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Clinical Laboratories and Pathology Groups

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News, Analysis, Trends, Management Innovations for
Clinical Laboratories and Pathology Groups

Hosted by Robert Michel
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PwC Survey Finds 50% of Companies Plan Layoffs and 83% Intend to Move Forward with Streamlined Workforces

Amid cost pressures, healthcare providers also plan to cut staff though some jobs are plentiful; adequate staffing at medical laboratories continues to be a challenge

Thanks to the COVID-19 pandemic and subsequent “Great Resignation,” masses of people have left the workforce and companies large and small in all industries are struggling to retain employees. Clinical laboratories have been particularly hard hit with no relief in sight.

Now comes the results of a PricewaterhouseCoopers (PwC) survey which shows 50% of US companies in various industries—including major healthcare providers—plan to lay off employees. And 83% of organizations intend to move forward with a “streamlined workforce,” according to the latest PwC Pulse: Managing Business Risks in 2022 report.

How this will affect the workload on remaining hospital and medical laboratory staff is clear. And healthcare consumers may not take well to healthcare provides running leaner and with fewer staff than they currently do.

Nevertheless, the PwC survey results “illustrate the contradictory nature of today’s labor market, where skilled workers can still largely name their terms amid talent shortages even as companies look to let people go elsewhere,” Bloomberg wrote on the  CPA Practice Advisor website.

Bhushan Sethi

“Organizations are still walking a tightrope when it comes to talent as we begin to see the longer-term impacts of the ‘Great Resignation.’ Finding the proper balance between investing in specialized talent, managing headcount costs, and driving productivity and morale will remain a top focus,” said Bhushan Sethi (above), People and Organization Joint Global Leader at PwC and an adjunct professor at NYU Stern School of Business in a PwC news release. Clinical laboratories are finding it particularly challenging to fill staff positions across all areas of lab operations. (Photo copyright: PwC.)

Healthcare Has Biggest Challenges, says PwC

Clinical laboratory leaders and pathologist groups are well aware of the unique financial pressures on healthcare systems and medical labs, as well as shortages of pathologists, medical technologists, clinical laboratory scientists, information technology (IT) professionals, and other healthcare workers.

“Healthcare is seeing bigger talent challenges than other industries and is more focused on rehiring employees who have recently left,” the PwC report acknowledged. This is the second Pulse survey PwC conducted in 2022. The 722 respondents included leaders working in human capital and finance.  

Finding Right Talent, Focusing on Growth, Automation

Finding the right employees is so important to companies that PwC ranks “talent acquisition” as the second highest risk (38%) behind cyber-attacks (40%).

“Finding the right talent continues to be a challenge for business leaders,” PwC said. “After a frenzy of hiring and a tight labor market over the past few years, executives see the distinction between having people and having people with the right skills.”

Unlike the high-touch and personal nature of healthcare, industries such as consumer technology, media, and telecommunications can turn to automation to alleviate staffing struggles. And that is what nearly two-thirds, or 63%, of companies in those sectors, aim to do, PwC said.

Other survey talent findings:

  • 50% of companies plan layoffs.
  • 46% are dropping or eliminating sign-on bonuses.
  • 44% are rescinding job offers.

Conversely, the surveyed executives also told PwC they are “cautiously optimistic” and plan on growing and investing even as the economy gives mixed signals:

  • 83% of companies are focused on growth.
  • 70% plan an acquisition.
  • 53% aim to invest in digital transformation, 52% in IT, 49% in cybersecurity and privacy, and 48% in customer experience.

“After more than two years dealing with uncertainty related to the pandemic, business leaders recognize the urgent need to focus on growth in order to compete, and they’re zeroing in on what they can control,” PwC said.

New Remote Work Programs, Reduction in Real Estate Investing, Big Tech

Although companies report having more than enough physical office space, many (42%) have launched remote work programs:

  • 70% have expanded or plan to increase “permanent” remote work options as jobs permit.
  • 22% are reducing real estate investment (financial services and healthcare industries lead the way with 30% and 29%, respectively, saying real estate buys are cooling off).

“While companies continue to invest in many areas of the business, they’re scaling back the most in real estate and capex ex [capital expenditure]. After two years of remote work, many companies simply need less space, and they’re allocating capital accordingly,” the PwC report noted.

In a somewhat parallel release to PwC’s findings, news sources are reporting reductions in real estate and staff at high-profile Big Tech companies.

Meta Platforms, Inc. in Menlo Park, Calif. (formerly Facebook Inc.), is closing one of its New York offices and cutting back on plans to expand two other locations in the city, the Observer reported.

Business Insider reported, “More than 32,000 tech workers have been laid off in the US till July, including at Big Tech companies like Microsoft and Meta (formerly Facebook), and the worst has not been over yet for the tech sector that has seen massive stock sell-off.”

According to Forbes, “San Francisco-based electronic signature company DocuSign will lay off 9% of its more than 7,400 employees (roughly 670 employees), the company announced in a Securities and Exchange filing Wednesday, saying the cuts are ‘necessary to ensure we are capitalizing on our long-term opportunity and setting up the company for future success.’”

And Bloomberg recently reported that Intel is planning to layoff thousands of people “around the same time as its third-quarter earnings report on Oct. 27.”

Healthcare Providers Plan Layoffs, Seek IT Pros

Meanwhile, major healthcare provider networks also are planning staff cuts amid service closures, rising costs, and other issues, according to Becker’s Hospital Review:

“Our health system, like others around the nation, is facing significant financial pressures from historic inflation, rising pharmaceutical and labor costs, COVID-19, expiration of CARES Act funding, and reimbursement not proportional with expenses,” BHSH said in a statement shared with Becker’s.

Amidst these layoffs, however, IT jobs in healthcare seem to be growing. According to Becker’s Health IT, some healthcare providers have posted information technology openings:

So, though it appears IT positions continue to expand, clinical laboratory leaders and pathology practice managers may want to prepare now for dealing with customers’ response to leaner healthcare systems overall.

Donna Marie Pocius

Related Information:

PwC Pulse: Managing Business Risks in 2022

Layoffs are Being Planned at Half of US Companies, PwC Survey Shows

Business Executives Remain Bullish about Their Ability to Manage Turbulent Conditions, according to New PwC Survey

Meta Is Closing a Manhattan Office as It Consolidates Its New York City Presence

50% of Companies Planning Job Cuts Amid Economic Downturn: Report

Ascension to Close Hospital, Lay Off 133 Workers

Microsoft Reportedly Cuts Nearly 1,000 Employees—Here Are the Biggest US Layoffs This Year

Intel Is Planning Thousands of Job Cuts in Face of PC Slump

Hospitals Cut Jobs to Resuscitate Finances

IT Job Openings at Mayo, Northwell, CommonSpirit, and Providence

Two Georgia Hospitals First to Be Fined by CMS for Failure to Comply with Hospital Price Transparency Law

Nearly two years after passage of price transparency law, only a small number of the nation’s hospitals are fully compliant, according to two separate reports

Price transparency is a major trend in the US healthcare system. Yet, hospitals, physicians, clinical laboratories, and other providers have been reticent to design their websites so it is easy for patients to find prices in advance of clinical care. Now comes news that federal officials are ready to issue fines to hospitals that fail to comply with regulations mandating price transparency for patients. 

Many of the largest healthcare networks claim that complying with federal hospital price transparency regulation is costly, time consuming, and provides no return on investment. Nevertheless, the federal Centers for Medicare and Medicaid Services is quite serious about enforcing price transparency laws, and to that end the agency has, for the first time, levied fines against two hospitals in Georgia that have not complied with the regulations.

As many pathologists and medical laboratory managers know, on January 1, 2021, a federal rule on price transparency for medical facilities went into effect. The rule requires hospitals—as well as clinical laboratories and other healthcare providers—to post a comprehensive list of their services and the pricing for those services on their websites, and to provide access to a patient-friendly tool to help consumers shop for 300 common services.

The CMS recently issued its first penalties to two hospitals located in Georgia for violating the law by not updating their websites or replying to the agency’s warning letters. The letters CMS sent to the two hospitals alleged there were several violations of the transparency rules, including the failure to post a listing of their charges on their websites and requested corrective action plans by the hospitals.

In November 2021, Northside Hospital Atlanta informed regulators that consumers should call or email the facility to obtain price estimates for services. Later in January 2022, during a “technical assistance call,” a hospital representative told CMS “the previous violations had not been corrected and, in fact, the hospital system had intentionally removed all previously posted pricing files,” according to a Notice of Imposition of a Civil Monetary Penalty letter CMS sent to Robert Quattrocchi, President and Chief Executive Officer, Northside Hospital Atlanta.

Under the rules of the Hospital Price Transparency law, each hospital operating in the US is required to provide clear, accessible pricing information online about the items and services they provide in two ways:

  • As a comprehensive machine-readable file listing all items and services.
  • In a display of shoppable services in a consumer-friendly format.

CMS fined Northside Hospital Atlanta $883,180 and Northside Cherokee Hospital $214,320 for noncompliance with the law. The penalties are calculated based on the size of the hospital and the length of time of the noncompliance—up to $300 per day. In addition, the facilities could endure further monetary penalties if they continue to fail to comply. The organizations will have 30 days to appeal the charges or have 60 days to remit payment for the fines.

Both hospitals are owned by Northside, a Georgia health system with five acute care hospitals, more than 250 outpatient facilities, over 4,100 providers, and 25,500 employees, according to the provider’s website.

Meena Seshamani, MD, PhD
“CMS expects hospitals to comply with the Hospital Price Transparency regulations that require providing clear, accessible pricing information online about the items and services they provide,” said Meena Seshamani, MD, PhD, Director of CMS, in a statement provided to Fierce Healthcare. “This enforcement action affirms the Biden-Harris Administration’s commitment to making healthcare pricing information accessible to people across the country and we are committed to ensuring that consumers have the information they need to make fully informed decisions regarding their healthcare.” Clinical laboratories also are required to comply with federal price transparency regulations. (Photo copyright: Modern Healthcare.)

Compliance with Price Transparency Laws Low

Analysis of the healthcare industry shows that many facilities are not in compliance with the transparency rules. In April, a report released by health IT firm KLAS Research, found that hospitals believe the transparency rule is too costly to implement and confusing to consumers, which helps explain the low compliance issues. KLAS surveyed 66 hospital revenue cycle leaders for their report.

“There are concerns about cost, data accuracy, and patient options of pricing tools; some respondents worry about patients’ ability to understand the displayed pricing data, and today, most patients are unaware online pricing information exists,” the report states. In addition, the report notes that “many organizations are not investing beyond the bare minimum requirements, and they don’t plan to do more until there is further clarity around the regulations and the expectations going forward.”

The KLAS report also noted that organizations are struggling to find the resources to comply with the price transparency rule and consider it a financial burden to continually add new employees and technology to become and remain in compliance. Many organizations see no merit in investing in a regulation that provides no return on that investment.

Another compliance report released in February by Patient Rights Advocate maintained that only 14.3% of the 1,000 hospitals they reviewed were in full compliance with the Hospital Price Transparency regulation. About 37.9% of the hospitals posted a sufficient detailing of service rates, but over half of those hospitals were noncompliant in other criteria of the rule, such as rates by insurer and insurance plans.

“We are now entering the second year since the Hospital Price Transparency rule became law, and compliance remains at very low levels,” according to the report. “The largest hospital systems are effectively ignoring the law, with no consequences.”

The Patient Rights Advocate analysis also found that a mere 0.5% of hospitals owned by the three largest hospital systems in the country—HCA Healthcare, CommonSpirit Health, and Ascension—were in full compliance of the law.

Notably, only two of the 361 hospitals owned by these three hospital systems were fully compliant. In addition, none of the 188 hospitals owned by HCA Healthcare, the largest for-profit hospital system in the country, were in compliance.

Hospitals Fail to Provide Consumers with Critical Information

The Patient Rights Advocate report found that the most significant reason for noncompliance was failure to post all payer-specific and plan-specific negotiated rates on their websites. They estimated that 85.7% of the 1,000 hospitals reviewed did not post a complete machine-readable file of standard charges, as required by the law.

“The lack of compliance by hospitals is about more than simply the failure to follow the legal requirements,” the report states. “It is also about the failure of hospitals to provide critically needed information to consumers so they can make better health decisions. Empowered with comparative price and quality information in advance of care, consumers, including employers and unions, can improve health outcomes while lowering costs by taking advantage of the benefits of competitive market efficiencies.”

With the CMS starting to issue fines for noncompliance, it is probable that more healthcare organizations will focus on adhering to the Hospital Price Transparency law. Since the transparency rules also apply to clinical laboratories, lab managers should be aware of the regulations and any further enforcement actions taken by the CMS.   

JP Schlingman

Related Information:

Hospitals Face Penalties for First Time for Failing to Make Prices Public

CMS Issues First Price Transparency Fines to Two Georgia Hospitals

After Months of Warnings, CMS Hands Out Its First Fines to Hospitals Failing on Price Transparency

KLAS: Hospitals Say Price Transparency Remains Too Confusing and Pricey to Implement

Price Transparency 2022: Hospital Perceptions of CMS Regulation

Semi-Annual Hospital Price Transparency Compliance Report: February 2022

Report: Only 14.3% of Hospitals Compliant with Price Transparency Rules One Year In

Hospital Associations and Healthcare Groups Battle HHS Efforts to Expand Pricing Transparency Rules to Include Negotiated Rates with Payers

Health Insurers and Hospital Groups Argue Price Transparency Rules on Hospitals, Clinical Laboratories, and Other Providers Will Add Costs and ‘Confuse’ Consumers

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