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| The Monthly Pulse |
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| Physicians, hospitals decry 2025 Medicare payment rates
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| The Story |
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| The recent finalization of the 2025 Medicare reimbursement rates for physicians and hospital clinics will result in a 2.9% Medicare rate drop, leading to $1.8 billion less in funding for doctors in the coming year. The CMS did finalize a 2.9% rate update for outpatient departments and ambulatory surgery centers, as well as a 2.9% rate increase for inpatient care. Nonetheless, hospitals and organizations such as the American Hospital Association argue that these updates are inadequate, especially amid rising inflation and labor shortages.
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| What You Should Know |
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| The argument from hospitals that Medicare rate updates fall short has been ongoing for nearly two decades, and doctors that operate their own practices are most likely to be affected by recent factors such as rising inflation. Since 2001, Medicare reimbursement for physician services has declined 29% when adjusted for inflation, a trend that the American Medical Association decries as unsustainable. Several groups have advocated for a yearly inflation-based update to Medicare physician payments as an alternative.
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| How to Align Physician Incentives to Manage Care Costs
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| The Story |
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| With rising health care costs, health systems are seeking strategies that can control expenses while maintaining quality patient care. One option is to tie physician incentives to cost-control outcomes, which can be achieved through several approaches. |
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| What You Should Know |
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| Broad incentives such as reducing the total cost of care are often better received than narrow programs, such as shortening patients’ stay. Other effective strategies include blending individual and team-based incentives, rewarding maintained savings in addition to cost reductions, and offering a menu of rewards tailored to individual preferences. With these factors in mind, incentives should be motivational but only make up a small portion of compensation — 5 to 15%, for instance — so they don’t distract physicians from providing the best possible care.
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| 3 Areas of the Workforce CEOs Are Locked In On |
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| The Story |
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| As pressures continue to rise for healthcare systems looking to grow their workforce, leaders will need to focus on several key priorities to address ongoing challenges. For many CEOs, these include recruiting and retaining younger generations of workers, leveraging the right technology to fill in gaps, and driving efficiencies at every level. |
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| What You Should Know |
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| While implementing these strategies can benefit healthcare organizations, they must be backed by actionable tactics. For example, offering incentives such as greater scheduling flexibility can go a long way to attract younger workers, while deploying AI to relieve workers of certain time-draining administrative tasks can empower employees to focus on more value-added work. Lastly, leaders should work with employees at all levels of the organization to identify opportunities for improving efficiency.
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| Growing Physician Leaders, Creating Stronger Executive Teams |
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| The Story |
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| As a leadership gap looms for healthcare organizations, it’s becoming increasingly important to put robust leadership development programs in place. These efforts can help organizations become more stable over the long-term, empower physicians to pursue leadership opportunities, and nurture quality leadership candidates. |
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| What You Should Know |
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| To prepare physicians for leadership roles, healthcare organizations should consider offering formal education opportunities. These could include Master of Business Administration or Master of Health Administration programs, as well as professional certificate programs. Other options include establishing formal mentorship programs or leadership, development, and executive coaching programs.
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| Marcus Evans Healthcare CMO/CNO Summit |
| Mon., Feb. 3 - Tues., Feb. 4 |
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ViVE 2025 - Where Digital Health Execs Go to Do Business |
| Sun, Feb. 16 - Wed., Feb. 19 |
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| National Association of Health Services Executives C-Suite Leadership Experience |
| Thurs., Apr. 10 - Sun., Apr. 13 |
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| Becker's Healthcare 15th Annual Meeting |
| Mon., Apr. 28 - Thurs., May 1 |
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| 2025 AHA Annual Membership Meeting |
| Sun., May 4 - Tues., May 6 |
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