Inflation has hit us all, and healthcare facilities are no different. Where are they feeling it most?
“A new AHA report highlights the significant growth in expenses across labor, drugs, and
supplies… as well as the impact that rising inflation is having on hospital prices” (AHA, 2022).
Labor has been affected with shortages of more than 100,000 open positions since pre-pandemic,
higher wage demands follow this demand, and the necessity to hire contract staff at higher rates,
in fact, reliance on contract staff has risen 213% since 2019. Drug costs are up 36.1% per patient
adding to the bottom line at alarming rates, not to mention to struggle to keep them in stock at
that higher cost, which then reflects on having a staff member to deliver the drugs to the patients.
Supply costs have also risen 20.6% since 2021 mid-pandemic, to now, when even attaining those
supplies has become a challenge along with paying for them. “According to BLS data, hospital
prices have grown an average 2.1% per year over the last decade, about half the average annual
increase in health insurance premiums” (AHA, 2022). All of this raises the expenses for facilities,
insurance companies, and worst of all, the patient.
In April of 2020, we saw the peak use of telehealth during this pandemic. At that point, around
70% of health-related appointments were via telehealth. One company, Kaiser Permanente,
provides its members with 24/7 care that can keep people out of our emergency rooms
unnecessarily, which can be 12 times more expensive than visiting an office (Pearl & Wayling,
2022). However, telehealth is only sustainable given we have the providers willing to use it. Pre-
pandemic, providers were reimbursed at a lower rate than in person visits. But in March of 2020,
the Centers for Medicare and Medicaid Services (CMS) stated that telehealth visits will be
reimbursed the same as in person. When the government declares that COVID is no longer a
public health emergency, the equal reimbursement will only last another 151 days after this, then
it goes back to previous rates. This, unfortunately but not surprisingly, will not incentivize
provides to utilize telehealth (Jordan, 2022).
This could then impact a large portion of the patient’s utilizing telehealth. If providers no long
offer telehealth, many urban area residents may not be able to afford to travel for appointments,
take a half/full day off from work, or arrange and afford childcare. These patients will become
“noncompliant,” but only due to their inability to attend in person appointments (Pearl &
Wayling, 2022).
This form of visits, if lost, would be a big hit to some very ill patients requiring visits to multiple
specialist all over the country. Telehealth has provided patients with the ability to get in contact
with these specialists much faster and easier than regular in person visits, which speeds up the
care they need. Even for the patients who have severe diseases such as ALS that needs to see a
specialist across town, this visit requires a wheelchair-accessible van rental, a driver, and
someone to accompany her to her visit. These types of patients benefit from the ability to receive
their care without having to leave the comfort of their own home (Jordan, 2022).
One of the new healthcare trends that we are exploring is artificial intelligence and automation.
With the use of AI and automation comes improved patient outcomes, lower administrative costs,
and less physician burnout. AI is used in patient care by predictive analytics and clinical decision
support systems (Steger 2020). While there is a cost to purchase AI software, in the long run it
saves money by predicting complications so that they may be abated or prevented. AI lowers
administrative costs by automating some administrative workflow. For example, the process for
obtaining prior authorizations is extremely time consuming and with an increase in procedures
required prior authorization comes an increased need for employees to fulfil the demand. There is
a system called Olive that is being utilized to automate some or all the prior authorization
process. Olive can check with the plans to see if authorization is required, initiate the request and
update the status. Using Olive also makes the process more efficient leading to less denied claims,
while lessening the need for additional staff. AI also reduces physician burnout which leads to
less errors. As a bonus there is a system called deep thinking, which is a part of machine learning.
This allows the system to follow algorithms and operate as a human mind would. Therefore, AI
can be used in place of a surgical assistant by means of robot assistant surgeries. This allows the
second surgeon the ability to perform their own surgery, increasing profit for the facility.
Since I have been in the healthcare world for so long, I have seen stages of healthcare, everyone
is building ambulatory centers to avoid patients going into the hospitals and waiting in the
emergency rooms, The ambulatory centers can act as, primary care centers, urgent care pretty
much none threatening issues you can go to. These centers bring more money into the healthcare
centers. It employs more people and brings in more patients because most of their hours are 12
hours or until the last patient leaves. They can provide more services in a shorter amount of time
so it is less waiting which means more revenue for the healthcare centers.
While searching for healthcare trends to discuss in this post, I began to think about my hospital
and our current budgeting issues. Over the last two years, COVID-19 has drastically changed the
healthcare world, and medication cost and availability have been deeply affected. Drug shortages
exacerbated by COVID-19, rising medication costs, and decreased financial assistance negatively
affect hospital budgeting.
Hospital administration and unit managers are tasked with adjusting to shortages and subsequent
financial costs. Throughout the last two years, maintaining supplies in the hospital has been a
constant issue. While PPE supply availability has improved since 2020, other hospital necessities
such as medications remain an issue. According to the U.S. FDA (2020), drug shortages are due
to two main reasons: quality manufacturing issues and raw material shortages. Drug shortages are
not a new problem in healthcare. Injectable drugs were already on shortage lists prior to COVID-
19, and since the pandemic started, shortages have worsened (Burg, 2020). Critically ill patients,
higher censuses, and production interruptions are likely stressors to medication availability. Drug
shortages, such as analgesics and paralytics, significantly impact patient care and outcomes.
Since the pandemic started, necessary medication supplies have dwindled, and cost has increased.
Drug manufacturers have increased the prices of medications. According to the American
Hospital Association (n.d.), Dilaudid cost has risen by 107%, Mitomycin by 99%, and
Vasopressin by 97%. Medication costs increasing even a tiny amount can have drastic adverse
effects on operating margins, especially during a pandemic when budgets are thin.
Government and health plan assistance throughout the pandemic has helped, but recently aid has
started to decrease. The antiviral used to help treat COVID-19, Remdesivir, was covered through
government assistance, and hospitals are now required to buy the medication through their
finances (AHA, n.d.). Although COVID-19 cases are down compared to the omicron and delta
surges, hospitals must adjust finances to include the costs of medications previously covered by
emergency relief funds and health plans. Also, since the pandemic, pharmacies that previously
had 340B contracts with hospitals have denied decreased pricing (AHA, n.d.). 340B programs
allow providers to purchase medications at discounted prices to provide higher quality patient
care in low-income and rural communities. Hospitals like the one I work for greatly benefit from
the 340B contract pharmacies. Overall, COVID-19 has amplified issues within healthcare,
especially financial planning. Drug shortages, rising medication costs, and reduced financial
assistance continue to create an environment in healthcare that is not sustainable.
“Telemedicine is a service that is rapidly evolving to provide increased access to high-quality
healthcare that is efficient and cost-effective.” (Kichloo et al, 2020, p. 2). Telehealth provides
many advantages including: its cost-effectiveness, convenience, ability to extend access to
specialty services, and its potential to help mitigate the looming physician shortage (Kichloo et al,
2020). Virtual care reduces patient travel and associated costs (Snoswell et al, 2020). Individuals
in rural areas can access specialized services, without the concern of travel expenses. This allows
for efficient delivery of health care services, by all health care professionals. Furthermore, this
contributes to the diagnosis, treatment, and prevention of disease and injuries (Kruse, 2017, p. 1).
Telehealth can enhance collaboration between the patient and various healthcare providers in
effort to provide optimal care. Virtual care offers many advantages for financial planning. d
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