Category: 2025

Physician Burnout: Seeing Improvement but Still a FixableCause for Medical Errors

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By: Jenn Negley, Vice President, Risk Strategies Company

Physician burnout is not a new phenomenon, but its prevalence has recently reached alarming levels. According to a 2021 survey by Mayo Clinic and Stanford Medicine, 62.8% of physicians reported experiencing burnout. While the numbers have improved, with a more recent AMA study showing that 50% of physicians are now struggling with burnout, the issue remains far from solved. The lingering effects of the COVID-19 pandemic, growing mistrust in medical science, and misinformation continue to place added stress on healthcare providers, making burnout a critical issue that affects both physicians and patients.

The Lasting Impact of Administrative Challenges

A key factor fueling burnout in physicians is the increasing administrative burden they face. Constantly changing regulations, including the often-onerous prior authorization (PA) processes, have been cited by physicians as major contributors to job dissatisfaction. The American Medical Association (AMA) has voiced concerns about PAs, describing them as a “barrier between patients and necessary care under the guise of controlling costs.” According to the AMA’s latest survey, 95% of physicians reported that the PA process either somewhat or significantly increased their burnout.

While administrative tasks are a challenge in many professions, in healthcare, the stakes are much higher. When physicians are overwhelmed by paperwork, their ability to provide optimal patient care is compromised, which directly impacts patient safety. Medical errors, which are already a significant concern, are further exacerbated by burnout.

Physician Burnout and Its Link to Medical Errors

The relationship between physician burnout and medical errors is well documented. In a study led by Daniel Tawfik and published in Mayo Clinic Proceedings, it was revealed that rates of medical errors tripled in work units where physicians reported high levels of burnout—even in units with top safety ratings. This data makes it clear: burnout doesn’t just affect physician well-being—it directly impacts the quality of care they provide.

Though healthcare systems have made progress in improving patient safety through system-level interventions, we cannot overlook the role of the physician’s mental health. If physicians are experiencing burnout, even the most well-designed systems will fail to prevent medical errors. In fact, burnout could undo many of the safety gains achieved through system-level changes. To reduce errors and improve care, we must address the root cause of burnout.

Addressing the Root Causes of Burnout

There are clear steps that can be taken to reduce burnout and improve both physician well-being and patient care. First and foremost, healthcare organizations must create a culture where mental health is prioritized. This begins by fostering an open dialogue about burnout, encouraging physicians to seek help when needed, and ensuring they have access to mental health resources.

While individual support is crucial, systemic changes are just as important. The administrative burden physicians face must be reduced by streamlining processes such as prior authorizations and cutting down on redundant tasks. Physicians should be allowed to focus on patient care, rather than spending countless hours on paperwork. Furthermore, healthcare leaders must listen to the needs and concerns of their staff, ensuring that burnout is addressed not just as a personal issue but as an organizational one.

• To make a lasting impact, addressing burnout requires collaboration among all stakeholders, including healthcare systems, insurance companies, the government, and technology providers. Solutions should include adjusting workflows, improving reimbursement rates, and eliminating unnecessary administrative barriers. If we tackle these issues, we can create an environment that supports physicians and, in turn, improves the quality-of-care patients receive.

Conclusion: Physician Burnout Is a Fixable Problem

While physician burnout rates have improved, they remain alarmingly high and continue to contribute to medical errors. This is a crisis that cannot be ignored. The good news is that burnout is a fixable problem—one that requires the collective effort of healthcare leaders, administrators, policymakers, and the broader healthcare system. By addressing the root causes of burnout, such as administrative burdens, and fostering a culture of mental health support, we can reduce medical errors and ensure that physicians are able to provide the best possible care to their patients.

For more information, please contact Jenn Negley, Vice President, Risk Strategies Company at 267-251-2233 or JNegley@Risk Strategies.com.

Tackling Drug Costs In New York State

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New York Governor Kathy Hochul signed legislation amending subdivision five of Section 280-a of the New York Public Health Law (“PHL”) and announced new regulations that aim to protect New Yorkers from the rising cost of prescription medications. Both target the operations of Pharmacy Benefit Managers (“PBMs”) by prohibiting business practices that raise the cost of prescription drugs and by increasing opportunities for independent pharmacies to compete with large, PBM-affiliated pharmacies. 

What are Pharmacy Benefit Managers?

PBMs are third-party ‘‘intermediaries’ that help negotiate costs and payment of prescription drugs between the major players in the prescription drug supply chain: health insurance providers, drug manufacturers, wholesalers, and pharmacies. PBMs determine which drugs are accessible to consumers, at what cost, and often by what pharmacies. 

PBMs contract with health insurance providers to manage prescription drug benefits for insured beneficiaries. PBMs do this by creating and maintaining formularies, which are lists of prescription drugs covered by health insurance plans. Each insurance plan has a unique formulary. When creating a formulary, PBMs negotiate discounts and rebates with drug manufacturers. That determines the prices insurance plans pay for prescription drugs and payments pharmacies receive for distributing drugs to consumers insured by the plan. 

When PBMs negotiate rebates with drug manufacturers, they typically retain a percentage of the rebate as profit, rather than passing the full amount to consumers. Because prescription drugs with higher prices often have higher rebates, PBMs are incentivized to include higher priced drugs on their formularies.

PBMs also play an administrative role for insurance providers by directly reimbursing pharmacies for dispensing drugs. PBMs receive administrative fees for these services from insurance providers and profit from ‘spread pricing.’ When a PBM receives a higher payment from an insurance provider than the amount the PBM pays to pharmacies, the PBM retains the difference. Legislators have identified spread pricing as a factor in increasing costs of prescription drugs for consumers.

The Federal Trade Commission reports that only three PBMs manage approximately 80% of all prescriptions filled in the U.S and that pharmacies affiliated with those PBMs account for nearly 70% of all specialty drug revenue. Critics argue that the tightly controlled marketplace has led to increased costs to patients and the closure or sale of independent pharmacies. 

PBM Regulation in New York 

In January 2022, Governor Hochul signed a first-of-its kind law in New York, providing for licensure and registration of PBMs. The law also set new standards that PBMs are required to comply with when operating in the State. In addition to reducing costs for consumers, Governor Hochul cited increased transparency regarding PBMs’ operations as a chief goal of the law.

The State Department of Financial Services is empowered to enforce the law and can receive complaints of violations of the law by PMBs from New Yorkers, pharmacies, and health care providers.

Impact of Amended PHL and New Regulations 

On September 27, 2024, the Governor signed legislation that eliminated the ‘gag clause’ that had prohibited pharmacists from telling consumers about negative reimbursements charged to pharmacies for prescription drugs. Negative reimbursements cause pharmacies not to stock certain drugs, limiting access to essential prescription drugs for consumers. By lifting the gag clause, pharmacists can explain why they cannot stock certain drugs, and consumers can use that information to petition their health insurance provider to increase access. 

The Governor recently announced new regulations governing market conduct for PBMs that:

• allow home delivery of prescription drugs by in network pharmacies;

• mandate PBMs to publish formularies and pharmacy directories;

• require PBMs to establish customer service lines;

• prohibit PBMs from steering patients to affiliated pharmacies;

• prevent PBMs from passing losses onto pharmacies when the PBM mistakenly approves a dispensed drug;

• permit small pharmacies to submit and receive electronic communications from PBMs; and

• require PBMs to apply the same audit standards to all in network pharmacies, helping small pharmacies compete with PBM affiliate pharmacies.

The regulations, supported by the Pharmacist Society of the State of New York, are anticipated to empower consumers, increase access to prescription drugs, level the playing field for small pharmacies and lower costs of prescription drugs across the State. 

For questions, contact Lippes Mathias attorney Sarah E. Steinmann by phone at 315-477-6232 or by email at ssteinmann@lippes.com.