December 19, 2022

WSMA Economic Impact Survey of Physician Practices

Over the last several years, the WSMA and Washington State Medical Group Management Association have periodically conducted surveys to better understand the economic challenges facing physicians, their practices, and patients resulting from COVID-19. Feedback has been vital to our advocacy at the state and federal levels as we secured regulatory and financial relief for medical practices.

With the recission of COVID-19 proclamations and regulatory waivers and the 2023 legislative session on the horizon, the WSMA and the WSMGMA conducted a sixth survey to better understand how these issues have affected physicians and patients to inform our advocacy.

Results from this latest round of surveying clearly demonstrate that inflation and workforce shortages, as well as the ongoing COVID-19 pandemic, are still adversely impacting outpatient physician practices, and hindering patient access to care across Washington. Respondents also note that administrative tasks, such as prior authorization remain burdensome to their practices and further strain their limited staffing resources.

If actions are not taken to shore up the medical practice community, access to outpatient care in our state will be severely diminished over the next year. Patients will no longer be able to get care, at the right time, at the right place, creating even more pressure on our already overwhelmed hospitals.

During the 2023 state legislative session, the WSMA will ask the Legislature to raise Medicaid rates to Medicare levels, as physician groups and practices overwhelmingly believe that doing so will help stabilize finances while maintaining access for current Medicaid panels and even increasing to include more patients. In addition, the WSMA will help introduce legislation to rein in insurance carrier prior authorization practices, which would also relieve staffing challenges currently felt by most of the medical practice community.

Download the November 2022 practice economic survey results.

About the respondents

Eighty-two physician practices responded, representing more than a thousand physicians and health care professionals that provide care to millions of Washingtonians.

• 26% of survey respondents were solo practitioners.
• 44% were in practices of 2-10 physicians and
• 7% were in practices of 11-20 physicians.
• 12% of respondents represented practices of 21-50 physicians, and
• 11% represented practices with over 51 physicians.

These represent smaller outpatient practices that are not affiliated with a hospital system and are often the only care provided in some communities, especially rural areas.

Medicaid patients

Most of these practices serve Medicaid patients (75%) in addition to commercial and Medicare patients.

Staffing shortages have led to practice closures and reduction in services

Regarding staffing, 89% of respondents said are having experiencing shortages. Of the respondents experiencing staffing shortages, 77% are experiencing challenges filling administrative staff positions, 75% are experiencing challenges filling medical assistant positions, 40% are having trouble filling nursing positions, and 33% are having trouble hiring physicians.

Staffing shortages have meant 46% of practices have had to reduce patience access. Almost 40% have had to reduce their office hours, as well as services and treatments offered to patients. One respondent noted that "We will most likely close our Walla Walla office by the end of the year. We understand we are the only eye surgeon serving the low income." If current staffing and financial trends continue, 51% of practices aren't confident they'll be able to provide the same level of patient access a year from now.

Other strategies to mitigate staffing challenges:

• Delayed well child care and chronic disease management.
• Our waiting room is now where we see patients.
• Limited number of new patients.
• Closed on Friday, longer wait times for patients.
• Delays in care and decreased access to services.
• Cut back on clinic based testing and closed satellite office.
• Increased workloads for staff which is causing burnout.

Inflation is impacting almost all practices

Inflation is impacting practices: 51% of respondents said that inflation has had a significant impact on their practice, while 44% said that inflation has had some impact on their practice. Of those impacted by inflation, 89% noted the rising cost of labor. To mitigate the impact of inflation, over 30% of practices have reduced office hours, patient access, and services and treatments offered to patients.

What physician groups said about inflation:

• Our staff are getting lured away for high cash compensation and forsaking our generous benefits package to keep up with their short-term financial stressors of rising rents/transportation/food.
• Supply chain disruptions, we can't get flu test kits, off and on shortages or syringes or medications.
• Payroll taxes, office equipment, supplies, malpractice insurance, property upkeep, and business taxes. Just to mention a few. I currently have my business for sale, it's become too much for a private practice to stay in business.
• Inflation is going up. Payment from insurers is going down or staying flat. This trajectory in not sustainable to recruit and retain physicians to our specialty in the long term.
• We raised our rates where we were able to, but insurance payments have not kept pace with inflation.
• Stopped services where reimbursement did not keep up with cost of goods used.
• Work harder and longer. Seeing 30+ patients per day per doctor at times.
• Limiting Medicaid patients.

Ideally, practices should have 18 weeks' (roughly four months) worth of days "cash on hand"

Defined as the number of days their organization can pay its operating expenses with current cash available, 93% of practices responded with having less than 4 months days cash on hand. Over half of practices report that their days cash on hand is down since November of 2021. Of those who reported that their cash on hand was down, 83% attributed it to staffing shortage or inflation.

Access to care for Medicaid patients is threatened

Of practices that see Medicaid patients, 46% have had to limit the number of Medicaid patients they see due to the practice's current financial statement. Furthermore, several respondents who haven't had to limit the number of Medicaid patients note it is a possibility in the future.

• We will have to limit should funding continue not to match inflationary increases.
• Not yet, but soon going that route.
• That could happen. That's what other practices are doing.
• We had a much larger number of Medicaid patients, but due to very poor financial return, we had to stop taking any new Medicaid patients, as well as turning away others that once were patients, but we hadn't seen within a year. We were going broke and didn't want to close our clinic.
• We have always had open access to all children, but for the first time in our 42-year history we are not taking new patients. We are unable to attract MDs to fill vacancies because we cannot compete with larger institutions that either do not take Medicaid or cap the number of Medicaid patients at a low rate.
• We had to discontinue providing eyewear to our Medicaid patients through the state plan. The payment of $20 per pair of eyewear was resulting in a substantial net loss.
• This remains the toughest population for us to see, primarily because the reimbursement is so low.

Without support patient access will suffer over the next year

Medical practices were asked if they will be able to provide the same level of patient access a year from now if staffing and financial trends continue. Just over 50% said they are not confident.

Medicaid rate increase a commonly cited solution

When asked if raising Medicaid rates to Medicare levels would be sufficient to maintain current Medicaid patent caseload, 63% said that would be sufficient; 37% said they would be able to increase their Medicaid caseloads.

• If (Medicare and Medicaid) rates were the same, we would consider increasing our caseload.
• Medicaid reimbursement has not increased in 20 yrs. Wages have changed dramatically.
• Variance in reimbursement (between Medicaid and other payers) is no longer sustainable.
• Increase in reimbursement for patient care would be helpful to keep on track with the other costs due to inflation.

Prior authorization an enormous burden for medical practices

Without prompting by the survey, several respondents noted the toll administrative burden and prior authorization requirements contribute to economic and staffing challenges:

• Work to increase reimbursement and cut red tape. Prior authorizations are a killer for staff.
• Help to improve prior authorization used as tactic to delay and deny care. Payer abuse in paying for approved services. Improve Medicaid rates to Medicare rates.
• Decrease administrative burdens and barriers which add to cost of overhead and do not add value to practice, i.e., prior authorization, poor EHR interoperability, regular insurance audits, increasing reimbursement for primary care, reimbursement for nutritional counseling, improving access to MHP.
• Commercial payers need to jump in and help by ending the onerous prior authorization processes. This alone would free up hours of precious staff time.