Boasting more than 30 years of experience in U.S. healthcare, Dr. David Custodio MD is a well-respected thought leader, representing the evolving needs of patients, highlighting industry challenges, and advising on how to avoid and overcome them.
In part one of my interview with Dr. Custodio, Dr. Custodio provides first-hand responses and real-world examples of the current challenges facing U.S. healthcare.
“What are the main challenges healthcare systems are facing at the moment?”
What comes to mind immediately was just the sheer efforts required to deal with the pandemic over the last few years.
Hospitals have always been prepared for intermittent disasters and healthcare systems have been prepared for imminent disasters. Typically, those are short-lived though.
You set up your response systems, what we call incident command systems, you just charge ahead and you finish. In this case, we had years of critical incidents for lack of a better way to put it. And what that did was highlight some of the already known issues.
I think the first that jumps to mind is the workforce, especially the nursing workforce. We were already in a nursing shortage and what the pandemic did was highlight and exacerbate those issues.
Not only did it overwhelm our current workforce and space; but what it did was create opportunities for folks to do things a little differently and so we have premium pay nursing agencies who will supply premium cost labor to help fill the holes in a system.
Typically, we would spend a small percentage of our budget on labor forces to fill in gaps. In this case, we went from spending a couple of million dollars to tens of millions of dollars on agency labor.
What we found was only about 1.5% of the nurses were unemployed and those were usually for a reason; either they were unemployable or chose to not be employed. Typically agency nurses go to a different state, provide care, and then return.
We also found in this particular region nurses were leaving their home team, going to an agency, and getting paid three times what they were being paid but only traveling a few miles.
The immediate supply and demand for staff aren’t limited to nursing but other technical positions as well. Radiology Techs, Respiratory Therapists, MRI Techs. We’re all experiencing that same workforce shortage, which then increased salaries.
Wide-spread staffing issues are causing additional knock-on effects resulting in providers closing units, and access to outpatient and inpatient testing because of the inability to acquire the quantity of staff that is needed, and subsequently provide the quality of care that is expected.
“Are fewer people becoming qualified?”
I think that when you look at the enrollment in nursing, it has declined. So health systems are getting novel and partnering with undergraduate institutions to sponsor training, nurses, and the like to bring them through the system with expectations of “If we pay your tuition for a period of time, then you sign a contract with the healthcare system for a number of years.” And so, those are some innovative strategies that may have existed previously, but the demand for them now is significantly higher.
You’ll see that we’re partnering with institutions to start talking to kids in high school about health care related careers. They have special programs that I’ve seen where they’ll sponsor tuition and even entry-level positions so that they can meet the workforce demands.
Another thing that we’re seeing is that international nursing has become more and more prominent, and we found that there were challenges that needed to be adjusted around visas.
The Philippines is a great example. Their number one export is nursing. There are hundreds of thousands of nurses that can’t work in the Phillippines but are looking to transfer abroad, and so we see healthcare systems partnering with agencies to bring them over.
Fewer folks are going into it. The nursing schools were closing for a period of time and now I think we’ll see an increase in that as long as the next generation workforce is interested in playing those roles.
“Are these roles not seen as having more longevity?”
When I went into practice it wasn’t just a job. It was a career or a calling.
My wife was a nurse and we were in the same healthcare system for over 30 years. But what we did 30 years ago compared to what we did in the last few years, it’s a different animal.
The expectations of patients and families rightfully are higher which is good. But also some of the civility and respect that we used to see being part of that profession. I don’t know whether it’s the pandemic, or whether it’s just the times in general, but the way healthcare workers are treated now versus how they used to be treated has changed.
We’re seeing healthcare violence across the country and the work-life balance has changed.
“How are the financial models in US Healthcare changing?”
In the United States for the longest period of time, you completed a procedure and you got paid for it regardless of the outcome, which is unit-based. A lot of healthcare has been delivered that way.
There’s a shift in the US healthcare system from a fee-for-service-based to a quality-based or value-based outcome, and we’re seeing that in the CMS performance. There is value-based purchasing, value related care.
There has been a shift whether it’s a capitated model where you get x amount of dollars to care for the population and then you provide that care and if you spend more than you should have, then that’s an adverse effect or if you spend less than there’s an opportunity.
The US healthcare system has been working towards a more value-based model including penalties associated with bad outcomes, but it’s not all the way there yet and it’s challenging.
But it’s headed in the right direction.
“How do bad outcome penalties work?”
There are hospital-acquired conditions, whether you get a bed sore or a catheter-related infection, or a bloodstream-associated infection, and if you hit certain levels of those above what is expected, then there are penalties associated with it, for example, there are significant readmission penalties and hospital-acquired condition penalties.
The government can withhold your payment based on your total Medicare, expenditures or revenues resulting in the following year’s budget being decreased by a certain percentage point, reflecting there are millions of dollars at risk for healthcare systems’ that show poor performance.
“How does overall experience factor into funding and penalties?”
Many healthcare systems have continued to use reimbursement models which rely on positive patient experiences. So, if you have poor experience scores, they can adversely affect your reimbursement in many programs.
They have bundling programs where you get a certain amount of payment for a certain procedure that includes the pre-work, the current work, and the follow-up for 90 days associated with it.
There are patient experience factors that are included in that, and so it behooves all healthcare organizations to provide the best experience for many reasons. Not only for the reimbursement side but for the retention of patients and loyalty.
When you talk about digital transformation, the primary goal is to improve patient engagement and experience because that translates to everything else that we’ve been talking about along the way.