The healthcare industry is facing a significant crisis: a shortage of providers.
This shortage has far-reaching effects, not just on patient care but also on the financial health of healthcare organizations. From delayed revenue to overworked staff, the ripple effects of fewer providers are being felt across the board.
Here’s why it’s more than just a staffing issue—it’s a revenue and patient access crisis, and healthcare organizations must act quickly to adapt.
The Financial and Operational Impact of Provider Shortages
As the healthcare workforce continues to shrink, the effects ripple across both operational and financial aspects of healthcare organizations.
From delayed revenue due to slow credentialing to the strain on remaining staff, the consequences of provider shortages are far-reaching.
Below are four key challenges organizations face and why it’s critical to take proactive steps to mitigate these issues before they escalate.
Slower Credentialing & Enrollment = Delayed Revenue
As more providers retire early or leave the field, replacing them becomes a priority. However, onboarding new providers isn’t as simple as filling a vacancy.
Credentialing and enrollment with payors can take months, leaving new providers unable to bill for services right away. In many cases, this results in delayed revenue that can significantly impact an organization’s cash flow.
Legacy’s experts assist with proactive credentialing and enrollment, which can help mitigate these delays, ensuring that new providers can begin seeing patients and generating revenue as soon as possible.
Gaps in Care Access = Declining Patient Volume
When there are fewer providers available, patients are forced to seek care elsewhere—or worse, delay it altogether. This is especially critical in rural and underserved areas, where access to healthcare has always been a challenge.
The impact is twofold: lower patient volumes and a decline in ancillary service revenue (e.g., labs, imaging). Healthcare organizations that are already dealing with tight margins may find this especially damaging, as reduced patient flow means less revenue across multiple departments.
Overworked Remaining Staff = Burnout & More Turnover
As provider shortages continue, the remaining staff must shoulder an increasing workload. While this can work as a short-term fix, it ultimately leads to burnout, reduced productivity, and, eventually, more turnover.
The longer this cycle continues, the more it will cost organizations, from increased expenses for locum tenens and hiring bonuses to the difficulty of onboarding new staff. And let’s not forget the impact on morale: overworked staff can lead to a toxic work environment, which only exacerbates the turnover problem.
Difficulty Meeting Quality & Value-Based Metrics
With fewer providers available to care for patients, healthcare organizations struggle to meet key quality and value-based performance metrics.
These contracts are tied to patient outcomes, and with fewer providers touching more patients, it’s harder to provide the level of care necessary to meet those goals. The result? Lost incentive dollars and, in some cases, penalties from payors.
Falling short on these metrics can have long-lasting financial consequences, making it crucial to develop strategies that keep performance high despite workforce challenges.
Why Is This a Crisis Now?
Several factors are converging to make the provider shortage particularly urgent:
- Wave of Retirements: Baby Boomer physicians, who make up a significant portion of the healthcare workforce, are retiring at an accelerated pace—many choosing to leave the workforce early, especially after the COVID-19 pandemic.
- Burnout & Moral Injury: The COVID-19 pandemic exacerbated stress, administrative burdens, and overall dissatisfaction, especially among primary care providers and those in emergency medicine. This burnout has led many to reconsider their career paths.
- Pipeline Problems: Medical schools and residency programs haven’t kept pace with the growing need for healthcare providers. This is particularly evident in high-need specialties like behavioral health and OB/GYN.
- Geographic Maldistribution: Many providers are hesitant to work in rural or underserved areas, where they are most needed, further exacerbating the crisis.
What Can Hospitals & Physician Groups Do to Prepare?
Healthcare organizations must act strategically to overcome these challenges. Here are some ways to prepare:
1. Build a Proactive Credentialing & Enrollment Strategy
Start the credentialing process early—before providers even begin. Legacy Consulting Services can handle the workload and speed up the process. This proactive approach will reduce delays and ensure new providers can start generating revenue right away.
2. Invest in Retention
It’s often more cost-effective to retain a good provider than to recruit a new one. Invest in flexible schedules, provider wellness programs, and administrative support to reduce burnout and improve retention. A happy, healthy provider is more likely to stay long-term and contribute positively to your organization’s bottom line.
3. Leverage Telehealth & Locum Support
Telemedicine is an invaluable tool to fill gaps in specialty coverage. By offering telehealth services, healthcare organizations can provide care to patients who may otherwise have trouble accessing it. Additionally, having a pool of locum tenens or part-time providers can help bridge short-term needs without the overhead of hiring full-time staff.
4. Tighten Operational & Revenue Cycle Processes
With fewer providers available to see patients, every billed dollar becomes more important. Now is the time to ensure your billing, coding, AR management, and denial processes are airtight. Tightening these processes will help mitigate the impact of provider shortages on your revenue cycle.
Legacy Can Help
At Legacy Consulting Services, we specialize in helping healthcare organizations streamline their provider onboarding, accelerate credentialing, and tighten revenue cycle management—especially during times of workforce challenges.
If your organization is feeling the squeeze, let’s talk. We’ll help you navigate this crisis and come out stronger on the other side.Contact us today to learn how we can help you build a resilient and efficient provider network, even in the face of a workforce shortage.