Report shows physicians are operating in a difficult financial and mental environment
Physician burnout was a problem before COVID, and the pandemic only made it worse. From surges to battles over masking, physicians are facing a difficult mental environment post pandemic, and the financial situation isn’t much better, according to a report from J.P. Morgan on physician payment trends.
According to the report, 47% of physicians reported they are burned out, while 74% of health care executives felt burned out within the past six months.
Many health care organizations are operating with negative margins and need external funding to stay in business. The report states that 36% of providers operated at a loss due to surges from COVID outbreaks, 41% of providers relied on external funding to remain open, and 53% of hospitals were projected to have negative margins through 2022.
A big financial problem for all providers is the rising cost of labor. Expenses related to health care workers have increased significantly, and these expenses are projected to continue to increase in the years to come. Health care organizations often struggle with how to attract, train, and retrain staff for vital positions, both clinical and administrative. To fill these gaps, organizations are more likely to incentivize staff with monetary rewards to help close staffing gaps, while some hire more staff than necessary to combat high turnover rates, according to the report.
All of these trends are only adding to the financial burden that providers are facing. The report found that labor expenses per patient are up more than one-third from pre-pandemic levels, with 20% of providers hiring more staff than needed for vital roles that have a high turnover rate. In addition, 15% of providers increased overtime rates to help incentivize staff to work uncovered shifts, and 31% of providers spent more than budgeted or typical on training and hiring new staff.
Labor expenses are projected to increase by $86 billion, while non-labor expenses are projected to increase by $49 billion.