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.
“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:
Ascension in St. Louis, Mo., plans to close an Indiana hospital and nine medical practices and lay off 133 employees.
“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:
Mayo Clinic in Rochester, Minn., has 43 IT job 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.
As mandatory screenings for private industry workers increases, some states launch free COVID-19 testing for state employees, while engaging medical laboratories to provide such testing
Amid the SARS-CoV-2 pandemic, welcoming employees back to work is not as simple as opening the company’s doors. Businesses based in some areas of the US and Canada are being required by state and provincial governments to conduct employee COVID-19 screenings. For clinical laboratories, the increase in mandatory screening programs could mean an expanding market for employee testing programs and opportunities for lab outreach programs.
But companies and medical laboratories may also face legal and regulatory risks as workplaces reopen and people return.
For example, how do clinical laboratory managers ensure their labs have the information they need to respond to new rules and regulations, and do employers have recourse should an employee receive a COVID-19 test report with an incorrect result?
Not COVID-19 Screening Can Lead to Fines, Imprisonment
Is there existence of “new or worsening symptoms,” such as fever or chills, difficulty breathing, and cough?
Has the employee travelled outside Canada in the past 14 days?
Has the employee had close contact with other confirmed or “probable” COVID-19 cases?
A “probable” case is “a person with symptoms compatible with COVID-19 AND in whom laboratory diagnosis of COVID-19 is inconclusive,” according to a blog post by Justin P’ng, Employment and Labor Lawyer/Associate at international law firm Fasken in Toronto.
“Employers [in Ontario] must now specifically comply with the requirements of the Screening Tool and to implement such screening at any physical workplaces it operates in the province,” P’ng wrote. “Failure to comply can lead to significant penalties, including potentially fines and imprisonment under the legislation.”
It is possible the new requirements may ease Ontario workers’ minds about heading back to work during the pandemic. A Canadian workforce survey of employers and employees during July 2020 by PricewaterhouseCoopers (PwC) Canada found:
Most employers (78%) expect a return to the workplace in 2020.
Just one in five employees indicated they want to go back to the workplace full-time.
Michigan Makes Remote Work Mandatory
In the US, state rules enforced by the Michigan Occupational Safety and Health Administration (MIOSHA) require employers—for infection prevention reasons—to establish remote work programs for employees, unless it is not feasible for employees to work away from the workplace.
“The employer shall create a policy prohibiting in-person work for employees to the extent that their work activities can feasibly be completed remotely,” MIOSHA said.
Similar to the Ontario law, Michigan employers are also required to establish COVID-19 screenings. The MIOSHA rules direct employers to “conduct a daily entry self-screening protocol for all employees or contractors entering the workplace, including, at a minimum, a questionnaire covering symptoms and suspected or confirmed exposure to people with possible COVID-19, together with, if possible, a temperature screening.”
Michigan employers not in compliance with the state’s requirements for office work may be fined up to $7,000 per violation, a McDonald Hopkins Insights article noted.
Furthermore, anti-retaliation law in Michigan prohibits employers from terminating or “retaliating against” employees who oppose violation of the law or report COVID-19 “health violations,” the McDonald Hopkins Insights article added.
However, Michigan businesses may have protection under the COVID-19 Response and Reopening Liability Assurance Act. The law states a “person who acts in compliance with all federal, state, and local statutes, rules, regulations, executive orders, and agency orders related to COVID-19 that had not been denied legal effect at the time of the conduct or risk that allegedly caused harm is immune from liability for a COVID-19 claim.”
The law defines a “person” as “an individual, partnership, corporation, association, governmental entity, or other legal entity, including, but not limited to, a school, a college or university, an institution of higher education, and a nonprofit charitable organization. Person includes an employee, agent, or independent contractor of the person, regardless of whether the individual is paid or an unpaid volunteer.”
New York Launches Free RT-PCR Tests for Transit Employees
Meanwhile, in New York, free COVID-19 tests are now available on a voluntary basis to 2,000 frontline employees of the Metropolitan Transit Authority, a news release states.
“Quality COVID-19 testing is critical to helping our nation’s frontline workers do their jobs as safely as possible,” Wendi Mader, Executive Director of Employer Population Health at Quest Diagnostics, said in the news release.
New Special Report Available on COVID-19 Employee Testing Programs
As the SARS-CoV-2 pandemic progresses, laws, regulations, and rules pertaining to COVID-19 employee testing and screening will likely continue to develop—and they will vary by area and by test type—making them a challenge to interpret, track, and ensure compliance.
This exclusive report offers guidance, best practices, and insights necessary to launch and operate high quality, compliant COVID-19 employee testing programs. Clinical laboratories and employers tasked with developing and maintaining coronavirus testing programs will gain critical insights and data from this invaluable special report. (Photo copyright: Dark Intelligence Group.)
Included in the report:
Ten regulatory essentials for launching a COVID-19 testing program
Multiple recent studies reveal a substantial number of patients continue to delay needed healthcare in the months since the onset of the SARS-CoV-2 outbreak
Based on an analysis of hospital emergency department (ED) usage, federal researchers concluded that patients continue to be cautious when visiting healthcare providers, including clinical laboratories, and that people are altering how they seek and utilize emergency care due to the COVID-19 pandemic. This not only reduces the number of typical test orders from the ER to the hospital lab, but also reduces the source of inpatient admissions.
Between March 29 and April 25 of this year, facilities the CDC examined recorded 1.2 million visits to EDs, compared to 2.1 million visits between March 31 and April 27 of last year. The steepest decrease in patient demographics was for individuals under the age of 14, women, and people living in the Northeast region.
The CDC’s data showed that 12% of ED visits were for children in pre-pandemic 2019, which dropped to 6% during the 2020 pandemic period. The CDC included ED visits from hospitals in 47 states (excluding Hawaii, South Dakota, and Wyoming) and captured information from approximately 73% of ED visits in the US.
Delaying Healthcare Visits Worsens Medical Conditions, Reduces Revenues
ED visits are an important referral source for inpatient admissions. Fewer patients in EDs means lost revenue for hospitals. However, one positive aspect of the waning number of ED visits is that it may be keeping patients with non-emergency situations away from emergency departments, thus reducing the overuse of costly ED visits. But healthcare professionals are concerned that individuals also may be avoiding or delaying care when needed, which could worsen medical situations and outcomes.
“We saw people, with COVID-19 and without, coming into the ED who were very ill,” Vik Reddy, MD, Chief Medical Officer at Wellstar Kennestone Hospital and Wellstar Windy Hill Hospital in the Atlanta area, told Modern Healthcare. He noted that some patients delayed care for critical non-COVID-19 illnesses. “The good news is that we’re seeing that trend reverse this time around. It was scary in March when we knew that people weren’t coming into the ED for heart attacks.”
The NSSP’s analysis concluded that the report’s findings were subject to at least four limitations:
The number of hospitals reporting to NSSP changes over time as facilities are added or closed. For example, 3,173 hospitals reported data in April of 2019, while 3,467 reported data in April 2020.
Diagnostic categories rely on the use of specific codes, which were missing in 20% of the ED visits reported.
NSSP coverage is not uniform across or within all the participating states.
The analysis is limited only to ED visits and does not take into account patients who did not go to an ED, but instead received treatment in other healthcare environments, such as urgent care clinics.
The graphics above are taken from a Washington Post article which reported that the newspaper’s analysis of smartphone location data of hospital traffic in 2020 showed the “drop” in hospital usage had turned into “a crash,” compared to the same two months last year, and that, “As in many other industries, those lost visits represented a widespread financial crisis for hospitals and other healthcare providers, even in places the novel coronavirus hardly touched.” (Graphics copyright: The Washington Post.)
Additional Studies Show Patients Avoiding Hospital EDs, Delaying Care
Other sources also are reporting similar findings regarding consumer attitudes towards seeking medical care during the COVID-19 pandemic. A PricewaterhouseCoopers survey released in May found that about 45% of 2,500 consumers surveyed plan to forgo their annual physical in 2020, due to the pandemic, Modern Healthcare reported.
In addition, an Optum Consumer Pulse Survey released in May found that nearly 20% of 700 surveyed individuals stated they were likely to avoid hospital EDs even if they were showing signs of a heart attack or appendicitis. Another 40% stated they were likely to avoid the ED if they had a cut that required stitches.
In “Americans Are Delaying Medical Care, and It’s Devastating Health-Care Providers,” The Washington Post analyzed hospital use during the pandemic based on smartphone tracking data. WaPo’s report found a significant drop in patients seeking in-person healthcare with many areas across the country reporting a 50% reduction in patients when compared to last year.
The article also states that almost 94 million people have delayed medical care due to the COVID-19 pandemic, and that 66 million of those individuals needed medical care unrelated to the virus but did not receive it.
These studies and others are showing a pattern. The COVID-19 pandemic has changed when and where patients access healthcare, and if the trend continues, it could have a long-term impact on clinical laboratories. Since fewer people are seeking medical care, fewer laboratory tests are being ordered and performed, which means less work and revenue for the nations’ hospital and independent clinical labs.
The software applications (apps) and hardware monitoring devices involved in digital therapeutics enable physicians and patients to target and alter specific behaviors that affect certain medical conditions, such as substance abuse or depression. Combined with or without drugs, digital therapeutics are achieving positive results, according to the United Kingdom’s PwC (PricewaterhouseCoopers) Health Research Institute (PwC HRI).
The report goes on to state that digital therapeutics “is
reshaping the landscape for new medicines, product reimbursement and regulatory
oversight … [and that] new data sharing processes and payment models will be
established to integrate these products into the broader treatment arsenal and
regulatory structure for drug and device approvals.
“Connected health services,” the report continues, “enabled by devices that transmit data or connect to the Internet, give additional visibility into care delivery and new ways to improve patient outcomes.”
Digital therapeutics combine apps and monitoring devices for
the management and treatment of medical conditions. While similar to customer
wellness apps, digital therapeutics focus on specific clinical outcomes.
The non-profit Digital Therapeutics Alliance says that, unlike common “wellness” apps, digital therapeutics “possess the unique ability to incorporate additional functionalities into a comprehensive portfolio of synchronous products and services. This includes potential integration with mobile health platforms; the provision of complementary diagnostic or adherence interventions; the ability to pair with devices, sensors, or wearables; the delivery of interventions remotely; and integration into electronic prescribing, dispensing, and medical record platforms.”
“Digital therapeutics are the next frontier,” Sai Jasti, Chief Data and Analytics Officer, GlaxoSmithKline (NYSE:GSK), told PwC HRI. “I think we will see a lot more collaboration between pharmaceutical and technology companies to drive this forward, ultimately to the benefit of patients.”
Digital Therapeutics That Already Have FDA Approval
Digital therapeutics and their connected devices are subject
to the approval process of the federal Food and Drug Administration (FDA), and
some have already received that coveted clearance:
reSET from Pear Therapeutics is a 90-day prescription digital therapeutic (PDT) for substance use disorder (SUD). The Boston-based company also worked with Sandoz Inc., a division of Novartis, to receive FDA approval for reSET-O, a PDT for treating individuals with Opioid Use Disorder (OUD).
“Digital technologies and data science have incredible potential to unlock the next chapter of medical innovation and to help individuals finally take control of their own health in a meaningful way,” said Richard Francis, Division Head and CEO, Sandoz, in a press release. “New digital therapeutics such as reSET-O also have the potential to fundamentally change how patients interact with their therapies and thus improve patient outcomes.”
Both reSET and reSET-O are software mobile apps that use cognitive behavioral therapy (CBT) to help individuals struggling with addictions.
“Nearly 50,000 drug overdose deaths involving opioids, including prescription pain medications and heroin, took place in the U.S. in 2017,” said Corey McCann, MD, PhD, President and CEO of Pear Therapeutics, in the press release following receiving FDA approval. “There is an urgent need for new and innovative therapeutics to address this public health epidemic. This groundbreaking decision by the FDA ushers in a new standard for treating patients with Opioid Use Disorder and it signals a new path for therapeutic software to be used in conjunction with pharmacotherapy to improve efficacy.”
Natural
Cycles is a birth control app created by a Sweden-based company of the same
name. It was approved by the FDA in 2018. This mobile app helps women track
their fertility to prevent unwanted pregnancies via the rhythm method. The app
analyzes data from past menstrual cycles and body temperature readings to
determine when the user is most fertile. On the days the user is most likely to
be ovulating, the app displays “Use Protection” on the mobile device’s screen.
“We know that women are more likely to use contraceptive methods when they have a variety of methods available to them, and the reality is that not every method is going to work for every woman,” Rebecca Simmons, PhD, Research Assistant Professor, Department of Obstetrics and Gynecology, University of Utah, told Health. “This is really exciting, in the sense that the more methods we have, the more likely it is that people can find something that works for them—and then can avoid unwanted pregnancy.”
Apple, headquartered in Cupertino, Calif., received FDA clearance in 2018 for an electrocardiogram (ECG) app for its Apple Watch Series 4 that allows users to take an ECG from their wrist to detect irregular heart rhythms and atrial fibrillation (AFIB).
“The role that technology plays in allowing patients to capture meaningful data about what’s happening with their heart—at the moment when it’s happening, like the functionality of an on-demand ECG—could be significant in new clinical care models and shared decision-making between people and their healthcare providers,” said Nancy Brown, CEO of the American Heart Association, in a press release.
Patients, Providers, and Big Pharma All Like Digital
Therapeutics
There is some evidence that patients and healthcare
providers are intrigued and willing to try digital therapeutics. In a PwC HRI survey,
more than 50% of respondents said they “would be somewhat or very likely to try
an FDA-approved app or online tool for treatment of a medical condition.”
The graphic above is taken from the PwC HRI 2019 annual report on digital therapeutics and connected care. It shows that “a majority of consumers surveyed are interested in FDA approved digital apps or online tools to treat their medical conditions.” (Graphic copyright: PwC HRI.)
Pharmaceutical companies also are interested in digital therapeutics. A 2018 PwC HRI survey found that 80% of pharmaceutical executives had plans to invest in digital therapeutics in the near future.
With precision medicine and pharmacogenetics, clinical laboratories
could play an essential role in supporting digital therapeutics in the future. But
to truly be competitive in this space and take advantage of the opportunity, medical
laboratories will need to increase their information technology and digital
capabilities.
Recent studies exploring the economics behind the high price of US healthcare independently point to the price of labor, goods, services, administrative costs, and pharmaceuticals as primary reason why the US spends almost twice as much as peer countries on healthcare
It is regularly reported that the cost of healthcare in the United States is notably more expensive that in most developed nations. Overutilization of medical services in this country is often given as a reason why this is true. But the findings of a new research study suggest that the reason healthcare in the US is expensive is not due to overutilization. Rather, it is because of the much higher prices American patients pay for services, including clinical laboratory testing.
This recent study contradicts the claims of some experts who say overutilization is to blame for the high cost of healthcare in the United States. The research was conducted by researchers at the Institute for Health Metrics and Evaluation (IHME) in Seattle and the UCLA David Geffen School of Medicine. They attribute the overarching factor in high healthcare costs not to high utilization of services—such as clinical laboratory and anatomic pathology testing—or increased rates of illness.
Instead, the researchers found that it’s simply a matter of higher prices for healthcare delivered in this nation, compared to other healthcare systems around the globe. This is what makes America’s healthcare system so expensive. And, lacking financial incentives for stakeholders to lower prices, these researchers suggest that continued high costs could negatively impact providers’ quality of care.
High Cost of Diagnostic Services, including Medical Laboratory Testing
The IHME/UCLA researchers published their findings in the Journal of the American Medical Association (JAMA), in which they argued that increases in US healthcare cost are independent of increases in:
Disease prevalence;
US population age;
Use of healthcare services; or,
Overall population size.
Joseph L. Dieleman, PhD, Assistant Professor at IHME and lead researcher on the investigation, stated, “After adjustments for price inflation, annual healthcare spending on inpatient, ambulatory, retail pharmaceutical, nursing facility, emergency department, and dental care increased by $933.5 billion between 1996 and 2013—from $1.2 trillion to $2.1 trillion.”
Data produced by the study identified one overlying factor in increased spending—increased prices. According to Dieleman, health spending in 2015 “reached $3.2 trillion and constituted 17.8% of the US economy.”
In an editorial response to Dieleman’s investigation, also published in JAMA, Patrick H. Conway, MD, MSc (above), President and CEO of Blue Cross Blue Shield of North Carolina in Durham, stated that “the United States is on an unsustainable growth path in terms of healthcare costs and must get costs under control.” He added that data from Dieleman’s study has important implications for quality of healthcare, which may include medical laboratory diagnostics. (Photo copyright: Duke University.)
Price Spirals and Artificial Price Hikes: No Real Incentive for Regulation
Pricing for medical care is notoriously opaque. Patients are often unaware of the cost of services until the bill arrives. This lack of transparency prevents patients from comparing prices between healthcare providers and medical laboratories.
To try and create some cost transparency for consumers, Conway noted that some states, such as Maryland and Vermont, have adopted multi-payer payment models or all-payer rate settings. However, there could be resistance to such reforms, according to some experts.
No Incentive to Lower the Prices of Medical Services
An opinion piece in the Wall Street Journal, Keith Lemer, CEO, WellNet Healthcare Group, shared a similar view. He stating that insurers and preferred provider organizations (PPOs) have no “natural incentive to keep provider prices down.” Lemer looks at the Affordable Care Act and its establishment of a medical loss ratio rule, which “requires insurers covering individuals and small businesses to spend at least 80 cents of every premium dollar on medical expenses.”
Lemer uses the cost of a routine blood test as an example, stating that when providers raise costs of such tests, “insurers can charge higher premiums, while also boosting the value of their 20% share,” which goes “towards administrative costs and profits.”
Lemer argues that the deck is stacked against consumers, and that the medical loss ratio “encourages insurers to ignore providers” artificial price hikes,” while attracting customers “with the promise of steep discounts through their PPO plans.” The resulting affect is what Lemer calls a “price spiral” that’s difficult to escape.
In comparison to 10 other high-income countries the US spends “approximately twice as much,” Papanicolas noted. She added that despite the higher spending in the US, the nation “performs poorly in areas such as healthcare coverage and health outcomes.”
To illustrate the difference in average costs, Papanicolas and colleagues listed “comparison prices” on a series of healthcare services between countries in 2013. For example, the price of a single computed tomography (CT) scan varies widely:
$896 (US);
$97 (Canada);
$279 (Netherlands); and,
$500 (Australia).
The high prices of clinical laboratory (AKA, pathology laboratory in Australia) diagnostics have already caused a sharp decline in the use of important imaging utilization and are at risk of affecting other aspects of clinical pathology, such as anatomic pathology (histopathology in AU) services.
PricewaterhouseCoopers (PwC) Health Research Institute’s annual medical cost report predicts 2018 medical costs will rise by 6.5% and that “price continues to be a major driver of healthcare costs” that are outpacing the economy. PwC recommends “increasing collaboration across the industry” to address the growing issue of rising medical costs and shift the burden of cost away from patients.
Clinical Laboratories Contribute to High Costs
Although US healthcare cost is a topic of intense conversation, little change may come if there is no incentive to change. Each of the recent JAMA published articles ends on the same repeated note: a plea for active debate among policy makers, healthcare providers, patients, insurers, and politicians, with the goal of decreasing healthcare costs, without sacrificing patient care.
This is also true for clinical laboratory and anatomic pathology stakeholders, which are critical aspects of the healthcare continuum, and therefore, contribute to the overall financial burden on healthcare consumers.
