The strategy of replacing physicians with NPs and PAs leads to worse outcomes, higher utilization costs
All across the U.S. health care delivery landscape, a sense of desperation is in the air. The financial troubles that had beset many provider organizations for years were only exacerbated by Covid-19. As these organizations try to recoup huge financial losses, they must also contend with a host of other operational challenges that also began long ago. The problem is that some of the cost-cutting measures being deployed come at the expense of patients.
Many health systems, including nationally renowned large hospital systems, are losing billions. For rural hospitals, which run on much thinner margins, the situation is even more bleak. A recent Center for Healthcare Quality and Payment Reform (CHQPR) study found that “more than 600 rural hospitals—nearly 30% of all rural hospitals in the country—are at risk of closing in the near future.”
That’s on top of the more than 150 rural hospitals that have closed their doors between 2005 and 2019. Covid-19 certainly played a role in this, but it only brought the industry to such a crisis stage because it was already teetering at the edge of a cliff. Between inflation and staff shortages, more difficult days lie ahead for the industry.
On the staffing front, doctors and other clinical workers are in short supply. As health care systems continue to cope with Covid-induced medical staff burnout, they also face an acute shortage of nurses and doctors, many of whom are fed up with the current system because they can no longer excel in their jobs and do not have the level of public support they once received.
Under these circumstances, the health care workers that remain are becoming more vocal: nurses are going on strike and doctors are unionizing in the name of better working conditions, increased pay and benefits. These challenges come on top of the daily reminders that the system’s cracks are widening.
The situation in emergency departments (EDs) is an example of these compounding problems. Unable to hire or afford physicians and other medical professionals to keep their EDs open, many hospitals have turned to outsourcing them to medical staffing firms. Close to 70% of emergency departments in the U.S. use outsourcing in some fashion. Many of these staffing firms, which are often owned by private equity, promise to staff the ED at a lower cost than the hospital itself could achieve. Behind the promise is a simple strategy: use fewer physicians, and substitute nurse practitioners (NPs) and physician assistants (PAs) instead.
Comforted by the bromide that “everybody is doing it, so it must make sense,” medical staffing firms get a credible hearing when they explain how they’re going to staff the ED for less than the facility used to spend. It’s not surprising then that the numbers of PAs and NPs in emergency department settings have been steadily increasingalong with demand. However, research suggests an unfortunate side effect of this trend—a higher frequency of misdiagnosis and higher utilization costs.
Because they have less diagnostic experience than physicians, these clinicians are more likely to make mistakes, especially when it comes to more complex or less obvious cases. Take, for example, this recent example from a Tennessee ED run by a private medical staffing company. The inexperience of the mid-level medical personnel staffing it was nearly fatal for the patient’s unborn child and drove up patient costs in the process.
Contributing to such situations is the fact that many patients who enter emergency departments don’t have a primary care doctor and don’t distinguish between one “white coat” and another. Nor do they feel they have the standing to ask questions about the level and cost of the care they are receiving. And if they don’t have a caregiver who can advocate on their behalf, they are left at the mercy of ED staff judgment.
As for saving money, research has shown that, when less experienced health professionals are making the diagnosis, they rely more heavily on tests, which drives utilization costs up. Of course, for health care executives schooled in 30 years of fee-for-service (FFS) medicine that’s just fine, because more utilization translates to more revenue. Which brings us to the role of FFS in sustaining such bad ideas.
The FFS model is broken, and taking shortcuts in staffing in a system that has never worked only magnifies its weaknesses. As Rita Numerof, Ph.D. and I explain in our book, Bringing Value to Healthcare, under FFS hospitals get paid to diagnose and treat illness, making more money for doing more things to each patient. A byproduct of this “test more, treat more” mentality is overutilization of diagnostic testing and the costs and potential harms that come with it. This is becoming even more prevalent as PAs and NPs are forced to play more of a “doctor” role.
The FFS approach has hampered health care delivery by focusing on revenue generation rather than optimal patient outcomes. It’s simply delusional for providers to pretend that lowering overhead by substituting mid-level medical personnel for physicians, whether through outsourcing or done in-house, is responsible or ethical.
While there is no one right path for every health care delivery organization, a lot of the abuses we are witnessing would be mitigated by adopting a patient-centric, value-based care delivery approach. Such an approach, focused on the long-term health of the patient, could also stem the tide of clinicians who are leaving an industry that looks fundamentally different from the one they entered.
Health care organizations’ experiences during and after the pandemic display the failings of the FFS system in big, bold letters. The sheer number of Covid-related deaths and complications—especially among those with pre-existing conditions—coupled with the financial hemorrhaging that occurred from the shutdown of lucrative elective procedures in the pandemic’s early days, should have shaken health care organizations to their core. Instead, it seems that many providers still haven’t learned some painful lessons.
Numerof & Associates’ 2022 Population Health Report found that the threat of financial loss continues to be the main reason that health care executives fear pivoting to a population health model. This is despite the fact that such a model offers the promise of returning the industry to its original mission–delivering better, and more coordinated, care at lower cost while improving patient outcomes.
As the health care delivery system continues on this downward path, providers cannot afford to keep practicing bad fiscal medicine any longer.
Michael N. Abrams, MA is managing partner of the health care consultancy Numerof & Associates, based in St. Louis, Missouri.