable over six years) to not-for-profit hospitals and public hospitals, as defined, in significant financial distress or to governmental entities representing a closed hospital to prevent the closure or facilitate the reopening of a closed hospital,” according to California Assembly Bill 112.

“The hospitals approved for this program have shown a detailed plan for financial recovery, and these funds will help them keep the doors open so they can keep serving their communities,” Fiona Ma, CPA, California State Treasurer, told Cal Matters.

Also receiving financial support is Beverly Hospital, a 202-bed Montebello, California, provider set to be purchased by Adventist Health White Memorial of Los Angeles, Cal Matters reported.

Beverly Hospital received a $5 million bridge loan to use toward operation costs while it is “purchased out of bankruptcy,” HCAI said in the news release.

Another hospital getting a “lifeline” is Hazel Hawkins Memorial in Hollister, California. The 25-bed level IV trauma center will receive a $10 million loan.

Other Ailing Hospitals Getting Interest-free Loans

According to HCAI, the other 14 hospitals receiving loans include:

What Led California’s Hospitals to Financial Hardship? 

According to Cal Matters, hospitals in California are “distressed” due to rising labor costs and inadequate reimbursement from Medicare, Medi-Cal, and commercial insurance.

In addition, the COVID-19 pandemic had a “staggering” impact on California hospitals’ financial health, Kaufman Hall reported in its April “California Hospital Financial Impact Report.”

The consulting firm’s report also found:

  • One in five California hospitals is at risk of closure due to “an unsustainable combination of negative margins, decreasing cash positions, and increasing debt.”
  • Hospital expenses in 2022 were $23.4 billion over pre-pandemic levels, outpacing revenue increases.
  • Operating income in 2022 was $8.5 billion less than in 2019.

Will Consumer Demand Affect California’s Success?

California’s commitment to its financially struggling hospitals comes amid national trends suggesting physicians and patients—especially younger healthcare consumers—are becoming increasingly comfortable with remote healthcare monitoring and receiving primary care in non-traditional environments, such as retail pharmacies and clinics.

In “Survey Indicates Zoomers and Millennials Are Ready for Pharmacies to Play a Bigger Role in Their Primary Care,” Dark Daily reported how demand for low cost, convenient access to doctors and drugs is driving transformation to decentralized medical care, and how retail pharmacy chains are seeing opportunity in offering primary care services.

Will younger Californian’s demand for low-cost, convenient healthcare render the state’s attempt to rehabilitee its failing hospitals moot? Time will tell. The ongoing financial woes of California hospitals will be watched by hospital-based clinical lab managers and pathologists in other states. That’s because California has a reputation for being first in the nation in attempts to address problems or regulate activity.

Regardless, it’s clear that—at this moment—the state is willing to invest in hospitals with a history of deteriorating financial performance as a way of ensuring access to healthcare for all of its citizens.   

Donna Marie Pocius

Related Information:

California Offers Lifeline to 17 Troubled Hospitals

California Announces $300 Million in Financial Support for Community Hospitals Across the State

Assembly Bill 112

Adventist Health to Manage Madera Community Hospital

California Bails Out Distressed Hospitals, Offers Interest-Free Loans to 17 Troubled Providers

San Benito Health Care District Receives Letter of Intent

California Hospital Financial Impact Report

Survey Indicates Zoomers and Millennials Are Ready for Pharmacies to Play a Bigger Role in Their Primary Care

Some Experts Predict That Nonprofit Healthcare Models Will Not Survive Healthcare’s Transformation

As mergers and acquisitions of large-scale hospital systems continue, their clinical laboratories feel the pressure of deteriorating finances and ongoing staff shortages

Eroding economics is often the major reason why a health system agrees to be acquired or merged. And, as we reported in “Hospital, Health System Mergers and Acquisitions Impact Clinical Laboratories,” these mergers and acquisitions are occurring at an alarming rate.

In response to the latest National Hospital Flash Report from Kaufman Hall, the financial/performance consulting firm’s Senior Vice President, Eric Swanson, wrote that 2022 was “shaping up to be one of the worst financial years on record for hospitals.

“Expense pressures—particularly with the cost of labor—outpaced revenues and drove poor performance [in hospitals]. While emergency department visits and operating room minutes increased slightly, hospitals struggled to discharge patients due to internal staffing shortages and shortages at post-acute facilities,” Swanson noted.

Like their parent organizations, hospital and health system-based medical laboratories are dealing with ongoing staffing shortages, which Dark Daily covered extensively in multiple ebriefings.

Non-profit healthcare systems are particularly hard hit, leading to merger/acquisition deals that continue the trend of hospital consolidation.

“Consolidation will continue. Here’s the scary part. The old solutions of jacking up treatment volumes and commercial payment rates aren’t working. Evidence of business model failure abounds. A fiscal storm is raging,” David Johnson, CEO, 4sight Health, wrote in an article for the Healthcare Financial Management Association. The results of these business failures have a direct impact on hospital-based medical laboratories as well as clinical laboratories in surrounding areas that service a health system’s physicians. (Photo copyright: 4sight Health.)

‘Unprecedented Challenge for Nonprofit Providers’

In “Cracks in the Foundation—Five Structural Defects Are Undermining Nonprofit Healthcare,” a six-part series he penned for the Healthcare Financial Management Association (HFMA), David Johnson, CEO at 4sight Health, noted that when it comes to nonprofits, five of the healthcare giants have been reporting sizable losses.

The numbers speak volumes. Looking at financial statements from 2022, Ascension, Cleveland Clinic, CommonSpirit Health, Providence, and Mass General Brigham all posted losses of more than $316 million dollars, the HFMA series noted. Two in that group (CommonSpirit and Providence) posted losses over $1.1 billion. Providence’s losses represented only nine months of data from 2022.

So, what’s the problem? In another HFMA article titled, “The End of Traditional Nonprofit Healthcare Business Models?” Johnson wrote, “Even in the best of times, the nonprofit hospital business model has never been robust. Hospitals are capital-intensive, labor-intensive, highly-regulated, low-margin businesses that require high-cost facilities and highly expert personnel to operate.

“Competing mission and business priorities make running nonprofit hospitals even more difficult,” he added. “The existential question is whether current operating losses at nonprofit health systems are aberrant or indicate a broader collapse of their models. I believe it’s the latter. Structural weaknesses, combined with pernicious macro forces, make this a period of unprecedented challenge for nonprofit providers.”

In his “Cracks in the Foundation” series, Johnson lists five “deeply embedded defects in current nonprofit business models.” They are:

  • Artificial economics
  • Needs-services mismatch
  • Brittle business models
  • Regulatory headwinds
  • Inadequate leadership

“Under pressure, health systems are struggling to right the ship, but they are defaulting to old habits,” Johnson wrote. “They’re chasing volume and rates under fee-for-service (FFS) medicine. While this has worked in the past, it is not a viable long-term strategy. Powerful macro forces are aligning against healthcare business practices. Ignoring them won’t make them go away.”

This chart, taken from 4sight Health CEO David Johnson’s HFMA article, shows the five large health systems that showed operating losses in 2022. The numbers displayed are drawn from each health system’s publicly released financial statements for the periods shown, HFMA noted. (Graphic copyright: Healthcare Financial Management Association.)

Deteriorating Outlook for Health Systems

Increased expenses for labor and supplies paired with inflation is what a 2022 Fitch Ratings report cited as contributing to a “‘deteriorating’ outlook for systems,” Healthcare Dive reported.

“Labor will remain the largest hurdle for hospitals this year even as they struggle with inflation and spiking COVID-19 admissions that can dent revenue. The labor story just dwarfs the inflation story,” financial analyst Kevin Holloran, Senior Director and Sector Leader USPF Healthcare at Fitch Ratings, told Healthcare Dive.

Holloran has worked for Fitch since 2017, joining after 14 years at S/P Global Ratings. He has 20-years experience in the healthcare sector. 

Nonprofit hospitals that posted COVID-19-related operating losses are struggling with higher costs for labor and supplies while navigating declining and neutral admission volumes, Healthcare Dive noted, citing that healthcare systems have turned to staffing agencies and contracted labor to counter the loss of burned-out employees who go on strike or who leave healthcare entirely. On a positive note, Holloran sees contract labor use decreasing in the future.

What’s Next?

There’s a steep road ahead for nonprofits but Holloran see positive changes. “We are beginning to come out of the worst of it,” he told Healthcare Dive. However, he added, “Hospitals should not expect to ‘grow [their] way out’ of soaring labor expenses by raising revenues or increasing hospital admissions.”

Like Johnson, Holloran stressed the importance of looking for long-term solutions. With rising expenses, declining revenues, and increased labor costs projected to continue for years, “hospitals are putting recruiting and retention efforts ‘on steroids’ amid challenges,” he noted.

One coming improvement is that hospitals “can look toward commercial payer contracts to ease high expenses,” Holloran predicted.

“Payer contracts fall in the approximately 25% to 30% of non-fixed revenue that hospitals have the ability to control. … The ratings agency [Fitch] now expects to see a shift from long-term contracts to single-year contracts as nonprofits attempt to ease expenses,” Healthcare Dive noted.

It appears that, for the foreseeable future, clinical laboratories will continue to feel the pressures brought on by mergers and acquisitions as the healthcare industry struggles to find solutions to the economic downturn and loss of qualified staff following the COVID-19 pandemic.

—Kristin Althea O’Connor

Related Information:

Hospital, Health System Mergers and Acquisitions Impact Clinical Laboratories

Kaufman Hall National Hospital Flash Report

Cracks in the Foundation—Five Structural Defects Are Undermining Nonprofit Healthcare

The End of Traditional Nonprofit Healthcare Business Models?

Nonprofit Hospitals, Hammered by Soaring Expenses, Have ‘Deteriorating’ Outlook: Fitch

Hospital, Health System Mergers and Acquisitions Impact Clinical Laboratories

Post-merger, a first goal is often to achieve cost savings by consolidating hospital laboratory testing into fewer medical laboratory sites

Major integrated delivery network (IDN) healthcare systems continue to acquire other hospitals. These deals are getting larger in scope and confirm that the trend of hospital consolidation is robust and ongoing. They also present a challenge for clinical laboratories that service the IDN’s physicians from both inside and outside the networked systems.

One most recent example is the announced mega-merger of non-profit BJC HealthCare (BJC) in St. Louis and faith-based non-profit Saint Luke’s Health System (St. Luke’s) in Kansas City, both in Missouri. St. Louis Post-Dispatch described the deal as “one of the biggest local hospital mergers in recent memory.”

And for good reason. According to Healthcare Dive, the partnership that will create a 28-hospital, $10 billion dollar health system with more than 100 specialty and primary care offices serving patients in Illinois, Kansas, and Missouri. Fiscally, BJC showed $6.3 billion in revenue last year and Saint Luke’s $2.4 billion.

Mega mergers are a big deal (pun intended). They can give the new healthcare organization unrivaled competitive authority in the marketplace potentially passing along lower healthcare prices to patients. But they come at cost to embedded clinical staff, including medical laboratories.

The health system merger gives BJC/St. Luke’s “huge leverage in terms of negotiating power with the insurers,” Ryan Barker, an independent healthcare policy consultant, told the St. Louis Post-Dispatch. Clinical laboratories are also impacted in these mergers when hospital systems consolidate their testing capabilities and locations. (Photo copyright: Missouri Foundation for Health.)

Impact of the BJC/St. Luke’s Merger

BJC and St. Luke’s signed a non-binding agreement to merge on May 31 and plan to reach a final agreement before the year’s end barring regulatory interference. The duo’s combined 28-hospital system will operate out of two headquarters: One in St. Louis managing southern Illinois and eastern Missouri, and another in Kansas City to serve parts of Kansas as well as western Missouri, Healthcare Dive reported.

The merger of BJC and St. Luke’s means the formation of a “clear market leader in Missouri,” St. Louis Post-Dispatch reported, adding that BJC has 40% of the market’s patient discharges and St. Luke’s holds 20% of the market share in the “state’s second largest metropolitan area.”

This will likely manifest itself in leverage during negotiations with healthcare payers that service that area.

“It continues to be the case that the hospitals are trying to gain the upper hand on the insurers,” John Romley, PhD, Associate Professor in the University of Southern California (USC) Price School of Public Policy and USC Mann School of Pharmacy and Pharmaceutical Sciences, told the St. Louis Post-Dispatch. Romley is also an economist at the USC Schaeffer Center for Health Policy and Economics, and adjunct economist at the Rand Corporation. “That was true 10 years ago. That’s true today,” he added.

“That’s what I always worry about with consolidation is the impact on [healthcare] pricing,” Ryan Barker, an independent healthcare policy consultant in St. Louis and former Vice President of Health Policy at Missouri Foundation for Health, told the Post-Dispatch.

Other Large Health System Mergers and Acquisitions

There have been a growing number of large-scale mergers and acquisitions of IDNs in the last few months. Dark Daily’s sister publication The Dark Report has covered these deals in multiple intelligence briefings.

Most recently, in “Kaiser Acquires Geisinger Health in Value-Based Deal,” The Dark Report outlined Kaiser Foundation Hospitals’ (KFH) acquisition of Pennsylvania-based Geisinger Health. Based in Oakland, California, KFH is part of the Kaiser Permanente integrated delivery network.

Healthcare policy makers were surprised by the merger, as Kaiser and Geisinger were often cited as two of the best IDNs in the nation.

Now under single ownership there will be implications that take years to play out, especially for clinical laboratories that now must service a significantly larger physician base. Conversely, if the new combined healthcare system decides to combine multiple medical laboratories to save on costs it will have a huge impact on lab staff.

Another deal recently announced involves UPMC’s (University of Pittsburgh Medical Center) announcement to merge with multihospital Washington Health System (WHS) in Washington, Pennsylvania, a WHS news release noted. But the move has drawn pushback from elected officials and organized labor, the Pittsburgh Post-Gazette reported.

UPMC has recorded rapid growth over the year acquiring smaller hospitals, but hospital mergers are getting closer inspections from federal regulators, the Pittsburgh Post-Gazette noted.

SEIU Healthcare Pennsylvania—part of the Service Employees International Union—was first to request an investigation by the US Department of Justice for what it called a “long and egregious history of labor law violations.” It also claimed that UPMC merged with 27 hospitals from 1996 to 2019, adding 10 between 2016 and 2018, the Pittsburgh Post-Gazette reported.

And in “Sanford/Fairview Merger Has Implications for Clinical Labs,” The Dark Report explored the merger between IDNs Sanford Health of Sioux Falls, South Dakota, and Fairview Health Services in Minneapolis. The mega merger creates a 58 hospital/79,000 employee multi-hospital system.

Concentrated ownership of diagnostic services impacts clinical laboratories in many ways. The Dark Report noted that combined IDNs often review clinical laboratory services across the entire healthcare network. Opportunities for third-party commercial labs to step in and run the hospitals’ local laboratory services may also present themselves.

Impact IDN Mergers Have on Clinical Laboratories

Mergers occur for many reasons. Monetary stress has a wide-reaching impact, and some healthcare researchers suggest that financial pressures may cause hospitals formerly hopeful about their medical laboratory outreach businesses to consider selling their programs, as The Dark Report noted.

One significant impact that health system mergers and acquisitions can have on clinical laboratories is to reduce their number, particularly by consolidating testing from multiple sites into a core laboratory.

“There is a growing body of empirical research about the potential for competitive harm to labor markets from consolidation and concentration,” Federal Trade Commissioner Rebecca Kelly Slaughter, JD and FTC Chair Lina M. Khan, JD, wrote in a joint 2022 statement about the merger of the first and second biggest healthcare providers in Rhode Island. “The loss of competition from mergers may be especially pernicious in the healthcare sector where skilled medical professionals are uniquely limited in employer options within their local geographic area,” the Pittsburgh Post-Gazette reported.

In this case, the plans to merge were ended after the FTC sued to block the partnership.

More IDN Mergers on the Way

But increased FTC scrutiny does not seem to have slowed the trend toward larger merger and acquisition deals. Kaufman Hall’s 2023 National Hospital Flash Report states that both mergers and acquisitions are trending toward cross-regional partnerships and predicts a “new wave of transaction activity,” Healthcare Dive reported. The report looks at actual and budget data collected over the past three years that was sampled from more than 900 hospitals on a recurring monthly basis.

And so, moving into the future, clinical laboratories can expect to see more mergers and acquisitions of IDNs, with consolidation, regionalization, and standardization occurring in the combined IDN’s clinical laboratory once the merger is completed and leadership begins to look for ways to save costs. Labs are generally first to be consolidated because it is easier to move lab specimens than it is to move patients.

—Kristin Althea O’Connor 

Related Information:

BJC Healthcare, Saint Luke’s Health System Plan to Merge, Forming $10B System

BJC Saint Luke’s Hospital Merger Would be One of the Area’s Largest, It May Not be the Last

Merger of BJC and St. Luke’s Will Likely Raise Hospital Prices in Missouri, Analysts Say

BJC HealthCare and Saint Luke’s Health System Sign Letter of Intent to Form Integrated Missouri-based Health System

UPMC Plans to Acquire Washington Health System

UPMC, Washington Health System Sign Letter of Intent to Affiliate

Washington Health System to Merge with UPMC

UPMC Seeks to Add 2-Hospital Washington Health System

Stiff Headwinds Await UPMC in Its Bid to acquire Washington Health System

National Hospital Flash Report: April 2023

Kaufman Hall’s 2023 National Hospital Flash Report

Larger Hospital Mergers Expected in Post Pandemic Market, Kaufman Hall Says

13 Healthcare Mergers and Acquisitions Making Headlines in May

Clinical Laboratory Trends Kaiser Acquires Geisinger Health in Value-Based Deal

City of Baltimore, University of Maryland Create Pilot Program to Train People to Work in Clinical Laboratories

Funded by the CDC, the program hopes to alleviate personnel shortages in Baltimore area clinical labs while also producing a knowledge base for lab managers nationwide

Clinical laboratory managers struggling to fill vacant phlebotomy and accessioning positions will be interested to learn about a pilot program being conducted by the City of Baltimore and the University of Maryland School of Medicine to train people “for employment in hospital laboratories, phlebotomy draw sites, and reference laboratory processing centers,” according to The Elm, a publication of the University of Maryland, Baltimore.

The 14-week “Mayor’s Workforce Development Program” began on April 19 and will continue through the end of July. Participants meet twice a week for lectures and experience working with specimens in actual medical laboratories or in a “hybrid learning environment,” The Elm reported.

“I came up with the idea of doing cross-training for laboratory people and public health people in case there is another pandemic,” explained Lorraine Doucette in an exclusive interview with Dark Daily. Doucette, who is managing the pilot program, is an Assistant Professor and Medical Laboratory Science Program Director, Department of Medical and Research Technology, University of Maryland School of Medicine.

“There is already a huge shortage of laboratory people, but an enormous amount left in droves during the pandemic because they got physically burned out. Some just could not do the work anymore because of things like carpal tunnel syndrome and repetitive stress injuries,” she added.

Lorraine Doucette

“I’m confident that all 15 or 16 students who complete this workforce program will be employed within weeks of finishing as accessioners,” said Lorraine Doucette (above), Assistant Professor and Medical Laboratory Science Program Director, Department of Medical and Research Technology, University of Maryland School of Medicine, in an exclusive interview with Dark Daily. “This has been so successful. This is making a difference in people’s lives. This is changing them from being unemployed to actually having a career in a clinical laboratory. They love it. They are so proud of themselves.” (Photo copyright: LinkedIn.)

CDC Funding Part of National Program to ‘Enhance’ Clinical Lab Workforce

Doucette and her team met with people from the Baltimore Mayor’s Office of Employment Development (MOED) to discuss a possible partnership. They were interested and Doucette eventually became a recipient of funding through a cooperative agreement with the federal Centers for Disease and Control Prevention (CDC).

The collaboration is part of a CDC project titled, “Enhancing US Clinical Workforce Capacity.’ Doucette will receive a total of one million dollars over the course of three years to facilitate the program in stages.

“It is not necessarily an old-fashioned grant where they just gave me a pile of money,” Doucette told Dark Daily. “The CDC works with me constantly via reports and Zoom meetings.”

This CDC project is designed to both cross train clinical laboratory professionals in public health, clinical chemistry, microbiology, and hematology, as well as to train individuals in the workforce development program to become laboratory accessioners.

“They are going to be qualified to work as an accessioner in any local hospital,” Doucette noted. “The people who pick up the lab samples out of the tube system are the accessioners and there is a huge shortage of them also. We’re teaching them the basics so the more advanced lab personnel can perform the higher-level work.”

Students in the program learn all about lab safety and the proper handling of lab samples as well as proper data entry, professionalism, and how to communicate with medical and laboratory personnel. They work with urine and blood samples and fabricated spinal fluid samples. 

“They are taught about the different tubes, what the anticoagulants are, what makes each tube unique, why you can’t mix samples, balancing a centrifuge, and how to properly put on and remove safety gear like lab coats, gloves, and goggles,” Doucette explained. 

The Mayor’s Workforce Development Program is free for Baltimore residents looking for employment via the workforce office. The only requirements for enrolling are having a high school education and being fully vaccinated.

Phlebotomy and Additional Cross-training to Be Added

Doucette would eventually like to add a phlebotomy segment to future training sessions. “We would like to develop an additional partnership with BCCC (Baltimore City Community College) for the phlebotomy piece. That would definitely increase the people and the program’s marketability,” she said. “They could not only draw the blood, but they could also process the sample.”

After assessing the success of the current program and determining what did and did not work, there will be an additional training session held in the fall. Next year, there will be more sessions held for individuals in the workforce program and cross-training classes for current clinical laboratory professionals.

The strategy for the third year of the grant includes sharing the specifics of the program with medical laboratory professionals via the CDC’s free OneLab REACH platform. This portion includes the online delivery of documentation such as training sheets, lab exercises, Microsoft PowerPoint presentations, and videos used in both the accessioning and cross-training coursework.

“We’re going to do the OneLab REACH,” Doucette said. “I’m going to be putting it all online and marketing it all around the country in stages and increments. I will be going to a lot of professional society meetings and talking to lab managers to help them understand the concept of how this all benefits them.”

This unique collaboration between the City of Baltimore and University of Maryland School of Medicine, funded by the CDC, should help alleviate some of the clinical laboratory worker shortages that exist in the Baltimore area. Hopefully, the effort will result in additional knowledge, resources, and tools to assist medical lab managers across the country to recruit and retain talented, highly-skilled workers.   

JP Schlingman

Related Information:

Enhancing US Clinical Laboratory Workforce Capacity

What Is an Accessioner and How to Become One

Enhancing US Clinical Laboratory Workforce Capacity

93.322: CSELS Partnership: Strengthening Public Health Laboratories

NOFO OE22-2202: Enhancing US Clinical Laboratory Workforce Capacity—Frequently Asked Questions

NOFO OE22-2202: Enhancing US Clinical Laboratory Workforce Capacity—Q/A Session Transcript

Forbes Senior Contributor Covers Reasons for Growing Staff Shortages at Medical Laboratories and Possible Solutions

Medical Technologist Demand Exceeds Supply by Large Margin Across the United States as Clinical Laboratories Scramble to Stay Fully Staffed

Number of Unfilled Medical Residencies Increases in Alberta and Other Areas of Canada

Family medicine academic departments in Canada are dealing with a shortage of applicants qualified for their residency programs, mirroring the shortage of pathologists

For the past decade, the number of medical residencies in Alberta Canada that went unfilled have increased each year. Now, just like in many parts of America, the province is experiencing severe medical staffing shortages that includes clinical laboratories and pathology groups.

According to data compiled by the Canadian Resident Matching Service (CaRMS), after the first round of matching for post-graduate training spots as many as 12% of all spots went unfilled, especially in family medicine, the Canadian Broadcasting Corporation (CBC) reported.

Though the trend seems to be worse in Alberta, the resident shortage is affecting the entire Canadian healthcare system. According to the Angus Reid Institute, approximately half of all Canadians cannot find a doctor or get a timely appointment with their current doctor.

That is fueling predictions of an increased physician shortage in coming years, particularly in Alberta.

The graphic above taken from the CBC report shows how the number of residencies in family medicine that go unfilled has been increasing for the past 10 years. This trend mirrors similar trends affecting clinical laboratories and pathology groups around the world. (Graphic copyright: Canadian Broadcasting Corporation.)

Internationally Trained versus Home-grown Doctors

Canada’s current doctor shortage appears to be rooted in red tape that determines which MDs qualify for residency matching. According to John Paul Tasker, a senior journalist at the CBC, “there’s no shortage of doctors in Canada. What we have is a shortage of licensed doctors.” In his article, “Canada Is Short of Doctors—and It’s Turning Away Hundreds of Its Own Physicians Each Year,” Tasker notes that there may be as many as 13,000 medical doctors in Canada who are not currently practicing.

What’s standing in the way of Canadian doctors becoming licensed to practice? Some claim the system of residency matching is discriminatory towards Canadian doctors who received their training outside of Canada. Rosemary Pawliuk, President of the Society for Canadians Studying Medicine Abroad, is one of those who believe the system of matching is broken.

“They have cute slogans like, ‘You’re wanted and welcome in Canada,’ but when you look at the barriers, it’s very clear that you should not come home. Their message is essentially, ‘Go away’ and so [doctors] do,” Pawliuk told the CBC.

According the Pawliuk, “the current residency selection system puts internationally trained Canadian doctors at a serious disadvantage,” the CBC reported. “The Canadian public should be entitled to the best qualified Canadian applicant. Whether they’ve graduated from a Canadian school or an international school, whether they’re a Canadian by birth or if they’re an immigrant, they should be competing on individual merit,” she added.

Canada’s Medical School Matching Bias

In Canada’s current matching system, medical schools decide who gets a residency. Critics say the schools are biased towards Canadian-educated doctors and overlook foreign-trained doctors. About 90% of all residencies in Canada are set aside for Canadian-trained doctors and the remaining spots are left for the physicians trained abroad, CBC noted.

It is important to note that these doctors who are trained abroad are either Canadian citizens or permanent residents. Thus, it’s not a question of citizens from other countries competing with Canadian citizens.

So, if a surplus of doctors are being shut out of residency training opportunities, why are there open slots in Alberta? Some believe this indicates individuals are not interested in practicing medicine in Alberta.

“People aren’t interested in staying or coming to Alberta,” family physician and Alberta Medical Association (AMA) President, Fredrykka Rinaldi, MD, told CBC.

But, Nathan Rider, MD, President of the Professional Association of the Resident Physicians of Alberta (PARA), claims he has not heard of residents turning down Alberta. He notes that the factors of where a resident may want to go geographically often depend on factors such as proximity to loved ones, cost of living, and program culture.

Second Round Residency Matching Fairs Better

Not all are concerned about the vacancies in the first round of matching, however. University of Calgary Dean of Medicine, Todd Anderson, MD, and the University of Alberta Dean of Medicine and Dentistry Brenda Hemmelgarn, MD, PhD, both see the second round as more important.

But Rinaldi still has concerns, “We may fill them with 42 disinterested people who have no interest in family medicine,” she says.

Anderson admits that “Across the country, over the last five or more years, family medicine has become less popular with medical students graduating from medical schools than it was in the years before.”

Therefore, both Anderson’s and Hemmelgarn’s schools have changed curriculum to put more of an emphasis on family medicine. Perhaps with these changes, and possibly an opening for internationally-trained Canadian doctors to achieve residency positions, Alberta’s—indeed all of Canada’s—residency match days will be better attended.

In the United States, there is little news coverage about serious problems with the health systems in other nations. The experience of residency programs in Canada, as explained above, demonstrates how a different national health system has unique issues that are not identical to issues in the US healthcare system. What is true is that Canada is dealing with a similar shortage of skilled medical technologists (MTs) and clinical laboratory scientists (CLSs), just like here in the United States.

Ashley Croce

Related Information:

Alberta Doctors Sound Alarm Over Low Number of Grads Seeking Residency in Province

Doc Deficits: Half of Canadians Either Can’t Find a Doctor or Can’t Get a Timely Appointment with the One They Have

Canada is Short of Doctors—and It’s Turning Away Hundreds of Its Own Physicians Each Year

B.C. Fights to Maintain the Barriers That Keep Foreign-Trained Doctors from Working

Can’t Find a Family Doctor in Alberta? Training More Medical Students Is Not the Silver Bullet

Forbes Senior Contributor Covers Reasons for Growing Staff Shortages at Medical Laboratories and Possible Solutions

US Hospitals Continue to Be Squeezed by Shortage of Nurses, Rising Salaries

Medical Residency ‘Match Day’ Yields Rare Mother and Son Placements with Mother Matched to Pathology Program at the University of Wisconsin-Madison

It was a special and unusual moment for this mother and son duo as they applied for acceptance into residency programs and were both matched on the same day

Pathologists and other clinical laboratory scientists who underwent the matching process will be interested to learn how a mother and son were matched on the same day as part of the National Resident Matching Program (NRMP) 2023 Match Day.

Match Day is the next step for medical and medical technology students to be placed into desired training programs in chosen specialties. According to the NRMP website, pairings are determined by a mathematical algorithm to match applicants with residency positions.

Wenjing Cao, MD, PhD, and her son Hefei Liu, MD, didn’t plan to apply for residency together, but when Cao wanted to return to medicine, the pair realized they could be matched to programs at the same time, Good Morning America reported.

Cao, 54, is currently a research scientist/professor at the University of Kansas. She graduated from medical school in China and spent 10 years practicing internal medicine there before immigrating with her family to the US in 2006. Liu, 26, is finishing his oncology studies at the Medical College of Wisconsin where he expects to graduate in May.

Hefei Liu, MD and Wenjing Cao, MD, PhD

Hefei Liu, MD (left), a radiation oncology student at Medical College of Wisconsin, and his mom hematologist Wenjing Cao, MD, PhD (right), a research scientist and professor at the University of Kansas, matched residencies on the same day during the annual National Resident Matching Program 2023 Match Day. Pathologists and clinical laboratory scientists know how exciting this day can be for residency applicants. (Photo copyright: Good Morning America.)

Pair Express Their Excitement, Awe

The matching program will take the pair to different locations for their training. Cao will be headed to the clinical pathology residency program at the University of Wisconsin-Madison and Liu to the University of Pennsylvania for the radiation oncology residency program, Good Morning America noted.

“When she told me she was going to reapply this year and it was the same year I was applying, I thought, this could actually happen. Somehow it did and it’s still incredible to me,” Liu said.

Cao is also thrilled. “This is incredible and amazing, something I feel very excited about. I never thought I would go through this process with my son together,” she told Good Morning America.

National Resident Matching Program

Though this is a special and rare moment, it’s not the first time the NRMP matched a parent/child in the Main Residency Match. However, Stephanie Bartek, Senior Communications Analyst for the NRMP, told Dark Daily that the NRMP does not track whether applicants are related, so there is no way to provide odds of it occurring.

The NRMP has matched physicians to residency training programs since 1952, but in 1984 it formalized the Medical Specialties Matching Program (MSMP) which matches physicians into fellowships and subspecialty training programs.

The first fellowship match was for Colon and Rectal Surgery. Since then, the NRMP has grown the MSMP to 73 subspecialties in 20 separate fellowship Matches, according to an NRMP press release.

2023’s Matches Speak to Healthcare Growth

“The 2023 Main Residency Match proved once again to be a highly successful Match with outstanding results for participants. We were excited to see the record number of primary care positions offered in this year’s Match and how the number of positions has consistently increased over the past five years, and most importantly, the fill rate for primary care has remained steady,” said Donna L. Lamb, PhD, NRMP President and CEO, in a press release announcing the release of “Results and Data Specialties Matching Service, 2023 Appointment Year for Fellowship Matches Conducted by the NRMP’s Specialties Matching Service (SMS)” in April.

The report shows 13,919 active applicants competed for 13,365 fellowship positions offered by 5,734 programs, according to the press release.

“For the past 70 years, the NRMP has been proud to play a part in helping physicians transition into residency training and begin careers serving their patients and community,” she added.

Age is Only a Number

Cao hopes her match will impact individuals who are holding back from following their desires.

“I hope my story can inspire so many others like me, at my age, [in their] 50s, and as a mother, as a woman, as an immigrant, [anyone] can pursue their dream, as long as you want it,” she said. “It’s your dream, put hard work on it. Keep positive. Stay motivated. You can get it.”

Her son Liu mirrored her sentiment. “If you see your parents or any of your family members who are interested in pursuing medicine and they have an interest, but they clearly have some sort of obstacles in their life, you should … be supportive of them and encourage them to pursue that dream because I think with dedication, hard work, and sometimes just even luck, that you can truly achieve your success.”

With the demand for pathologists in the United States outstripping the supply, Wenjing Cao, MD, PhD, may have her pick of positions when she finishes her pathology residency program and any pathology fellowship programs she may undertake.

—Kristin Althea O’Connor

Related Information:

Mom and Son Celebrate Matching Residency Programs Together: ‘Still incredible to me’

NRMP Publishes Comprehensive Data Book for Fellowship Matches

Medical Specialties Matching Program

Results and Data Specialties Matching Service, 2023 Appointment Year for Fellowship Matches Conducted by the NRMP’s Specialties Matching Service