Health care providers have been the frontline of our nation’s battle against the Covid-19 pandemic, and they have responded heroically. That said, the initial set of seemingly insurmountable challenges that hospitals had to overcome in every community across the U.S. — like accessing sufficient personal protective equipment so they could safely provide care — have now been replaced with a new problem of epic proportions: a tsunami of staffing and labor challenges.
These challenges were the number one issue that CEOs and CFOs from 20 of America’s most prominent health systems shared at this year’s recently concluded 40th Annual J.P. Morgan Health Care Conference. While nearly every industry is currently facing staffing problems, the issue in health care is especially acute due to the demands and burnout associated with being on the frontlines of care throughout the last two years.
This stress is contributing to a perfect storm driving significant staffing shortages. All hospitals and health systems are seeing increases in turnover, with major increases in early retirements, job changes to other opportunities, and exits to other professions. They are also seeing major increases in wages and taking on significant incremental costs due to the need to leverage agency and traveling nurses, whose rates typically come at a 200% to 300% premium. Since staff salaries represent more than 50% of a hospital’s budget, executives and leadership must think strategically about how best to manage these issues.
The scale of the financial aspect of this challenge is stunning, as there are thousands of open roles at provider organizations across the country — and the problem is only expected to get worse. New York and California, for example, are each projected to fall short by 500,000 health care workers as early as 2026. In response, organizations like Northwell Health in New York have been hiring 250 full-time employees per week just to keep pace with its current needs.
Many organizations, including Utah-based Intermountain Healthcare and Children’s Hospital of Philadelphia, built good karma with their workforce at the beginning of the pandemic by not furloughing non-essential personnel, not cutting pay, and not taking away bonuses. But that was then, and those actions and the good feelings that came from them are water under the bridge. Leadership teams at all hospitals are now huddling to determine how to address these problems right now.
5 strategies for overcoming staffing shortages in health care
Based on the presentations major health systems made during the JPM conference, here is a summary of what I see as the top five actions organizations are taking to help address their staffing challenges:
Investing in their current workforce. AdventHealth, headquartered in Florida, has invested more than $440 million in additional compensation for employees. Many health systems are also putting additional incentives in place for 2022, including offering additional benefits such as enhanced training for their teams. One example is Intermountain Healthcare, which is partnering with inStride to offer an education platform for caregivers and their families. Other critical investments include workflow tools that reduce administrative burdens on staff, like budgeting and planning, and help improve the productivity of their teams.
Accelerating clinician education. Many health care systems have invested in advanced training programs. CommonSpirit Health, the largest health system in Illinois, now has the largest nurse residency program in the country. Prisma Health, the largest health system in South Carolina, is partnering with colleges and universities to build out and accelerate training programs and, in some cases, will offer help with tuition. Children’s Hospital of Philadelphia shared at JPM that in order to address this issue in the long term, its focus may extend to high schools and even earlier.
Looking outside the U.S. for recruiting. Henry Ford Health in Michigan, which had already been recruiting nurses from Canada, is now looking to the Philippines for nurses, which it last did back in the 1980s. Many other organizations are also trying to develop international relationships to help develop long-term recruiting pipelines.
Developing a flexible approach to staffing. Some organizations are creating their own float pools of nurses. They are also cross-staffing between departments and facilities, as well as flexing from inpatient to outpatient. This approach also extends to non-caregivers. Ascension, a national health care system, currently has 40,000 employees working remotely, and many organizations will use remote employees on a permanent basis.
Deploying telehealth to increase access and efficiency. The rise in the use of telehealth spiked in mid-2020, as it was required due to limited access to in-person visits. According to data from the StrataSphere data consortium, which represents a cohort of the 2,000 hospitals my colleagues and I work with at Strata Decision Technology, the percentage of potential ambulatory visits that are now being conducted virtually has normalized at about 7%. In addition to other benefits like improving access to care, telehealth, E-ICUs, and other virtual platforms will be essential in ensuring a more efficient use of limited staff.
Supporting frontline workers is an investment in the future of care delivery
It’s clear that health systems have developed some strategies to better weather the Covid-19 storm, which has given them the ability to start looking to the future. However, no strategy or initiative will be successful without the resources to support it, and the primary focus for health systems right now must be addressing their labor challenges. As the last two years have proven, there is no one more important on the frontlines than caregivers.
Dan Michelson is the CEO of Chicago-based Strata Decision Technology, which provides a cloud-based financial planning, analytics, and performance platform that serves more than 2,000 hospitals.
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