The 2021 Physician Staffing Outlook

The COVID-19 pandemic has been felt in every corner of the health care market. To look at how it has affected the physician staffing business, as well as for a view of how that sector will fare in 2021, GLG recently spoke with Mark Switaj, former chief operating officer of the North Division at Envision Physician Services/EmCare. Edited highlights of that discussion follow.

Do you think the shift we’ve seen in emergency room (ER) volume going to telehealth, outpatient clinics, doctor’s offices, and other lower-cost settings will become permanent?

Several factors are at work pushing us in that direction. First, the availability of those alternate settings has grown, as have their service offerings. The high-deductible health plans used by many people encourages people to be mindful of cost. If you go to an urgent care facility, for example, you’re going to pay less — about 13% to 27% less, on the whole — than if you had gone to an ER. Continued urgent care growth, therefore, is likely.

Could an Envision staff urgent care centers, and how profitable would that be versus ER contracts?

Many PPMs (physician practice management companies), including some of the largest, staff urgent care centers, often as an extension of their acute hospital relationships. Margins are depressed for those acute hospital staffing models, and staffing those urgent cares has been a mixed experience. Urgent cares need not be staffed by board-certified emergency medicine clinicians, meaning the clinicians who work there are paid less than if they were staffing the ER. Based on what we’re seeing, this hasn’t been a great time to be in urgent care staffing, but it’s getting better. Health plans are shifting volume to urgent care, and access is becoming more readily available. As we normalize coming out of COVID, it won’t be a bad business to be in.

At what point do you see a crossover where the volume from urgent care makes up for the lower reimbursements?

Even though reimbursement is lower in urgent care, remember that clinician costs are also lower and the time to treat is quicker. So on the whole, it’s a nice model and much more of a volume game. I think a nice sweet spot would be an ER with a handful of urgent cares in the surrounding community. I also see a lot of urgent cares being created or staffed by acute hospitals in locations where there is a more favorable payer mix. Remember that in an ER, you have to be seen and treated whether or not you have insurance, but that isn’t always the case at an urgent care.

From the doctor’s point of view, is it better to work in urgent care or an ER?

If you’re an ER-certified or board-certified ER physician, you may not want to go work at an urgent care. At the same time, many ER clinicians are fine doing it, sometimes because there’s lower malpractice exposure, which is good for the practice and also good for the psyche of the clinician, and sometimes because you generally don’t have to staff overnight or maybe on holidays or weekends, providing a better work-life balance.

Do you think COVID will reverse the outsourcing trend in ERs?

As a result of the pandemic thus far, we’ve seen decreased revenues to hospital organizations and decreased revenues from provider groups as a result of fewer patients. That may drive the continuing consolidation of hospitals, which could in turn lead to more insourcing. But ultimately, I think hospitals would continue to outsource specific specialties to PPMs, and most notably to larger PPMs, because those specialties aren’t the hospital’s core focus. ERs and other specialties such as anesthesiology that large PPMs provide are not referral pattern practices like surgery, and they are not a hospital’s moneymakers.

Do you think large PPMs will continue to exist and, if so, what will their value proposition be?

They will continue because due to the size of the physician networks they have created, they can recruit clinicians to a particular specialty. When you couple that with their ability to handle all of the back-office administrative support that affects a clinician’s work experience and that they tend to work in the areas that are not the most lucrative service lines for hospitals — emergency departments, anesthesiology, radiology and teleradiology, and even areas like neonatology — they will continue to exist in order to provide value to hospitals.

As a wrap-up, can you give us a capsule view of what you see coming in 2021?

The first is more consolidation among PPMs. Second is that telehealth, in some form or fashion, is here to stay. It could be used as a tool, and given the size of large PPMs and their number of providers, telehealth consults could be a way to see patients they haven’t been seeing. Third, more people who formerly used ERs will be using other care settings, but the persistence of COVID will mean that ERs will remain very busy. And, as we go into the new year, I think reimbursements will be anywhere from 6% lower to flat.

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About Mark Switaj

Mark Switaj is the Founder and Chief Executive Officer of RoundTrip, an independent health care start-up that is improving the way patients request sedans, wheelchairs, vans, stretcher vans, and other health care transportation services. Previously, Mark was Chief Operating Officer, North Division at Envision Physician Services/EmCare. Envision specializes in emergency medicine, hospital medicine, radiology, and anesthesia medicine practice support.

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This health care industry article is adapted from the November 2, 2020, GLG teleconference “Envision Healthcare: 2021 Outlook.” If you would like access to the full teleconference transcript or would like to speak with healthcare industry expert Mark Switaj, or any of our more than 700,000 industry experts, contact us.