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Becker’s Healthcare Podcast
Laura Dyrda on Policy Shifts and Workforce Pressures in Healthcare
00:08:45
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- [00:00]
A
This is Scott Becker with the Becker's Health Care Podcast. I'm thrilled today to be joined by Laura Dearda, editor in chief of Becker's Health Care. She joins us regularly to talk about what she's watching in health care, the big stories and more. Laura, can I ask I'll teed up and ask you to take it away. What are some of the big stories that you're watching currently?
- [00:20]
B
And Scott, well thank you so much again for having me. I think right now one of the big stories that we're looking at and have been following for the last several months is just what's happening currently with 340B program and some of the ins and outs and ups and downs of that program. But the biggest news in recent days is the American Hospital association alongside the Maine Hospital association of for safety net hospitals filed a federal lawsuit to halt some of the upcoming changes, what they've described as unlawful changes to the 340B pricing program, which they warn could shift some of the major financial challenges and burden onto hospitals and health systems, especially the rural and underserved communities nationwide. The lawsuit was filed December 1st and challenges HHS's plan to move the 340B program to a new rebate based model beginning January 1st. Under these changes, the safety net hospitals and clinics would be required to pay full market price for the drugs up front and then seek reimbursement after administration would be a complete reversal for some of the longstanding upfront discount model programs that have supported 340B providers for more than 30 years. The AHA is arguing that the new structure would settle hospitals with hundreds of millions in added annual costs, extensive administrative bureau burdens and not really benefit patients at all, the AHA President and CEO Rick Pollack said. Giving hospitals only a few months to comply with these new requirements or risk losing millions of dollars in discounts which they are entitled to, actually harms patients and communities across the country. According to the AHA, 340B hospitals provide nearly $100 billion in community benefit in 2022 alone, including free and discounted medications, behavioral health services, opioid treatment and food pant. This new model the federal government announced on July 31 and since the CEOs and CFOs across the country have really been thinking and strategically contingency planning for what would happen if these changes actually go through, some have mentioned pivoting to tap into potential new revenue streams or philanthropic sources amid this transition, which they're hoping doesn't occur. But as of now it's still slated to change next year. And they're also looking at things like uncertain Medicaid coverage, ACA subsidies, and additional uninsured patients and charity care in the next year because of all of this change. And so hospital leaders are really gearing up for a challenging 2026, but they're also finding spaces for true innovation and transformation within some of these tight spots they're in. And so they're trying to continue to positively impact their communities and workforce amid these uncertain times.
- [03:05]
A
Thank you very, very much. In these lawsuits by the AHA and others, what do those look like? Is there a chance of success for those? Is it just negotiation, or can those really be effective?
- [03:16]
B
Yeah, yeah. You know, I think there is always a possibility of potential for success and for changes that I think we've seen back and forth, especially if legislators see in their districts, their hospitals are something that their communities are proud of and really want to keep sustained. You know, no congressperson or legislator really wants to be the one that puts programs in place that are going to make healthcare more challenging within their districts. And so, you know, really framing it in that way could be helpful and beneficial if they actually get backing from people in D.C. and there's a real movement towards.
- [03:57]
Not allowing this to happen. However, it's just uncertain as to how much momentum it actually has, the influence that'll have. Obviously, there's not much time through the beginning of next year, and so it would have to be a very quick, you know, temporary suspension or something along those lines while their details are continuing to be reviewed, I think. But, you know, I. I know that American Hospital association, as well as others have really been on this for a while. And so filing this lawsuit certainly, you know, is a next step in another effort to really try to prevent the changes to 340B happening. So you. It's tough to say exactly the chances of success, but I do think, you know, we have seen positive momentum in being able to shift some of the policies and priorities of the Trump administration if there's enough energy behind making those changes or slowing down the process. Because hospital and health systems would be too negatively impacted.
- [04:57]
A
No, I think that's right on. So watching the 340B, watching the AHA, the Federation, others look at this, what are the stories that you're watching currently? Is there anything else that's top of mind?
- [05:06]
B
Absolutely. So another thing that has been top of mind for us, too, is just really continuing to think about how hospitals and health systems are dealing with the labor crisis. I think staffing both from Staffing shortages on the clinical and administrative side, then continuing to see their costs increase. It's just a challenge for hospitals and health systems. And some, you know, would think that maybe increasing labor cost is a good thing because they're investing in the workforce. But you know, especially if you're looking at a tighter margin and the labor typically being a large portion of any hospital or health systems budget and expenses, it's, you know, something that hospitals and health systems are really thinking about. So it's been interesting to see in Kaufman Hall's last report. You know, we're really seeing more and more of the persistent climb in labor expenses even as hospitals have gotten away from more contract labor as they've implemented AI to try to become more efficient with less people. We've seen the month over month costs for hospitals and health systems continue to rise. I think nationally labor expenses were up 2% in September from month over month and 5% year over year. And just in looking at year to date, we're still about 5% up from 2023. And so that continues to build some of the workforce inflation settling in and additionally becoming more of a permanent part of the operating environment, hospitals and systems. And then regionally, you know, we saw in the west, labor costs are rising because competition for staff is intense and the wage floors are increasing. In the Midwest we saw a bigger month to month jump around 3% in just one month, signaling some, you know, shifting workforce dynamics. In the south we see a steadier but stable workforce take shape. We're seeing more retention, we're seeing additional culture and leadership development because, you know, things have plateaued one bit. But, but then in the Great Plains region, we saw a bigger year over year increase about 7% in labor expenses, which suggests some delayed market corrections may be hitting that space all in once. And so, you know, I think in terms of hospital size too, we see some fluctuation. Mid sized hospitals are feeling the squeeze from labor expenses, but as well as like the labor shortages. And so we're seeing higher costs rising there and it's just been a challenge for those. But we do see, you know, a little bit of a light at the end of the tunnel hearing from a lot of hospital health system executives how they're thinking about the future. They're building more pipeline programs, investing in the community colleges and universities in their area to bring in not only nurses, but also additional technical staff, you know, it cybersecurity, partnering with their local schools to train, even at the high school and middle school level. And so it's just been interesting to see more of those programs take shape and additional efforts to reschedule and upskill their teams and build more middle management as they incorporate artificial intelligence to try to right size how they're thinking about their workforce, the resources. So it's been just a very interesting year for the workforce and I think it'll continue to be that way in 2026 and beyond.
- [08:31]
A
Thank you very, very much, Laura. What a pleasure to visit with you today on the Beckers Healthcare podcast. Again, Laura Dearda, tremendous leader at Becker's Healthcare. Thank you for joining us today.
- [08:41]
B
Thanks so much, Scott. I appreciate it.