The State of Healthcare: Cybersecurity Risks, Workforce Shortages, and Rural Hospital Closures
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We hope we can find a way to partner with you! Now, on to this week’s news.
Change Healthcare still in the hot seat
According to news reports, after a devastating cybersecurity attack, Change Healthcare will be back online and able to process all insurance claims by the end of this week. But that news does not mean federal regulators are going away. Not at all. In fact, Politico reports that members of the U.S. House and Senate are expected to examine how and why the outage occurred and who could be responsible.
As readers are aware, Change Healthcare was acquired by UnitedHealth Group (UHG) in 2022. Senate Finance Committee Chair Ron Wyden (D-Ore.) connected the recent cyber attack to the size of UHG’s empire. At a hearing last week, he said, “As these companies have become so large, it is creating a systemic cybersecurity risk.
Glad you said so, senator, because we have some reading for you …
Our BIG Thoughts: We are glad members of Congress and regulators are paying attention to how UHG is handling this crisis, but, as our founder Dr. Adam Brown argues in a new column at MedPage Today, they need to widen the scope of their oversight. UHG is just too big … and it is clearly failing consumers and providers alike.
Brown also discussed this issue with MedCity News last week. “I do think the DOJ is starting to wake up and see how vertical integration or vertical consolidation is affecting the healthcare industry. … When you have an insurer buying physician practices or hospitals, they’re paying themselves for the care that is being provided,” Brown said. “That creates a challenge for anyone who’s not underneath that umbrella. But it also creates a challenge for those stakeholders underneath that umbrella where they have inability to compete, negotiate for wages, benefits, etc.” Read more here.
Match day data still shows serious gaps
As AXIOS reported this week, data from Match Day 2024 shows medical school graduates are continuing to choose higher-paying specialties like orthopedic surgery and ophthalmology. More graduates entered emergency medicine this year, reversing a COVID-induced slide, but the rate of filled primary care residencies fell 1.4 percentage points in 2024 and only 92 percent of pediatric residencies were filled this year, compared with 97.1 percent in 2023.
According to a recent story in LexisNexis, as of Feb. 1, there were more than 100 pieces of legislation pending in 25 states related to increasing the healthcare workforce numbers. These measures include:
An Arizona bill that would create a state healthcare workforce advisory council and healthcare workforce investment fund to address the shortage;
A New York bill that would create the “Take a Look” medical and dental workforce employment “tour program” to market health care workforce career opportunities throughout the state;
An Oklahoma bill that would create an income tax credit for people who conduct preceptorship rotations; and
A Georgia bill that would expand the state’s “service cancelable loan program” for medical providers in underserved areas to include dental students.
Our BIG Thoughts: The country is still facing a physician shortage. These state-based policy ideas are all worth considering, but reform must start within the industry itself. How can medical schools attract a more diverse range of students to fill gaps that exist? Brown address this question in a post on Match Day 2023. Read it here.
How are hospitals REALLY doing?
Late last month, Kaufman Hall reported “hospital financials proved strong in January compared to previous years.” Specifically, the median Kaufman Hall Calendar Year-To-Date Operating Margin Index reflecting actual margins for the month of January wasat 5.1 percent.
That rosy picture is a little deceiving. Indeed, just a week later Kaiser Health News noted a report from Chartis found half of rural hospitals lost money in the past year, up from 43 percent the previous year. In the United States, 418 rural hospitals are now “vulnerable to closure.”
According to Becker’s Hospital Review, five hospitals have closed already in the first quarter of 2024. They are:
Jellico, Tenn. Regional Hospital, which closed March 9;
Wausau, Wis.-based Aspirus Health, which shut down its Aspirus Ontonagon, Mich. hospital so it can turn it into a rural health clinic;
Springfield, Ill.-based Hospital Sisters Health System, which two hospitals, Chippewa Falls, Wis.-based St. Joseph’s Hospital and Eau Claire, Wis.-based Sacred Heart Hospital; and
Kettering (Ohio) Health closed its emergency department at Kettering Health Piqua, Ohio.
Our BIG Thoughts: While payors profit, hospitals are still struggling. ABiG Health can help. Our experts have the knowledge to drive meaningful impact, sustained growth, and scale. Learn about them.
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