Hospitals paying $24 billion more for labor during the COVID-19 pandemic

https://www.healthcarefinancenews.com/news/hospitals-paying-24-billion-more-labor-during-covid-19-pandemic

Clinical labor costs are up by an average of 8% per patient day, translating to $17 million in additional annual labor expenses.

As the delta variant pushes COVID-19 caseloads to all-time highs, hospitals and health systems across the country are paying $24 billion more per year for qualified clinical labor than they did pre-pandemic, according to a new PINC AI analysis from Premier.

Clinical labor costs are up by an average of 8% per patient day when compared to a pre-pandemic baseline period in 2019. For the average 500-bed facility, this translates to $17 million in additional annual labor expenses since the beginning of the public health emergency.

The data also shows that overtime hours are up 52% as of September. At the same time, the use of agency and temporary labor is up 132% for full-time and 131% for part-time workers. The use of contingency labor – positions created to complete a temporary project or work function – is up nearly 126%.

Overtime and the use of agency staff are the most expensive labor choices for hospitals – usually adding 50% or more to a typical employee’s hourly rate, Premier found.

And hospital workers aren’t just putting in more hours – they’re also working harder. The analysis shows that productivity, measured in worked hours per unit of departmental volume, increased by an average of 7% to 14% year-over-year across the intensive care, nursing and emergency department units, highlighting the significance of the increases in cost-per-hour.

Another complicating factor is that hospital employees are more exposed to COVID-19 than many other workers, with quarantines and recoveries requiring the use of sick time. The data shows that use of sick time, particularly among full-time employees (FTEs) in the intensive care unit, is up 50% for full-time clinical staff and more than 60% for part-time employees when compared with the pre-pandemic baseline.

WHAT’S THE IMPACT

The combined stressors of working more hours while under the constant threat of coronavirus exposure are pushing many hospital workers to the breaking point. In fact, the data shows clinical staff turnover is reaching record highs in key departments like emergency, ICU and nursing. 

Since the start of the pandemic, the annual rate of turnover across these departments has increased from 18% to 30%. This means nearly one-third of all employees in these departments are now turning over each year, which is almost double the rate from two years ago.

This is a number that could increase as new vaccination mandates take effect. Already, one Midwestern system reported a loss of 125 employees who chose not to be vaccinated, while a New York facility reported another 90 resignations. Overall, staffing agencies are predicting up to a 5% resignation rate once vaccine mandates kick in. 

While a minority of the overall workforce, losses of even a few employees during times of extreme stress can have a ripple effect on hospital operations and costs.

THE LARGER TREND

According to the American Hospital Association, hospitals nationwide will lose an estimated $54 billion in net income over the course of the year, even taking into account the $176 billion in federal CARES Act funding from last year. Added staffing costs were not addressed as part of CARES and are further eating into hospital finances. 

As a result, some are now predicting that more than half of all hospitals will have negative margins by the end of 2021 – a trend that could be dire for some community hospitals. 

Prior to the pandemic, about one quarter of hospitals had negative margins, the Kaufman Hall data showed. At the beginning of 2021, after almost a year of COVID-19, half of hospitals had negative margins.

Meanwhile, the most potentially disruptive forces facing hospitals and health systems in the next three years are provider burnout, disengagement and the resulting shortages among healthcare professionals, according to a March survey of 551 healthcare executives.

Possible strike looms for 28,000 Kaiser workers in Southern California

80,000 Kaiser Permanente workers to strike nationwide in October | Fox  Business

Nurses and other healthcare workers have voted to authorize a strike at Kaiser Permanente in Southern California, according to a union news release.

The vote covers 21,000 registered nurses, pharmacists, midwives, physical therapists and other healthcare professionals represented by the United Nurses Associations of California/Union of Health Care Professionals, as well as 7,000 members of United Steelworkers. It does not mean a strike is scheduled. However, it gives bargaining teams the option of calling a strike. Unions representing the workers would have to provide a 10-day notice before striking.

The vote comes as Oakland, Calif.-based Kaiser is negotiating for a national contract with UNAC/UHCP, along with about 20 other unions in the Alliance of Health Care Unions. The alliance, which has been in negotiations with Kaiser since April, covers more than 50,000 Kaiser workers nationwide.

UNAC/UHCP said union members are facing “protracted understaffing” amid record levels of burnout during the COVID-19 pandemic.

“While healthcare workers are facing record levels of burnout after 18 months of the COVID pandemic, they continue to deal with protracted understaffing. Talks at the table center on how to recruit to fill open positions that impact patient care and service,” the union said in a news release. “Kaiser Permanente … wants to slash wages for new nurses and healthcare workers and depress wages for current workers trying to keep up with rising costs for food, housing and other essentials.”

Kaiser has defended its pay amid a challenging pandemic, saying its proposal includes wage increases for current employees “on top of the already market-leading pay and benefits,” as well as a market-based compensation structure for those hired in 2023 and beyond.

In a statement shared with Becker’s Oct. 11, the system also emphasized its continued focus on high-quality, safe care.

“In the event of any kind of work stoppage, our facilities will be staffed by our physicians along with trained and experienced managers and contingency staff,” the system said. 

This strike would affect Kaiser hospitals and medical centers in Anaheim, Bakersfield, Baldwin Park, Downey, Fontana, Irvine, Los Angeles, Ontario Vineyard, Panorama City, Riverside, San Diego, West Los Angeles and Woodland Hills, as well as various clinics and medical office buildings in Southern California.

Shortage of healthcare workers amid high demand for jobs

https://mailchi.mp/13ef4dd36d77/the-weekly-gist-august-27-2021?e=d1e747d2d8

The US now has more job openings than any time in history—and the mismatch in workforce supply and demand in the broader economy is even more acute in the healthcare sector. While the industry saw significant job losses in April 2020, employment in many healthcare subsectors quickly rebounded to slightly below pre-pandemic levels, according to data from the Bureau of Labor Statistics. 

While ambulatory and hospital employment has mostly recovered, employment in nursing and residential care facilities has continued to decline. 

Healthcare’s sluggish return to pre-pandemic employment levels is not for lack of demand. The number of job listings has grown nearly 30 percent since the second quarter of 2020, to nearly 4.5M openings, while new hires have flatlined, resulting in over half of healthcare job listings remaining unfilled as of Q2 2021. 

In a recent McKinsey & Company survey of over 100 large US hospitals, health system executives ranked workforce shortages among nurses and clinical staff as their greatest barrier to increasing capacity.

Amid the current COVID surge, many systems are offering sizeable bonuses to attract new employees. These strategies will be critical across the next year, as systems look to reduce spending on costly travel nurses, manage COVID surges while continuing to offer elective care, and forestall further burnout.

But longer term, rethinking job functions, integrating new technology and finding ways to educate and upskill critical clinical talent will be key to winning the war for talent.

Scripps delays nonurgent procedures amid staffing shortages

Scripps delays some procedures over staff shortage, COVID spike

Scripps Health is temporarily postponing some medical procedures because of significant staffing shortages and a jump in COVID-19 cases, the San Diego, Calif.-based system said Aug. 20, according to CBS News 8.

Medical staff is deciding which procedures to delay based on clinical factors and emergency status, with time-sensitive care still being delivered, Scripps leaders said. 

The health system said it is also considering temporarily consolidating some ambulatory care sites due to workforce shortages. 

At present, Scripps said it is looking to fill 1,309 open positions. In August 2019, the system had just 832 openings. About 430 of the openings are for nursing positions, up from 220 open positions in 2019, according to the report.

At the same time, the health system is seeing its COVID-19 patient volume grow. Scripps has 173 patients admitted at its five hospitals, up from 13 patients on June 13.

“The COVID pandemic has taken a serious toll on healthcare workers across the nation, and many have decided to leave the field entirely for reasons such as fatigue and burnout,” said Scripps’ President and CEO Chris Van Gorder, according to CBS News 8. “We’re doing all we can to fill open positions and shifts, but options are currently limited across the board in healthcare, so we’re doing what’s necessary to ensure we have staff available for our most urgent cases.”

To view the full article, click here.

Primary Care Faces Existential Threat Over Healthcare Workforce Woes

40% of primary care clinicians worry that the field won’t exist in five years as many in the healthcare workforce experience burnout and plan to leave the field.

 Clinician burnout, lay-offs, and other healthcare workforce challenges coming out of the COVID-19 pandemic are creating issues for primary care, according to a new survey.

About 40 percent of over 700 primary care clinicians recently surveyed by the Larry A. Green Center, Primary Care Collaborative (PCC), and 3rd Conversation worry that primary care won’t exist in five years’ time. Meanwhile, about a fifth say they expect to leave primary care within the next three years.

“Primary care is the front door to the healthcare system for most Americans, and the door is coming off its hinges,” Christine Bechtel, co-founder of 3rd Conversation, a community of patients and clinicians, said in a press release. “The fact that 40 [percent] of clinicians are worried about the future of primary care is of deep concern, and it’s time for new public policies that value primary care for the common good that it is.”

The threat to primary care comes as practices ramp up vaccination efforts. The survey found that more than half of respondents (52 percent) report receiving enough or more than enough vaccines for their patients, and 31 percent are partnering with local organizations or government to prioritize people for vaccination.

Stress levels at primary care practices are also decreasing compared to the height of the pandemic, according to survey results. However, over one in three, or 36 percent, of respondents say they are experiencing hardships, such as feeling constantly lethargic, having trouble finding joy in anything, and/or struggling to maintain clear thinking.

Clinician fatigue could spell trouble for the primary care workforce and the field itself, researchers indicated.

“The administration has now recognized the key role primary care is able to play in reaching vaccination goals,” Rebecca Etz, PhD, co-director of The Larry A. Green Center, said in the release. “While the pressure is now on primary care to convert the most vaccine-hesitant, little has been done to support primary care to date. Policymakers need to bear witness to the quiet heroism of primary care – a workforce that suffered five times more COVID-related deaths than any other medical discipline.”

Many primary care clinicians are hoping the federal government steps in to change policy and bolster primary care and the healthcare workforce. The government can start with how primary care is paid, respondents agreed.

About 46 percent of clinicians responding to the survey said policy should change how primary care is financed so that the field is not in direct competition with specialty care. The same percentage of clinicians also said policy to change how primary care is paid by shifting reimbursement from fee-for-service.

Over half of clinicians (56 percent) also agreed that policy should protect primary care as a common good and make it available to all regardless of ability to pay.

Alternative payment models helped providers during the COVID-19 pandemic, research from healthcare improvement company Premier, Inc. showed. Their study found that organizations in alternative payment models were more likely to leverage care management, remote patient monitoring, and population health data during the pandemic compared to organizations that relied on fee-for-service revenue.

“Many of the practices, especially in primary care, have been extremely cash strapped and have been struggling for many years,” Sanjay Doddamani, MD, told RevCycleIntelligence last year.

This has been a big moment for us to act in accelerating our performance-based incentive payments to our primary care doctors. We moved up our schedule of payments so that they could at least have some continued flow of funds,” added the chief physician executive and COO at Southwestern Health Resources, a clinically integrated network based in Texas.

Value-based contracting could be the key to primary care’s existence in the future, that is, if practices get on board with alternative payment models. A majority of respondents to the latest Value-Based Care Assessment from Insights said over 75 percent of their organization’s revenue is from fee-for-service contracts. This was especially true for respondents working in physician practices, of which 64 percent relied almost entirely on fee-for-service payments.

Vaccination shortfall making it harder to fully staff hospitals

https://mailchi.mp/ef14a7cfd8ed/the-weekly-gist-august-6-2021?e=d1e747d2d8

Your Messages of Support | Emerson Hospital

With vaccine mandates on the rise among healthcare organizations, including many of the health systems we work with, we’ve begun to hear a new argument in favor of getting staff vaccinated—one that weighs against the worry that mandates will drive scarce clinical workers away.

With staffing already stretched, some systems have been concerned that implementing mandates could worsen shortages and force an increase in the use of costly agency labor. But, some executives are now telling us, so could not vaccinating staff. As the highly contagious Delta variant continues to sweep through unvaccinated populations, clinical workers who haven’t gotten their shots are especially susceptible to contracting the virus.

That’s driven a sharp increase in unvaccinated nurses and other workers calling out sick with COVID symptoms, which has made a difficult staffing situation even worse.

Some of the high-profile reports of hospitals running out of beds in the face of the Delta variant are actually driven by running out of staff to keep those beds in use—making it even more critical to ensure that frontline workers are protected against the virus.

As a growing number of hospitals and other care facilities mandate that their workers get vaccinated, we’d hope this unwelcome pressure on an already stretched workforce begins to wane.