Friday, the House of Delegates of the American Medical Association began their Annual Meeting in Chicago where payment reforms will headline the meeting and resolutions to strengthen the profession voted on by the 1000 attendees. This meeting falls on the heals of welcome attention from Congress which seems sympathetic to physician pay issues as documented most recently in the Senate Finance Committee’s White Paper on Physician payment reforms.
Medical students who pay $17/year to be members of AMA, will be among attendees.
Perhaps less noticed, Friday also marks an important date in medical education: letters were sent to U.S. medical schools by US News and World Report seeking verification of data they submitted in fall 2023- early 2024 pursuant to the Best Medical School 2024-2025 Annual Rankings soon to be released.
In response to criticism about its methodology, USNWR up-weighted its measures for research activity, excluded reputational scores from surveys of Deans and others and tweaked other measures around faculty resources and student selectivity for its 2024-2025 rankings which are sure to influence the 53 thousand who’ll apply and 22 thousand who matriculate to the nation’s 195 Schools of Medicine (158 Allopathic, 37 Osteopathic).
The incoming class will be smart and diverse: the pandemic did not dampen enthusiasm for the profession nor has the academic preparedness of matriculants slipped:
| 2018-2019 | 2019-2020 | 2020-2021 | 2021-2022 | 2022-2023 | 2023-2024 | |
| Applicants | 52,777 | 53,369 | 53,030 | 62,443 | 55,189 | 52,577 |
| Matriculants | 21,622 | 21,869 | 22,239 | 22,266 | 22,710 | 22,981 |
| MCAT-A | 505.6 | 506.1 | 506.4 | 505.9 | 506.5 | 505.3 |
| MCAT-M | 511.2 | 511.5 | 511.5 | 511.9 | 511.9 | 511.7 |
| GPA-App | 3.57 | 3.58 | 3.60 | 3.59 | 3.62 | 3.64 |
| GPA-M | 3.72 | 3.73 | 3.73 | 3.74 | 3.75 | 3.77 |
2023 FACTS: Applicants and Matriculants Data | AAMC
They’ll spend their first 2 years studying science in a classroom setting, another 2 years in clinical rotations and then, after passing the 3-part United States Medical Licensing Examination (USMLE), begin residencies and fellowships having amassed $254,000 of debt to get there. Though curricula vary from school to school, attention to nutrition, addiction, artificial intelligence in traditional and problem-based learning models is notable. And while most of their undergraduate peers are starting their careers and families, matriculants will enter young adulthood as YUMPIES—young, upwardly mobile professionals in economic distress. The 7-9 years of med school, residency and fellowship preparation produces professionals who are clinical competent but financially distressed. A bunker mentality about the profession of medicine—magnified by the AMA and other voices of medicine– is a natural by-product of this process: it seeds discontent among clinicians that’s manifest long-term in their careers. And it’s increasingly problematic to their employers: only one in five will practice in an independent, physician-owned practice sans employment by a hospital, private equity company, health insurer or retail health corporation.
Gaps in medical school training play a key role in the physician discontent tsunami. While medical school’ primary emphasis is appropriately on clinical acumen in diagnostics, prognostics and therapeutics, preparedness for operating a medical practice and navigating the complexities in the U.S. system of health get nominal attention. As students become physicians, the realities of practicing medicine are not top-of-mind. Students envision a road few are smart/equipped well-enough to travel with peer recognition, patient trust, public esteem and attractive income guaranteed. Instead, the tricks of the trade are learned in residencies where work-life balance is aspirational and career-focus is more important than anything else. Adapting to realities of practicing medicine in a complicated, fragmented and expensive system of health is not taught in medical school, so it is left to young doctors to fend for themselves and doctors in medical school to experience anecdotally.
Modernizing medical school training to better prepare physicians for practice in the 21st century is needed in medical schools. As Deans are reducing lectures, implementing collaborative instructional methods, incorporating technology-enabled clinical decision support tools, expanding team-based learning experiences and expanding student exposure to non-hospital-based practice environments, resources should also be invested to prepare students to operate effectively as leaders and managers.
The major sources of physician discontent are administrative hassles and unwelcome clinical oversight that create dissonance. They conflict with a false sense of autonomy that the majority of physicians imagined when choosing medicine. Cuts to reimbursement, participation in alternative payment models and medical inflation are manifestations of a system in which ‘suits’ are intruders who make rules, exact handsome salaries, generate corporate profits and distance physicians from patient care purposely. Physicians vis a vis the advocacy platforms of their professional societies like AMA and others have positioned the profession as victims of exploitation defending their M.D. and D.O. licenses from scope of practice expansion by others while cautioning against advances in clinical innovation, data, artificial intelligence, price transparency, consumer self-care et al. unless controlled by M-Deity.
Despite physician claims, these challenges are not unique to medicine. The collective impact of corporate consolidation, price transparency, shifting demand, emergent technology, consumer expectations and heightened regulation has had profound accountancies, law firms, architects and other professions. And government data show weekly earnings of physicians have actually outperformed other professions since the pandemic.
At the same time, trust in the profession, while still high, has slipped: physicians rank behind nurses in “overall trust and confidence” (79% vs. 62%) and well-behind nurses (78%), veterinarians (65%), engineers (60%), and dentists (59%) for ‘the overall honesty and ethical standards of people in the field.”
Physician discontent will not be solved nor physician work-force shortages mitigated unless and until the U.S. system takes a fresh look at how we educate and support our physicians. Medical school is the place to start. So, as AMA delegates vote on policies to protect the profession, and as med schools consider their response to forthcoming USNWR 24-25 rankings this week, fresh ideas about medical education that prepares matriculants for effectiveness and influence should be advanced. Everything should be on the table—funding, curriculum, competency evaluation, licensing and more.
Paul
PS: Much of the content for this report is sourced from citations in today’s Quotables and Physician Sections. Thanks for taking time to think about medical schools and the need for fresh thinking about its potential to strengthen the resilience of the profession. In my career, its leaders have been among the most revered in the profession because they devote themselves tirelessly to meaningful, worthwhile work.
Sections in this Report
- Quotables
- Courts
- Economy
- Hospitals
- Insurers
- Physicians
- Polling
- Population Health
Resources
2023-2024 Best Medical Schools (Research) (usnews.com)
2023-2024 Best Medical Schools (usnews.com)
Medical professionalism and physician wellbeing – The Lancet
Honesty/Ethics in Professions | Gallup Historical Trends
ACP: Physicians, not AI, must guide patient care (medicaleconomics.com)
Doctor, resident unions see growth at Kaiser, Allina, others | Modern Healthcare
2023 FACTS: Applicants and Matriculants Data | AAMC
Quotable
Re: the choice of Medicine as a career: “Medical school might be worth it for you if you have a passion for medicine and a grasp of the sacrifices and challenges that accompany being a physician. Medical school – and the medical profession – requires commitment. You shouldn’t consider this career simply on a parent’s or friend’s recommendation or because you see it as a way to earn a high salary.
Your reason for applying shouldn’t solely be to help people either; there are several career paths that allow you to serve others, including other opportunities in the health care field. Before you apply for medical school, be sure you’re dedicated to the process and to the work you’ll do as a doctor. Aside from a time investment, higher education is also a financial investment and will likely cause you to rack up student loan debt.
How Much Does Medical School Cost?
Full-time tuition at some of the medical schools that top the U.S. News rankings can be upwards of $70,000 per year. The price tag for medical school varies according to multiple factors, such as whether the school is private or public and whether you’d be paying in-state or out-of-state tuition. Scholarships and other financial aid can also help alleviate some of these expenses. Students should also plan for other costs when applying to medical school, including application fees, travel expenses for in-person interviews or campus visits, and acceptance deposits.”
AMA website www.ama.org
Re: physician wellbeing: “Integrity, compassion, altruism, continuous improvement, excellence, working in partnership—these are the values of medical professionalism, according to a working group formed by the Royal College of Physicians in 2005. More recently, ideas about professionalism have focused on the attributes required for a modern doctor to fulfil their roles as healer, innovator, researcher, and patient partner. But much of the thinking around medical professionalism remains rooted in an idealized, traditional, and paternalistic foundation of self-sacrifice and service to humanity, in which the perceived good doctor prioritizes the care of their patient over all else. The mental and physical strains caused by living up to this standard can aggravate many of the factors that influence physician wellbeing, including balancing home and work life. When other aspects of professionalism, such as autonomy, have been eroded, are we left with a shell of values that have become harmful to doctors and their wellbeing?
Medical professionalism and physician wellbeing – The Lancet
Re: David Johnson on site neutral payments, innovation: “In a remarkable and surprising show of bi-partisanship, the U.S. House of Representatives passed the “Lower Costs, More Transparency Act” December 11, 2023, by an overwhelming 320-71 vote. Avoiding hyperbole, the Act lives up to its name. It seeks to equalize Medicare payment for the same drugs administered in the same way whether in hospitals or in doctors’ offices. Seems reasonable but the American Hospital Association (AHA) begs to differ…Saving money by eliminating irrational pricing variation is elemental to good policy creation. That’s why the Lower Costs, More Transparency Act is receiving such widespread support. Of course, creating savings in one pocket creates a hole in another. Aggrieved hospitals depend upon irrational payment policies to sustain their stagnant business practices. They’re howling at Congress to protect the status quo……in healthcare, disruptive innovations haven’t led to lower prices like they have in other industries (e.g., retail shopping, hospitality, banking, transportation). Healthcare’s strategic stagnation occurs because health systems insist on receiving higher hospital-based payments for procedures delivered in lower-cost settings, including ASCs and physicians’ offices.
Fighting against innovation, value creation and transparency is a soul-destroying endeavor. The industry’s increasingly shrill warnings are falling on deaf ears. The world, as illustrated by House passage of the Lower Costs, More Transparency Act, is moving forward despite industry protests.
Although it’s daunting to contemplate, the right response for providers is to embrace site-neutral payment and use innovation to spur waves of Growth Waves that deliver better outcomes at lower costs with great customer service. Ride the wave to achieve better outcomes and happier customers. This is a soul-enriching endeavor.
Do health systems really have another choice?”
Re: hospital profitability: “Forty percent of hospitals in the United States are losing money. Organizations who have weathered the challenges of the last few years have adopted a wide range of proactive and growth-related strategies, including improving discharge transitions and building a larger outpatient footprint.”
Erik Swanson, Senior Vice President of Data and Analytics, Kaufman Hall
Re: concierge medicine: “As concierge medicine continues to expand in the U.S., we must weigh its commercial success against the ethical questions it poses. This model has undeniably met the specific needs of both patients and doctors, yet it threatens to establish a two-tiered system of care that could exacerbate the already large disparities in healthcare access and quality.
In a consumer-driven healthcare industry, individuals who can afford concierge services are entitled to a higher level of medical care. Nonetheless, physicians carry a unique ethical responsibility that transcends typical market dynamics; they are committed to delivering the highest standard of care to all patients impartially. Deviating from this commitment risks detrimental effects on society’s most vulnerable groups.
As we look toward the future, it’s crucial to consider the implications of healthcare consumerism. We must question how to nurture the growth of concierge medicine without compromising equitable access to quality healthcare. Achieving this requires a delicate balance of fostering innovation and personalized care while strictly adhering to the core principles of medical ethics and social responsibility. The advancement of healthcare models like concierge medicine should be a tool to enhance the overall quality and fairness of healthcare, not further diminish it.”
Concierge Medicine: The Good, the Bad, and the Ugly | MedPage Today
Re: evidence-based practice: “Society’s goals for medicine require integration of the clinical trials and health care delivery enterprises to ensure the efficient and rapid generation and dissemination of knowledge on what care works and how it should be organized and delivered. However, the 2 enterprises operate as a house divided, to the detriment of both and to the detriment of society. Repairing the division requires changes in ethical and regulatory oversight, study design, data infrastructure, and incentive structures for stakeholders in both enterprises. Although these problems are long-standing, the gulf between the care available and the care that could be available has never been wider. Solutions exist, but have not been prioritized. In a series of upcoming articles, we will explore each of these issues in more detail and outline specific recommendations.”
Re: AI and medical care: “Although data-driven care is a cornerstone of modern medicine, data-driven decision making can be complicated and fraught with error. Similarly, although AI tools can transform the practice of medicine in many beneficial ways, clinical decision support based on AI output without a basic understanding of AI technology can have serious, even fatal consequences for patients. Therefore, it is important to note that when being used for clinical decision making, the more appropriate term is “augmented” intelligence, meaning that it continues to incorporate human intelligence and is used as a tool to assist clinicians. Extensive research is necessary to assess the short- and long-term risks and effects of the clinical use of AI on quality of care, health disparities, patient safety, health care costs, administrative burden, and physician well-being and burnout. It is critical to increase overall awareness of the clinical risks and ethical implications of using AI, including any measures that can be taken to mitigate the risks. Comprehensive educational resources are necessary to help clinicians, both in practice and in training, navigate this rapidly evolving area of technology, including improving their collective understanding of where the technology may be integrated in systems they already use and recognizing its implications.”
Re: consumer spending and overall economy: “…Plenty of Americans remain supremely comfortable. Big spenders on large incomes—the sort more commonly found in Miami’s South Beach than in Little Havana—have little problem repaying credit-card debts. Despite the rise in interest rates, overall debt-servicing costs on homes remain low, since many mortgage-holders are on long-term fixes. All told, one-third of mortgage debt was refinanced in 2020-21, as borrowers took advantage of low rates, meaning that households are spending a smaller share of income on paying down debts than at any point in the 2010s. Those who own homes and stocks are also enjoying rising asset prices and associated rental and dividend incomes. The S&P 500 index of large American companies is up by 11% this year, for instance.
What matters for the overall economy is how many consumers end up struggling to make ends meet. Rising incomes, along with pandemic savings, were what really fueled America’s rip-roaring spending. With savings rates low and excess savings exhausted, continued spending will have to be fueled by still-higher incomes. Employment remains strong and initial jobless claims are steady. Although in April monthly nominal wage growth crept down, the figures also suggest that inflation may have resumed its descent, which would provide a boost to real incomes. Households’ balance-sheets have weakened, but with a bit of luck America might keep dodging a consumer crunch. “
Is America’s economy heading for a consumer crunch? (economist.com)
Re: AI antitrust investigation: “Federal regulators have reached a deal that allows them to proceed with antitrust investigations into the dominant roles that Microsoft, OpenAI and Nvidia play in the artificial intelligence industry, in the strongest sign of how regulatory scrutiny into the powerful technology has escalated.
The Justice Department and the Federal Trade Commission struck the deal over the past week, and it is expected to be completed in the coming days…
Under the arrangement, the Justice Department will take the lead in investigating whether the behavior of Nvidia, the biggest maker of A.I. chips, has violated antitrust laws, the people said. The F.T.C. will play the lead role in examining the conduct of OpenAI, which makes the ChatGPT chatbot, and Microsoft, which has invested $13 billion in OpenAI and made deals with other A.I. companies…
The agreement signals intensifying scrutiny by the Justice Department and the F.T.C. into A.I., a rapidly advancing technology that has the potential to upend jobs, information and people’s lives.”
Re: healthcare pricing: “Unfortunately, widespread pricing reform in health care is unlikely in the short or mid-term. Both price and competition regulation are often resisted by the health care industry worried about revenue loss and Americans wary of policy changes that could disrupt their care.
With the dominance of employer-based health insurance, employers and commercial insurers play a key role in the affordability of health care for most Americans younger than age 65. The changes to benefit structures detailed above could spread the costs of health care among populations more equitably, or help with the affordability of large medical bills, but are unlikely to substantially reduce health care costs. As the cost of medical care threatens the financial stability of low- and middle-income workers, employers can shift their benefit designs to ease the burden on their more financially vulnerable employees and, hopefully, improve equity and access to medical care.”
How Employers Can Help Reduce Employees’ High Health Care Cost Burdens | Health Affairs
Courts
Supreme Court cases pending decisions in June: Between now and the end of the month, the Supreme Court will announce its rulings in several cases that will profoundly impact U.S. health policies. The two most significant:
Abortion: Significance: provisions for medical abortion
- InIdaho v. United States, the Department of Justice (DOJ) argues that Idaho’s abortion ban, which prohibits abortion unless necessary “to save the life of the pregnant woman,” violates the federal Emergency Medical Treatment and Labor Act (EMTALA), which requires hospitals that receive federal funds to treat all patients experiencing medical emergencies.
- In FDA v. Alliance for Hippocratic Medicine (AHM), the plaintiffs (an anti-abortion health professional organization), argued that the FDA acted unlawfully when it first approved mifepristone in 2000, and more recently in increasing access to the drug (e.g., allowing it to be prescribed up to 10 weeks of pregnancy instead of 7 weeks in 2016, and allowing it to be dispensed at certified pharmacies in 2023). AHM further argues that the 1873 Comstock Act prohibits mailing matters “intended for producing abortion.” Yet, the DOJ has interpreted this ancient law as inapplicable to the lawful mailing of approved abortion medication.
Public health agency authority: Significance: the role and scope of agency oversight in matters of public health for the FDA, CDC, and others.
- In Loper Bright Enterprises v. Raimondo and Relentless, Inc. v. Department of Commerce, commercial fishing enterprises are challenging a federal regulation requiring fishing boat operators to pay third-parties to conduct federally-required compliance checks. They argue that the regulation is inconsistent with a fishery conservation statute. The lower courts upheld the regulation under the 40-year old precedent, Chevron v. Natural Resources Defense Council (1984), which allows agencies to reasonably interpret their statutory authority when issuing regulations. Yet, the fishing enterprises, which are backed by special interest groups, argue that Chevron is unconstitutional because it gives too much power to federal agencies instead of allowing the judiciary to resolve statutory ambiguities.
Home – Supreme Court of the United States
Economy
Pew: Household income disparity: The share of Americans who are in the middle class has shrunk from 61% in 1971 to 51% in 2023. In the same period, low-income households increased from 27% to 30%- and upper-income households increased from 11% to 19%.
“But the middle class has fallen behind on two key counts. The growth in income for the middle class since 1970 has not kept pace with the growth in income for the upper-income tier. And the share of total U.S. household income held by the middle class has plunged…Households in all income tiers had much higher incomes in 2022 than in 1970, after adjusting for inflation. But the gains for middle- and lower-income households were less than the gains for upper-income households. From 1970 to 2022:
| Low Income | Middle Income | Upper Income | |
| 1970 HH Income | $22,831 | $66,417 | $140,068 |
| 2022 “ | $35,318 | $106,092 | $256,920 |
| % Change | +55% | +60% | +78% |
| 1970 Share of Total | 10% | 62% | 29% |
| 2022 “ | 8% | 43% | 48% |
| % Change | -2% | -19% | +19% |
source
BLS May 2024 Jobs report: Total nonfarm payroll employment increased by 272,000 in May; the unemployment rate and number of unemployed changed little at 4.0% and 6.6 million respectively. Health care added 68,000 jobs in May, in line with the average monthly gain of 64,000 over the prior 12 months. In May, employment growth continued in ambulatory health care services (+43,000), hospitals (+15,000), and nursing and residential care facilities (+11,000).
Employment Situation Summary – 2024 M05 Results (bls.gov)
Related: “The unexpectedly strong hiring shows that employers remain undaunted, despite pressure from high interest rates and slowing consumer spending. But there were some mixed signals in the report, with results from a survey of households painting a weaker picture than a survey of businesses.”
Live Updates: U.S. Hiring Rises Strongly – The New York Times (nytimes.com)
Gen Z economic status: ‘Gen Z members (born between 1997 and 2012) have been hit harder by inflation than all other age groups, and the effects could cast a shadow over their financial health for years to come. Young adults, ages 12 to 27, are bearing the brunt of a historic spike in prices over the past few years that has financially strained most Americans. That’s because Gen Z’s incomes are lower because they’re just entering the workforce. And they’re big consumers of some of the chief inflation drivers, like housing and meals out…
Besides earning lower incomes than other age groups, young Americans buy a disproportionate share of products and services that have soared in price. For instance, they devote nearly 20% of their income to rent, averaged across the entire age group, compared to 7% for the average American, Moody’s data shows.
Few Gen Z members own their homes, which means those who aren’t still living with their parents or other relatives are probably renting. Rent has jumped 5.4% in the past year and 21% since early 2021, the CPI shows. And housing broadly has accounted for 36% of the rise in consumer prices in recent months.
Young people also spend 5.5% of their income on dining out, compared with 4.5% for the average person; 5.3% on gasoline versus an average of 3.2%; and 2.6% on auto insurance versus an average of 2.3%, the Moody’s analysis shows.
The additional costs that Gen Zers face have led them to amass more credit card debt than millennials at the same age, according to a TransUnion study last month. Gen Zers ages 22 to 24 had an average credit card balance of $2,834 late last year, compared with an inflation-adjusted $2,248 for millennials at the same age in late 2013.
And 1.6% of Gen Z card holders were 60 or more days delinquent on their payments in late 2023, vs. 1% of Millennials a decade ago…”
Inflation on rent, gas, insurance hits Gen Z harder than other groups (tennessean.com)
Hospitals
AHA Response to CMS 2025 Inpatient Proposed Payment: “We support several of the inpatient PPS proposed rule provisions, including certain policies supporting low-volume and Medicare-dependent hospitals…
At the same time, we continue to have strong concerns about the proposed payment updates. In particular, we are deeply concerned about the inadequacy of the proposed net payment update of 2.6% given the unrelenting financial challenges faced by hospitals and health systems. As such, we strongly urge CMS to utilize its authority to make a one-time retrospective adjustment to account for what the agency missed in the FY 2022 market basket forecast. We also are concerned about the agency’s lack of transparency in the underlying calculations for disproportionate share hospital (DSH) payments and disagree with the agency’s estimates of the number of uninsured for FY 2025. .
Finally, we have concerns about several of the agency’s quality-related proposals. We urge CMS not to adopt its two proposed new structural measures and not to increase the number of required electronic clinical quality measures. CMS’ proposal to use conditions of participation (CoPs) to compel hospitals to share data with the federal government is both needlessly heavy-handed and inconsistent with the intent of CoPs. Rather than jeopardizing hospitals’ Medicare participation status, the AHA urges CMS to take a more collaborative approach and to invest in the infrastructure needed to make the voluntary sharing of important data on infectious diseases less burdensome and more meaningful…”
AHA Comments on CMS’ Inpatient Payment Proposal for FY 2025 | AHA
Wyman analysis: Performance of hospital-acquired medical groups: “Health systems have for years been growing their employed medical groups. As of 2022, more than 50% of physicians were employed by a hospital or health system, up from 25% in 2012, according to the Physicians Advocacy Institute. The drive to employ physicians has been spurred by a desire to deliver integrated care throughout the continuum, enhance care coordination, and move upstream to help improve population health, among other things.
While this approach is generally intuitive to health system executives, the reality is most system-based medical groups are not profitable on a standalone basis — and the losses have been growing year after year. MGMA and others consistently cite median losses of $300,000 per physician (-37% margin) on a professional services revenue basis…
MGMA data suggests there’s a 24% decline in production per physician FTE for an employed group — roughly 8,000 work relative value units (wRVU) versus an independent one — about 10,500 wRVU.
On average, system-employed providers realize net revenue per wRVU of $87 compared to independent physicians with $150/wRVU, according to our review of MGMA data.
Over the past 20 years, some research suggests that physician fee schedules have effectively declined more than 20% when factoring for inflation, while hospital reimbursement has surged 70%. Anecdotally, health system reimbursements have matched these trends, offsetting increases on inpatient and procedural care with reduced growth in the professional fee schedule, all leading to further compression of medical group financials.”
Positioning System-based Medical Groups For Success (oliverwyman.com)
Study: Hospital readmission score methodology: Researchers analyzed the impact of incorporating MA data into the CMS claims-based FFS Hospital-Wide All-Cause Unplanned Readmission (HWR) measure. Findings:
Mean hospital risk-standardized readmission rates were similar for the FFS and MA cohort and FFS-only cohorts (15.5% vs 15.3%); this trend was consistent across the 5 specialty subgroups. After adding MA admissions to the FFS-only HWR measure, 1489 hospitals (33.1%) had their performance quintile ranking changed. As their proportion of MA admissions increased, more hospitals experienced a change in their performance quintile ranking (147 hospitals [16.3%] in the lowest quintile of percentage MA admissions; 408 [45.3%] in the highest). The combined cohort added 63 hospitals eligible for public reporting and more than 4 million admissions to the measure. After MA admissions were included, 1 in 3 hospitals had their performance quintile changed, with the greatest shifts among hospitals with a high percentage of MA admissions.
Investor-owned M&A activity: “The first quarter of 2024 marked the strongest merger and acquisition activity among hospitals and health systems since 2020. For-profit systems, in particular, are making a lot of moves in the hospital market and Dallas-based Steward Health Care recently received the green light to auction off its 31 hospitals in June and July.”
Becker’s Hospital Review | Healthcare News & Analysis (beckershospitalreview.com)
Fitch: Hospital expense growth:” Fitch data show that NFP hospital expense spending has risen yoy in the high single digit range over the last several years, far above suggested benchmarks, with median expense growth outpacing median revenue growth according to fiscal 2023 audited data. NFP hospitals have limited ability to cut services, given operating constraints such as serving all in need of medical care, or to pass increased expense costs directly onto consumers as reimbursement rates are contracted with public and private insurance providers for extended periods of time:
| 2020-2021 | 2021-2022 | 2022-2023 | |
| % Revenue growth | 10.27 | 5.71 | 7.02 |
| % Expense growth | 7.97 | 9.33 | 7.57 |
“Connecticut, Maryland, Massachusetts, Nevada, New Jersey, Oregon, Rhode Island, and Washington have caps on cost increases, which Fitch stated have limited rates and levels of reimbursement. More states are following suit, with Delaware having approved a bill that would cap price increases at 2% over the next two years, while California approved a price growth target of 3% to be phased in over the next five years.”
Note: Delaware capped hospital price increases at 2% per year for the next 2 years and California capped increases at 3% phased in over the next 5 years.
State Health Care Cost Caps Likely Negative for NFP Hospitals (fitchratings.com)
Update: Deadlines set for Steward Health sale: Optum subsidiary Collaborative Care Holdings filed a notice March 26 with Massachusetts’ Health Policy Commission to acquire the 1700- physician group. Subsequently, Steward filed for Chapter 11 bankruptcy May 6 to keep operations running at its existing locations and on May 15 executed an agreement between Steward and Collaborative Care.
In a May 28 bankruptcy filing, the Justice Department rejected Steward’s suggested auction timeline for the sale of 1,700-physician Stewardship Health. Brian Boynton, principal deputy attorney general for the justice department, said the financial deal between Steward and its landlord Medical Properties Trust interferes with the antitrust review of the physician group deal, In a June 3 hearing, a bankruptcy judge authorized sale dates for 31 Steward hospitals with a bid deadline of June 24 and first sale hearing July 11
Judge approves June 24 bid deadline for Steward hospitals – masslive.com
Insurers
Study: Value of supplemental benefits in MA plans: In 2018, the US Congress gave Medicare Advantage (MA) flexibility to address members’ social needs with a set of Special Supplemental Benefits for the Chronically Ill (SSBCIs). In response, the Centers for Medicare & Medicaid Services expanded the definition of primarily health-related benefits (PHRBs) to include nonmedical services in 2019. Uptake has been modest; MA plans cited a lack of evidence as a limiting factor. Researchers evaluated the association between adopting the expanded supplemental benefits designed to address MA enrollees’ nonmedical and social needs and enrollees’ plan ratings. Findings:
“Adopting both a new PHRB and SSBCI benefit in 2021 was associated with an increase of 0.22 out of 10 points in mean enrollee plan ratings. There was no association between adoption of only a PHRB or SSBCI and plan rating. Medicare Advantage plans that adopted both benefits saw modest increases in mean enrollee plan ratings. This evidence suggests that more investments in supplemental benefits were associated with improved plan experiences, which could contribute to improved plan quality ratings.”
Physicians
Physician Income: “Physicians are earning more year over year than ever — but this does not necessarily mean they are happier about their pay than ever before.
The 10 specialties with the most salary growth in 2024 saw year-over-year pay increases between 7.2% for psychiatrists and 12.4% for hematologists, according to Doximity’s Physician Compensation Report.
Despite this growth, 35% of physicians said they were not satisfied with their current compensation, while 62% said their current pay did not reflect their level of expertise and the amount of effort required in their roles.
According to May 12 data from the Bureau of Labor Statistics, the Consumer Price Index, also known as inflation, increased by 3.4% in the last year. This means the 13 specialties that saw year-over-year pay increases of 3.4% or less — such as gastroenterologists, urologists and rheumatologists, all with pay increases of 2%, according to Medscape’s “Physician Compensation Report” — essentially received pay cuts compared to their salaries last year.
Further, physicians are receiving smaller reimbursements from CMS compared to last year. The beginning of 2024 marked CMS’ 3.37% cut in Medicare reimbursements, only compounding the decreases faced by some providers.”
Why physician pay bumps aren’t enough | Physician Leadership (beckersphysicianleadership.com)
Medical education dual degree programs: “According to the Association of American Medical Colleges, roughly 10% of medical school graduates pursued a dual degree in 2023. Master’s degree tracks usually add about one year to a medical students’ time in medical school. An MD/PhD can take upwards of eight years for medical students to advance to residency.
There are also avenues though which medical students can earn a degree in less than four years, though they are relatively uncommon. Programs such as the Accelerated Competency-based Education in Primary Care (ACE-PC)—a partnership between the University of California, Davis School of Medicine and Kaiser Permanente Northern California—offer a streamlined path to graduation. The program combines medical school and residency. It allows students to earn their MD degree in three years.”
Pre-med frequently asked questions | American Medical Association (ama-assn.org)
“According to the most recent data U.S. News collected from 122 medical schools ranked for both research and primary care, the average debt among graduates who borrowed for school was about $184,000. This excludes undergraduate and other debt.
But graduates of some medical schools had much higher debt burdens. At the 15 medical schools where graduates left with the most debt, the average indebtedness was about $254,000, according to U.S. News data…
Nova Southeastern University Patel College of Osteopathic Medicine in Florida had the highest average debt among these schools, about $322,000, while Rutgers New Jersey Medical School—Newark in New Jersey had the lowest, about $231,000. Among all medical schools ranked for both primary care and research that reported average graduate indebtedness, New York University had the lowest: about $85,000.
While medical school graduates often leave school with high rates of debt, they can expect to eventually earn six-figure salaries. Physicians and surgeons, for instance, made at least $208,000 a year on average in 2021, according to data from the U.S. Bureau of Labor Statistics.
More than half of the medical schools with the highest graduate debt are located in states on the East Coast, including Florida, Massachusetts, New Jersey, New York, Pennsylvania, Virginia and West Virginia. The remaining six are in California, Michigan, Ohio and Tennessee.”
Employed Physician compensation: “Employed physician pay has been trending upward every year for the last five years, according to Medscape’s annual “Physician Compensation” reports. Between 2019 and 2023, employed physician pay has jumped $64,000, or 22%. “
www. Medscape.com
Polling
KFF Poll re: Medicaid: Per KFF Health Tracking Poll (April 23-May 1, 2024): “While an overwhelming majority of Medicaid enrollees (86%) prefer the program to “largely continue as it is today,” somewhat fewer adults (71%) overall stay the same.” Related finding: 78% enrollees in a non-expansion state say their state should expand Medicaid to cover more low-income uninsured people.
Population Health
NCi: Cancer mortality rate decrease: “From 2000 to 2019, the cancer incidence rate decreased by 5.4%, while the mortality rate dropped by 26.7%.
In 2023, breast, prostate, and lung cancers comprised more of the 1.96 million new cases nationwide than other cancer types. Lung, colon, and pancreatic cancers were responsible for the biggest shares of the more than 600,000 cancer deaths. (New pancreatic cancer cases are included in the “other” category.)
While cases and deaths have increased as the population has grown, the data shows some good news: cancer deaths rose by 8.4% from 2000 to 2019, less than the 36.5% rise in new cases over the same period. This indicates that improved screenings and treatments can help patients survive.
Non-Hispanic Black Americans had the highest cancer mortality rate, at 164.3 per 100,000 people. Native Americans/Alaska Natives had a similar rate: 162.8 per 100,000. Non-Hispanic Asian/Pacific Islander Americans had the lowest mortality rate at 92.4 cases per 100,000.
Early cancer screenings can help lower mortality rates over time. That’s the case for prostate cancer, the mortality rate for which dropped from 30.4 deaths per 100,000 people in 2000 to 18.4 in 2019.”
www.cancer.gov/about-cancer/understanding/statistics
FDA: MDMA assisted therapy for PTSD lacks adequate evidence: “A U.S. Food and Drug Administration advisory committee overwhelmingly voted Tuesday that evidence is lacking that MDMA-assisted therapy is effective for treating post-traumatic stress disorder, and that the benefits don’t outweigh the risks to patients, dealing a potential blow to what could be the first psychedelic treatment the agency approves.
The advisory committee is made up of independent mental health and medical experts, and its vote is not binding. Still, its recommendation could hold great weight as the FDA decides for the first time whether the mind-altering compound — better known by its street name, ecstasy, and long categorized among the riskiest of controlled substances — can be legally used as a medical treatment in the United States.”
Panel recommends FDA reject MDMA as treatment for PTSD (msn.com)
