As with clinical laboratories, worker shortage is affecting large retail pharmacy chains and independent pharmacies alike
Staffing shortages in clinical laboratories and anatomic pathology groups caused by the Great Resignation is having a similar impact on retail pharmacy chains. Consequently, pharmacy chains are reducing store hours and even closing sites, according to USA Today.
As Dark Daily covered in “Clinical Laboratories Suffer During the ‘Great Resignation,” the US Bureau of Labor Statistics reported that from August 2021 through December 2021, the healthcare and social assistance workforce saw nearly 2.8 million workers quit—an average of 551,000 people during each of those months. By comparison, in December 2020, 419,000 healthcare workers left their jobs.
Pharmacies now report similar shortages in qualified workers, partly due to the sharp decrease in revenue from COVID-19 vaccinations, but also due to worker burnout. Both developments have counterparts in clinical laboratories as well.
“I’m concerned that without the help from the COVID-19 vaccinations that everyone needed, these pharmacies that were able to tough it out for another year or two might not be able to continue,” B. Douglas Hoey, PharmD, CEO of the National Community Pharmacists Association (NCPA), told USA Today. Clinical laboratories that processed large numbers of SARS-CoV-2 diagnostics have experienced the same sudden drop in revenue causing similar difficulties maintaining staffing levels. (Photo copyright: Cardinal Health.)
Staffing Shortages Leading to Safety Concerns
According to the Washington Post’s coverage of a study conducted in 2021 of 6,400 pharmacists in various retail and hospital environments, a majority did not feel they could conduct their jobs efficiently or safely.
“75% of the pharmacists in [the] survey disagreed with the statement ‘Sufficient time is allocated for me to safely perform patient care/clinical duties.’”
“71% said there were not enough pharmacists working to ‘meet patient care/clinical duties.’”
“65% said ‘payment for pharmacy services’ did not support their ‘ability to meet clinical and non-clinical duties.’”
“Workplace conditions have pushed many pharmacists and pharmacy teams to the brink of despair,” said the board of trustees of the American Pharmacists Association (APhA) in a press release, the Washington Post reported. “Pharmacy burnout is a significant patient safety issue. It is impacting patients today with delayed prescription fulfillment, unacceptable waits for vaccines and testing, and potential errors due to high volume, long hours, and pressure to meet performance metrics.”
This is a sentiment that has been repeated across every facet of healthcare—including in clinical laboratories—where staff shortages are being felt.
Shortage of Pharmacists or Lack of Morale?
In “Drugstores Make Slow Headway on Staffing Problems,” the Associated Press outlined from where it believes the staffing problems originate. “There isn’t a shortage of pharmacists. There’s just a shortage of pharmacists who want to work in those high-stress environments that aren’t adequately resourced,” Richard Dang, PharmD, Assistant Professor of Clinical Pharmacy at the University of Southern California (USC), told the Associated Press.
“The pressure never let up. No matter how mind-numbing and repetitive the work could get, we had to work with constant vigilance, as there was absolutely no room for error,” Bator wrote.
“We techs were left unsupported and unmentored throughout the pandemic,” she continued. “No one cared if we were learning or growing in our job, and there was little encouragement for us to enter training or residency programs. We were just expendable foot soldiers: this is not a policy that leads to long-term job retention.”
Healthcare workers feeling burnt out and under-appreciated during the pandemic led to mass resignations that produced staffing shortages throughout the industry. It appears this trend has caught up to pharmacies as well.
Workforce Wasn’t Ready
Local and chain pharmacies played an important role in the COVID-19 pandemic. Pharmacists distributed COVID-19 tests and treatment to their communities. But for many it was a struggle to keep up.
Stefanie Ferreri, PharmD, Distinguished Professor in Pharmacy Practice and Chair of the Division of Practice Advancement and Clinical Education at University of North Carolina’s Eshelman School of Pharmacy, told the Associated Press that she felt the expanding role of pharmacies in public health was “awesome” but stated that “the workforce wasn’t quite ready” for what took place during the pandemic.
Much like Bator recounted in her essay, pharmacy workers suddenly had new responsibilities, longer working hours, and little room for error.
“There are multiple stories about pharmacists just getting overwhelmed. The stress level and burnout is high,” Dima M. Qato, PharmD, PhD, told USA Today. Qato is Hygeia Centennial Chair and Associate Professor (with tenure) in the Titus Family Department of Clinical Pharmacy at the University of Southern California. “So, pharmacists leave, and stores have to shorten” their hours, she added.
Scheduling and Patience Can Help
What can be done to soften some of the issues staff shortages are causing? Ferreri suggests that pharmacies set appointment times for regular customers so that a pharmacist’s workload can be more predictable. An appointment system can ease stress for both the pharmacist and patient. Ferreri advises customers to be patient when it comes to their prescriptions. She suggests patients give pharmacies more than a day’s notice for refills.
“I think on both sides of the counter, we need to all have grace and realize this is a very challenging and stressful time for everyone,” said Brigid Groves, PharmD, Vice President, Pharmacy Practice at the American Pharmacists Association.
With burnout, staff shortages, and stress affecting nearly every aspect of the healthcare industry, having patience with each other will go a long way to helping clinical laboratories, pharmacies, and patients navigate the road ahead.
Growing interest in more transparency for the prices of prescription drugs is reflected in a study published in the Journal of the American Medical Association (JAMA) that highlights disparities in pharma prices for patients, pharmacies, and payers
However, while reference pricing and pricing databases help savvy patients compare prices across a range of procedures, much about pharmaceutical pricing remains shrouded in mystery. This is why calls for greater transparency in how prescription drugs are priced are increasing as well.
The Trump administration, state governments, and advocacy groups have each targeted drug costs as a problem in the current healthcare system. And a March 2018 study published in the Journal of the American Medical Association (JAMA) may further fuel the fires facing big pharma.
Overpayments and the Silence Behind Them
Analyzing 9.5 million claims from Optum’s Clinformatics Data Mart over the first half of 2013, researchers found that approximately 23% of all claims involved overpayments—situations in which the co-pay charged to the patient exceeded what the insurer paid the pharmacy to fill the prescription.
While data from 2013 might not reflect the current state of pharmaceutical pricing, the study brings exposure to trends in both politics and media coverage surrounding the industry.
The study authors found that overpayments totaled $135-million in 2013. Generic medications saw a higher portion of overpayments with more than one in four generic prescriptions costing patients more than what payers paid the pharmacy. However, in the 6% of claims involving branded medication, overpayments were nearly twice as high with an average overpayment of $13.46 per claim.
The researchers also cited data from a National Community Pharmacists Association (NCPA) survey of 628 pharmacies in which 49% claimed to have seen 10-50 occurrences of “clawback fees” in the past month. A further 35% reported seeing more than 50 clawback fees in the past month. These “fees” are part of contractual obligations that payers can use to recoup such overpayments to pharmacies.
Other contractual arrangements, such as “gag clauses” (AKA, non-disclosure agreements), wherein pharmacists cannot disclose to patients when their copay exceeds the cost of filling the prescription without coverage, have garnered coverage in the media.
The Hill recently outlined efforts from senators to stop this practice for both traditional insurance plans and Medicare Advantage and Part D participants. “Americans have the right to know which payment method—insurance or cash—would provide the most savings when purchasing prescription drugs,” Senator Susan Collins (R-Maine) told The Hill.
Rebates, Secretive Deals, and Red Tape in Government Crosshairs
Rebates are another contested aspect of current pricing models. Traditionally, pharmacy benefit managers (PBMs) serve as a middleman between pharmaceutical companies and pharmacies to negotiate prices and maintain markets. PBMs negotiate deals for insurers in the form of rebates. Insurers, however, are using these savings to offer lower premiums, rather than forwarding the savings directly to the customer.
UnitedHealthcare unveiled plans to pass these rebates directly to consumers in early March, The Hill reported.
In a press release, Department of Health and Human Services (HHS) Secretary Alex M. Azar II stated, “Today’s announcement by UnitedHealthcare is a prime example of the movement toward transparency and lower drug prices for millions of patients that the Trump Administration is championing. Empowering patients and providers with the information and control to put them in the driver’s seat is a key part of our strategy … to bring down the price of drugs and make healthcare more affordable.” (Photo copyright: Washington Post.)
The Trump Administration also recently outlined their new “American Patients First” plan for reducing drug prices and out-of-pocket costs for patients.
Key elements of their proposed approach include:
Eliminating gaming of regulations, such as the Risk Evaluation and Mitigating Strategies (REMS) requirements manufacturers use to avoid sending samples to creators of generics;
Restricting rebates through Anti-Kickback Statue revisions; and,
Eliminating gag clauses or clawback fees.
However, pharma industry coverage of the plan is mixed. MarketWatch sees little to worry about, predicting, “[the plan] isn’t expected to hurt drug makers or pharmacy-system middlemen.” Meanwhile, Forbes claims, “[the plan] represents a sea of change in pharmaceutical pricing policy, one that will have a significant effect on drug prices in the future.”
Anatomic pathology groups, medical laboratories, and other diagnostics providers can view this as yet another example of healthcare providers trying to shore up financials and protect profits by protecting sensitive pricing information, as the industry faces increasing scrutiny. Nevertheless, regardless of the outcome, these latest trends emphasize the role that transparency is likely to play—and how clinical laboratories will be impacted—as healthcare reform progresses, both in terms of public relations and regulatory requirements.
Challenges getting paid likely to continue as high deductibles make patients responsible for paying much more of their healthcare bills
Rising out-of-pocket costs for healthcare consumers is translating into increasing amounts of red ink for hospitals and healthcare providers struggling to collect bills from patients with high-deductible health plans (HDHPs). Clinical laboratories and pathology groups are unlikely to be immune from these challenges, as increasing numbers of patients with smaller healthcare debts also are failing to pay their bills in full.
That’s according to a recent TransUnion Healthcare analysis of patient data from across the country. It revealed that 99% of hospital bills of $3,000 or more were not paid in full by the end 2016. For bills under $500, more than two-thirds of patients (68%) didn’t pay the full balance by year’s end (an increase from 53% in 2015 and 49% in 2014). The study also revealed that the percentage of patients that have made partial payments toward their hospital bills has fallen dramatically from nearly 90% in 2015 to 77% in 2016.
Increased Patient Responsibility Causing Decrease in Patient Payments
“The shift in healthcare payments has been taking place for well over a decade, but we are seeing more pronounced changes in how hospital bills are paid during just the last few years,” Jonathan Wilk, Principal for Healthcare Revenue Cycle Management at TransUnion (NYSE:TRU), said in a statement.
Millions of Americans are in high-deductible health plans. And, as the graphic above illustrates, that number has been increasing since the ACA was signed into law in 2010. (Graphic copyright: Reuters.)
While the Affordable Care Act (ACA) has increased the number of Americans receiving medical coverage through Medicaid or commercial insurance, TransUnion noted in its statement that hospitals still wrote off roughly $35.7 billion in bad debt in 2015. By 2020, TransUnion predicts that figure will continue to rise, with an estimated 95% of patients unable to pay their healthcare bills in full by the start of the next decade.
“Higher deductibles and the increase in patient responsibility are causing a decrease in patient payments to providers for patient care services rendered. While uncompensated care has declined, it appears to be primarily due to the increased number of individuals with Medicaid and commercial insurance coverage,” John Yount, Vice President for Healthcare Products at TransUnion, said in the TransUnion statement.
Collecting Patients’ Out-of-Pocket Costs Upfront
According to Reuters, hospitals in states that did not expand Medicaid under Obamacare have witnessed a more than 14% increase in unpaid bills as the number of people using health plans with high out-of-pocket costs increased. For hospitals in those states, HDHPs are impacting their bottom lines.
“It feels like a sucker punch,” declared Chief Executive Officer John Henderson of Childress Regional Medical Center, Texas Panhandle Region, in a Bloomberg Business article. “When someone has a really high deductible, effectively they’re still uninsured, and most people in Childress don’t have $5,000 lying around to pay their bills.”
A recent report from payment network InstaMed found that 72% of healthcare providers reported an increase in patient financial responsibility in 2016, a trend that coincides with a rise in the average deductible for a single worker to $1,478, more than double the $735 total in 2010.
In response to the increase in patient responsibility, hospitals and other providers are turning to new tactics for collecting money directly from patients, including estimating patients’ out-of-pocket payments and collecting those amounts upfront.
“Hospitals have gotten much more aggressive in trying to collect at time of service, because their ability to collect on self-pay amounts decreases significantly when the patient leaves the building,” Arquilla noted. “You can’t say, ‘Give me your credit card’ to someone in the emergency room bleeding from a gunshot wound, but you can to someone going in for an elective procedure.”
Revenue loss due to unpaid medical bills among states that complied with Medicaid Expansion under the ACA has increase so dramatically, some hospitals are now offering patients prepayment discounts and no-interest loans to ensure payments. Clinical laboratories and anatomic pathology groups should develop strategies to respond to the increase collections from patients at the time of service. (Graphic copyright: Reuters.)
Richard Gundling, a Senior Vice President at the Healthcare Financial Management Association (HFMA), told Kaiser Health News that an estimated 75% of healthcare and hospital systems now ask for payment at the time services are provided. To soften the blow, some healthcare systems are providing patients with a range of payment options, from prepayment discounts to no-interest loans.
Novant Health, headquartered in North Carolina, is among those healthcare systems offering patients new payment strategies. Offering no interest loans to patients has enabled Novant to lower its patient default rate from 32% to 12%.
“To remain financially stable, we had to do something,” April York, Senior Director of Patient Finance at Novant Health, told Reuters. “Patients needed longer to pay. They needed a variety of options.”
Providers Must Adapt to New Patient Procedures
“Doctors need to understand the landscape has changed. A doctor’s primary concern use
While clinical laboratories and anatomic pathology groups traditionally have not collected money directly from patients, Herrick says healthcare providers must accept that the rules of the game have changed. “Patients are more cost-conscious now. That means patients will question their physicians about costs for procedures,” he adds.
