Millions of cancelled healthcare appointments and lengthy waits for care abound in UK, New Zealand, and in the US
Strikes continue on multiple continents as thousands of healthcare workers walk off the job. Doctors, medical laboratory scientists, nurses, phlebotomists and others around the world have taken to the picket lines complaining about low wages, inadequate staffing, and dangerous working conditions.
In England, junior doctors (the general equivalent of medical interns in the US) continue their uphill battle to have their complaints heard by the UK government. As a result, at hospitals and clinics throughout the United Kingdom, more than one million appointments have been cancelled due to strikes, according to the BBC.
“The true scale of the disruption is likely to be higher—many hospitals reduce bookings on strike days to minimize last-minute cancellations,” the BBC reported. “A total of one million hospital appointments have had to be rescheduled along with more than 60,000 community and mental health appointments since December [2022], when industrial action started in the National Health Service (NHS).”
According to The Standard, “Consultants in England are to be re-balloted over the prospect of further strike action as doctors and the government remain in talks with a view to end the dispute. The British Medical Association (BMA) said that specialist, associate specialist, and specialty (SAS) doctors will also be balloted over potential strike action.”
“We must be prepared to take the next step and ballot for industrial action if we absolutely have to—and we will do this … if upcoming negotiations fail to achieve anything for our profession,” Ujjwala Anand Mohite, DRCPath, FEBPath (above), a histopathologist at the NHS, Dudley Group of Hospitals, and the first female Chair of the SAS committee UK, told The Guardian.
New Zealand Doctors, Clinical Laboratory Workers Strike
In September, the first-ever nationwide senior doctor strike occurred in New Zealand and was then followed by another strike of about 5,000 doctors and 100 dentists from New Zealand’s public hospitals, the World Socialist Web Site reported.
Similar to the UK, the strikes reflect mounting frustration over pay not keeping up with inflation and “decades of deteriorating conditions in the public health system,” the WSWS noted.
This follows months of strikes by the island nation’s medical laboratory workers, which are ongoing.
“Our pay scales, if you compare them internationally, are not competitive. About half of our specialists come from abroad, so it’s quite important for the country’s health system to be able to attract and keep people,” Andy Davies, a lung specialist who joined the picket outside 484-bed Wellington Hospital, told the WSWS.
“We’re not asking for the world, we’re asking for an inflationary pay rise, and we haven’t had an inflationary pay rise year-on-year, and it’s beginning to show,” he added.
“What type of health system do they want?” he continued. “Do we want one that treats all people and manages what they need, or do we want a hacked down system that does less?”
The conflicts over pay and working conditions have caused many healthcare workers in New Zealand to leave the field entirely. This has led to severe shortages of qualified workers.
“Patient waiting times—for cancer, hip replacements, cardiac problems, and many other conditions—have exploded due to understaffed and overwhelmed hospitals,” the WSWS reported.
US Healthcare Workers also Striking
The US has its share of striking healthcare workers as well. Healthcare Dive tracked 23 ongoing or anticipated strikes throughout the nation’s healthcare industry since January 1, 2023. In 2022, there were 15 strikes of healthcare workers at the nation’s hospitals and health systems.
These walkouts include doctors, nurses, pharmacy workers, imaging specialists, and thousands of frontline healthcare workers striking over dangerously low staffing levels, unsafe working conditions, and low pay.
In October, 75,000 nurses, support staff, and medical technicians from Kaiser Permanente participated in a 72-hour strike comprised of hundreds of hospitals and clinics throughout California, Washington state, Oregon, Virginia, and the District of Columbia, Reuters reported.
The three-day strike, “Marked the largest work stoppage to date in the healthcare sector,” Reuters noted. Doctors, managers, and contingency workers were employed to keep hospitals and emergency departments functioning.
“The dispute is focused on workers’ demands for better pay and measures to ease chronic staff shortages and high turnover that union officials say has undermined patient care at Kaiser,” Reuters stated.
Staffing shortages following the COVID-19 pandemic are partly to blame for current struggles, but contract staffing to fill critical positions has exacerbated the problem.
“Kaiser’s outsourcing of healthcare duties to third-party vendors and subcontractors has also emerged as a major sticking point in talks that have dragged on for six months. … The clash has put Kaiser Permanente at the forefront of growing labor unrest in the healthcare industry—and across the US economy—driven by the erosion of workers’ earning power from inflation and pandemic-related disruptions in the workforce,” Reuters noted.
Across the globe, many healthcare workers—including clinical laboratory scientists in countries like New Zealand—are feeling burnt out from working in understaffed departments for inadequate pay. Hopefully, in response to these strikes, governments and healthcare leaders can come to resolutions that bring critical medical specialists back to work.
The newly approved legislation will “eliminate regulations preventing patients from learning about diagnostic testing and services provided by local clinical laboratories,” according to a press release issued by the Pennsylvania Senate Republicans.
Republican state Senator Rosemary Brown was the bill’s primary sponsor. She was joined as co-sponsors by a bipartisan group of colleagues.
“The regulations prevent patients from learning about clinical laboratories and the services they provide,” Brown said in the press release. “Patients deserve to know about their options when they are selecting a clinical laboratory to perform these important tests and procedures.”
The press release noted that Pennsylvania is the only state that prohibits clinical laboratories from advertising to residents.
“It’s time for Pennsylvania to catch up with the rest of the nation and enable patients to have access to this information,” said co-sponsor of the bill Republican Senator Tracy Pennycuick (above) in a press release. “Our bill would enable advertising while maintaining the important consumer protection provisions that ensure tests and procedures can only be performed based on a doctor’s order.” Once enacted into law, clinical laboratories in Pennsylvania will be able to advertise their services just like labs in other US states. (Photo copyright: Montgomery County Republican Committee.)
Details of Senate Bill 712
The bill applies to clinical laboratory tests ordered by licensed healthcare practitioners and performed by the medical laboratories themselves. Labs are prohibited from making claims “about the reliability and validity of the testing that is inconsistent with the testing proficiency standards” in federal law, the bill states, and labs must disclose that the test “may or may not be covered by health insurance.”
Brown, Pennycuick, and co-sponsor Republican Senator Lynda Schlegel Culver, discussed the need for the new legislation in a March 2023 memo, observing that 70% of healthcare decisions are influenced by clinical laboratory tests.
“As our state and the nation’s healthcare system continues to grow and evolve, consumers are demanding greater transparency and to be more engaged in how healthcare is delivered to them,” they wrote, adding that the state’s current restrictions are “outdated.”
“We believe permitting outreach to Pennsylvania consumers with accurate, scientifically based diagnostic information can be a source of personalized, highly relevant insight to help foster better, more informed dialogue with licensed healthcare providers, which enables Pennsylvania consumers to take action to improve their health,” they wrote.
“Patients should have access to information about the services and procedures available at their local clinical laboratories,” said Senator Culver in the press release. “I want to make sure patients can make informed decisions about where and how to obtain these important health services. Our bill would remove the gag order on this specific set of healthcare services.”
Similar legislation, HB1558, sponsored by Republican Representative Paul Schemel, is currently pending in Pennsylvania’s House of Representatives.
Larger Push for Healthcare Consumerism
Dark Daily and our sister publication The Dark Report have reported extensively about the rise of consumerism in healthcare—including factors such as price transparency—as it applies to medical laboratories.
And in “Millennials Set to Reorder Healthcare and Lab Testing,” The Dark Report advised clinical laboratories on the need to reconfigure key aspects of their services to accommodate the rising numbers of Millennials in the workforce. For example, these consumers are accustomed to using mobile devices to interact with retailers and want the same convenience when obtaining healthcare services from doctors and labs.
Global management consulting firm McKinsey and Company addressed many of these issues in report titled, “Driving Growth through Consumer Centricity in Healthcare.” The authors suggested that healthcare providers need to “redefine the consumer experience” by emulating “consumer-focused companies in other sectors” with “personalized offerings and services, value-based pricing, and an elevated experience—all from distinctive, high-quality brands.”
The report also noted that providers still have a lot of work to do. “Many consumers believe that the health system does not support their care needs, and they perceive that the quality of their healthcare is negatively affected by their personal attributes, including income, insurance coverage, weight, and age, among other factors,” the authors wrote.
Huron, a healthcare consulting company, identified five current trends in healthcare consumerism based on a survey of US consumers, Healthcare Dive reported. They are:
Greater digital functionality, including telehealth, wearable devices to report health data, and mobile apps for scheduling, communication, and payment.
Affordability, shorter wait times, and online ratings as factors driving consumers to choose providers.
Accurate diagnoses and effective treatment plans as drivers of consumer satisfaction.
Increasing demand for technology-enabled conveniences such as virtual care.
More price transparency in response to concerns about affordability.
Pennsylvania’s decision to join the rest of the nation and allow clinical laboratories to advertise their services may be evidence that the growing number of consumers who want direct access to medical care and the ability to choose their provider—be it hospital, physician, or clinical laboratory—are encouraging the pathology and medical laboratory professions to lobby their state lawmakers to make it easier to advertise their services to the public.
Shift from fee-for-service to value-based reimbursement is fueling increase in joint ventures and co-branded insurance products, creating opportunities for nimble clinical laboratories and anatomic pathology groups
As healthcare moves from fee-for-service to value-based reimbursement, health insurers and providers are joining forces at a steadily increasing rate, with nearly three-quarters of partnered products in early 2018 being joint ventures or fully co-branded insurance products. This trend presents an opportunity for clinical laboratories to help providers become more effective in their use of laboratory tests as they aim for better patient outcomes and lower treatment costs.
While health systems integrating with insurance services is not new, the roll out of the Affordable Care Act (ACA) in 2014 and its emphasis on value-based reimbursement helped create renewed interest in vertical integration, notes Becker’s Hospital Review.
According to consulting firm Oliver Wyman, the number of payer-provider partnerships has grown rapidly over the past six years, with 73% of the 22 insurance products launched in the first quarter of 2018 being joint ventures of co-branded offerings.
In comparison:
22% of partnerships were joint ventures or co-branded in 2014:
33% in 2015;
57% in 2016; and,
71% last year.
Of the 22 new payer-provider partnerships announced this year, 20 product announcements explicitly emphasized value-based compensation, while compensation was implied but not mentioned in the final two product-based partnerships.
“Payers and providers continue to be interested in forming product-based partnerships,” Oliver Wyman stated when releasing the new data. “Our analysis … continues to show a steady increase of trend toward deeper partnership, with more co-branding, greater levels of value-based financial alignment, and other forms of closer collaboration and joint ventures.”
Oliver Wyman cited several “notable” new entrants:
In addition, Oliver Wyman noted that national payers Aetna and Cigna added to their growing rosters of joint ventures in 2018.
Speaking with Healthcare Dive, Tom Robinson, Partner, Health and Life Sciences at Oliver Wyman, described this year’s new ventures as varying in type, size, location, and model. He noted that 50/50 joint ventures with co-branding have gained in popularity, however, accountable care organizations (ACOs), pay-for-performance, and bundled-payment models also are being formed. Robinson believes these vertical integrations offer opportunities for innovation.
“The point of these partnerships is to create something new, rather than just building the same old offerings with a narrow network,” Robinson said. “Successful partnerships will take the opportunity to innovate around the product and experience now that the incentives, insight, investment and integration are all for it.”
In the video above, Oliver Wyman Health and Life Sciences Partner Tom Robinson discusses the emerging trend of payer-provider partnerships, and he highlights unique challenges and opportunities of these joint ventures. Click here to watch the video. (Photo and caption copyright: Oliver Wyman.)
Lower Costs, Improved Access, Through Payer-Provider Partnerships
In announcing Blue Cross Blue Shield of Rhode Island (BCBSRI), and Lifespan’s launch of coordinated healthcare plan BlueCHiP Direct Advance, BCBSRI President and Chief Executive Kim Keck pointed to the plan’s ability to drive down healthcare costs.
“We hear a consistent theme from our members—they want more affordable health plan options—and through our collaboration with Lifespan we are doing that,” Keck stated in a news release. “BlueCHiP Direct Advance is an innovative product that features Lifespan’s vast network of providers who are positioned to more effectively manage and coordinate a patient’s care. And, our partnership allows us to offer this new product at a cost that is 10% lower than our comparable plans.”
When Allina Health System of Minnesota and Aetna last year announced their partnership plans, Allina Chief Executive Penny Wheeler, MD, praised the ability of “payer-provider” partnerships to improve care coordination and increase access to preventive care.
Jim Schowalter, MPP, President and Chief of Executive of the Minnesota Council of Health Plans, told the Star Tribune the joint venture between the for-profit insurer and local health system would accelerate the shift within the state to value-based care.
“This is another effort in our state that moves us away from old fee-for-service systems,” Schowalter stated. “Working together, doctors and insurers can deliver better personal care and hold down medical expenses.”
While the future of the ACA and other healthcare reforms is uncertain, clinical laboratories and anatomic pathology groups should expect healthcare networks and insurers to continue to find ways of partnering. That means pathologists can expect to have an expanded role in helping providers improve patient outcomes and reduce healthcare spending.
Ascension’s refocus exemplifies challenges facing healthcare systems as shrinking reimbursement rates, stagnant inpatient admissions, and changing care models put a financial squeeze on traditional hospitals
Hospital-based medical laboratories and anatomic pathology groups are adapting rapidly to both external and internal forces in the healthcare continuum. Efforts to shift clinical care from hospitals to ambulatory settings is a trend that impacts how, where, and when ordering physicians request testing.
One good marker for this trend is the year-over-year change in hospital admissions. Data given to Congress in the latest MedPac (Medicare Payment Advisory Commission) report on Medicare payment policy show that, between the years 2006 and 2016, the cumulative percent change in the number Medicare inpatient discharges per beneficiary declined by 21.8%. During these same years, the cumulative percent change in the number of outpatient visits per Medicare beneficiary increased by 49%!
Now, Ascension Healthcare of St. Louis—reportedly the nation’s largest nonprofit healthcare system—also appears to be shifting its focus from hospital-based care to less expensive outpatient settings and services. It is doing this by using new staffing models and external businesses.
The move highlights an industry trend. Driven by continued economic, regulatory, and care delivery challenges, hospitals and health systems have been forced to consider different business/clinical models that better serve the evolving needs of their patients.
However, fewer hospitals and shrinking budgets also could impact hospital-based medical laboratories’ revenue, as hospitals seek new formulas for profitability.
In a video message, Ascension President and CEO Anthony R. Tersigni (above), EdD, FACHE, told 165,000 employees that Ascension would be reducing its hospital footprint and administrative costs, while exploring telemedicine and other outpatient care delivery models. This is potentially a major shift in how the nation’s largest nonprofit healthcare system does business, which could impact in-hospital and local independent medical laboratories. (Photo copyright: Ascension.)
New Strategic Direction
According to Modern Healthcare, Ascension President and CEO Anthony Tersigni, EdD, FACHE, outlined the company’s “advanced strategic direction” via video message to his 165,000 employees on March 23. He told his employees a new strategy was needed, due to dwindling reimbursements from both federal and private insurers, increasing regulatory complexity, skyrocketing pharmaceutical costs, and a shift from inpatient to outpatient care and from fee-for-service to value-based care.
“We are in the midst of major transitions, not only in how we provide care, but in how we are reimbursed for the services we provide,” Tersigni revealed in the video message.
Tersigni stated that the world’s largest Catholic health system needs a “dual transformation,” a process that would both “transform current healthcare delivery and operations to meet the challenges presented by the rapidly changing environment” and “safeguard a sustainable presence in its communities that responds to the changes in how people are accessing care.”
In his remarks, Tersigni outlined changes Ascension already had made to reduce administrative costs by $400 million. Further leadership and organizational restructuring is expected to net $61 million of additional savings in fiscal 2019.
In addition, he noted, the health system would save $57 million a year by “aligning its pay practices” to eliminate inconsistencies and follow common benchmarks.
Reducing Hospital Footprint and Controlling Patient Experience
Modern Healthcare also noted that the health system had “implemented new staffing models and productivity standards for nurses and other caregivers, as well as for nonclinical positions that align with other Ascension facilities.”
“There has always been a need for hospitals in our country, but not as many as we have today,” Tersigni told Modern Healthcare. “We don’t need to control everything. What we need to do is collectively control the patient experience along the continuum.”
In addition to selling off hospitals in cities where it is not the market leader, Ascension is looking for partners that will enable it to expand its reach in outpatient settings, such as:
Ascension’s plans also include minimizing business travel to reduce costs and hiring a Chief Digital Officer, whose job will include improving price transparency, Modern Healthcare reported.
Are the Days of Large Hospital-based Health Systems Numbered?
Healthcare Dive reported that admission rates for many health systems are declining as expenses are rising. That double-edge sword is causing the healthcare industry to question “whether the days of large hospital-based health systems are numbered.” The article also noted Tenet Healthcare (a network of 69 acute care and specialty hospitals in 11 states) and Community Health Systems (operator of 126 hospitals in 20 states) both are shedding hospitals in an effort to reduce debt. Tenet’s restructuring also includes laying off 2,000 employees.
According to Ascension’s website, the healthcare system operates more than 2,600 sites of care—including 153 hospitals and more than 50 senior living facilities—in 22 states and the District of Columbia. Nevertheless, it has not been immune from the multi-faceted pressures facing the healthcare industry.
Becker’s Hospital Review reported that Ascension’s operating income dropped 78% to $84.7 million in the first half of fiscal 2017, while operating revenue fell to $11.3 billion from $11.4 billion during the same period one year ago. The decline in revenues was largely attributed to the 2017 sale of Ministry Saint Joseph Hospital in Marshfield, Wis., and the divestiture of Door County Medical Center in Sturgeon Bay, Wis., in 2016.
Gwen MacKenzie, former Senior Vice President, Ascension Healthcare, and Ministry Market Executive, Ascension Michigan, oversaw Ascension Health in Michigan’s employee layoffs and management restructuring, which saw the 14-hospital system lay off 500 workers, including 20 executives and managers.
Concerning Ascension’s new direction, she told Modern Healthcare, “We think this is our new normal. The landscape we are navigating here is the new reality.”
If Ascension’s restructuring of its operations away from hospital-centric care is a harbinger of things to come, hospital-based and independent clinical laboratory leaders may be forced to revamp their business models as well, to survive the changes.
In an informal Request for Information (RFI), the Center for Medicare and Medicaid Innovation (CMMI) sought feedback on a “new direction to promote patient-centered care and test market-driven reforms that empower beneficiaries as consumers, provide price transparency, increase choices and competition to drive quality, reduce costs, and improve outcomes.”
CMS to ‘Move Away’ from Engineering Healthcare ‘From Afar’
Comments from healthcare providers, clinicians, states, payers, and stakeholders were accepted through November 20, 2017.
In a Wall Street Journal (WSJ) op-ed, CMS Administrator Seema Verma explained the agency’s process moving forward. “We will move away from the assumption that Washington can engineer a more efficient healthcare system from afar—that we should specify the processes healthcare providers are required to follow,” she wrote.
CMS Administrator Seema Verma (above) plans to lead the Center for Medicare and Medicaid Innovation “in a new direction” and may be signaling a willingness to give providers more flexibility with value-based care payment models for Medicare services. (Photo copyright: Healthcare Dive.)
The RFI states the new model design will follow six guiding principles:
1. Choice and competition in the market;
2. Provider choice and incentives;
3. Patient-centered care;
4. Benefit design and price transparency;
5. Transparent model design and evaluation; and,
6. Small scale testing.
Providers Need Freedom to Design New Approaches to Healthcare
Verma said CMS plans to review all Innovation Center models to determine “what is working and should continue, and what isn’t and shouldn’t.” She voiced concern that the complexity of some of the current models may have encouraged consolidation in the healthcare system, resulting in fewer choices for patients.
“We must shift away from a fee-for-service system that reimburses only on volume and move toward a system that holds providers accountable for outcomes and allows them to innovate,” Verma wrote in the WSJ op-ed. “Providers need the freedom to design and offer new approaches to delivering care. Our goal is to increase flexibility by providing more waivers from current requirements.”
Actual Progress of Value-based Healthcare ‘Herky-Jerky’
However, Neil Smiley, CEO of Loopback Analytics, which assists healthcare organizations with managing outcome-based care, believes the transition to value-based care may face stiffer headwinds under the new administration. He points to an August CMS proposal that canceled some mandatory bundled payment programs and scaled back others as an indication that healthcare transformation could be slowing.
“The pace at which CMS committed to rolling out value-based care is fundamentally different from the pace we’re currently seeing,” he told Health IT. “The progress toward value-based care, instead of this steady momentum they expected, is more of a herky-jerky fashion.”
The Health Care Transformation Task Force (HCTTF), a 42-member industry consortium, was among the stakeholders who responded to CMS’ RFI. In a 22-page letter, the task force reiterated its support for the healthcare system’s transformation to value-based payment and care delivery, while outlining areas for improvements. The group urged CMS to continue to develop new models while modifying, rather than abandoning, existing models that show promise and need time to achieve a lasting return.
“We would like CMS to continue support for promising models while balancing the current portfolio with new, innovative payment models,” Clare Wrobel, Director of Payment Reform Models at HCTTF, told Home Health Care News. “[But] it would be a mistake to discard current models that providers have already invested in and are showing real promise.”
Smiley, meanwhile, suggests clinical laboratory managers, pathologists, and other healthcare providers keep watch as healthcare transformation continues to evolve.
“The fee-for-service model, love it or hate it, is not dying. The organism has adapted,” he told Health IT. “For those that were aggressive early adopters of value-based care and really believed what they were hearing, and have gone fully after value-based care, some of them may feel a little exposed. If they go too hard too fast, they may suffer economically if they misjudge the pace at which this moves.”
