Category Archives: Labor Shortages

America’s newest doctors fuel efforts to unionize

Posted on by • Posted in Health System, Hospital, Hospital Industry, Labor Shortages, Labor Union, Market Consolidation, Market Power, Physician Burnout, Physician Compensation, Physician Shortage, Physician Workforce, Physician's Labor Union • Leave a comment

https://www.axios.com/2024/04/15/doctors-union-gen-z-millennial

A new generation of doctors struggling with ever-increasing workloads and crushing student debt is helping drive unionization efforts in a profession that historically hasn’t organized.

Why it matters: 

Physicians in training, like their peers in other industries, increasingly see unions as a way to boost their pay and protect themselves against grueling working conditions as they launch their careers.

What they’re saying: 

“We deserve an increased salary to be able to afford to live in one of the most expensive areas in the United States,” said Ali Duffens, a third-year internal medicine resident at Kaiser Permanente’s San Francisco Medical Center.

  • She’s among the 400 residents at Kaiser’s Northern California system filing to unionize earlier this month.
  • Duffens earns about $82,000 per year, while paying $3,000 a month for rent and facing $350,000 in medical school loans.

The big picture: 

The Kaiser residents are part of a growing number of younger peers in medicine who have been unionizing in recent years.

  • The number of medical residents in unions has about doubled to more than 32,000 in three years, per CalMatters.
  • In the last year, residents at Montefiore Medical Center, Stanford Health Care, George Washington University and the University of Pennsylvania voted to unionize, per WBUR.
  • “The cost of day care … in a month is about half of my salary in total, and the cost of a nanny is essentially the entirety of my salary,” Leah Rethy, an internal medicine resident with Penn Medicine, told NPR last year.
  • Residents can work as much as 80 hours per week while earning far less than their older colleagues.

Yes, but: Just about 6%-7% of physicians are estimated to be in unions.

  • Historically, doctors have thought they could just suck up the long hours and relatively low pay in training as part of the tradition of medicine, said Robert Wachter, chair of the department of medicine at the University of California, San Francisco.
  • “For a new generation, they look at it and say, ‘That’s crazy. I can’t believe you did that. I want to work hard, but I also want a life and I want a family, and I want a reasonable income,'” he said.

And it’s not just younger doctors. 

Those more established in their careers are also unionizing as they see the industry changing in ways that they think undermine their profession.

  • In recent months, attending physicians at Salem Hospital, owned by Mass General Brigham, and a Cedars Sinai-owned anesthesiology practice filed to unionize.
  • About 600 doctors at Allina Health in Minnesota and Wisconsin last fall agreed to form what appears to be the largest union of private sector physicians.

Zoom in: 

The corporatization of American medicine is seen as a key driver. More than half of all U.S. doctors now work for a health system or large medical group rather than running an independent practice.

  • This shift has brought heavier workloads and less control over how they care for patients, said John August, director of health care labor relations in the Scheinman Institute on Conflict Resolution at the ILR School at Cornell.
  • That could mean demands to see more patients, limiting the time that doctors can spend with them.
  • “What you will hear from them 100% of the time in every conversation they have is they feel that they have lost control over the patient-physician relationship. I mean, every single physician says that now,” August said.

The other side: 

Health systems and large practices generally say they value their doctors and the relationships they hold with patients.

  • Hospitals have also struggled with pandemic-era financial shortfalls, including increasing labor costs.

The bottom line: 

While this is a labor issue, it ultimately trickles down to quality and safety for patients, said Rachel Flores, organizing director of the Union of American Physicians and Dentists.

  • “Patients should care because that’s less time to address their issues,” she said. “Patients should care because there’s not enough staff to support the physician.”

Healthcare’s trap of overqualified workers

Posted on by • Posted in Employee Compensation, Employee Qualifications, Health System, Hospital, Hospital Industry, Job Market, Job Requirements, Labor Shortages, Labor Spend Management, Operating Expenses, Recruiting, Talent Acquisition Strategy, Talent Competition, Talent Management, Talent Pipelines • Leave a comment
https://www.beckershospitalreview.com/workforce/healthcares-trap-of-overqualified-workers.html?origin=CFOE&utm_source=CFOE&utm_medium=email&utm_content=newsletter&oly_enc_id=2893H2397267F7G

The post-pandemic labor force has 1.5 million fewer individuals with some post-secondary education short of a bachelor’s degree. This shortfall is hitting healthcare hardest, affecting wages and qualification levels among jobholders. 

Job vacancies requiring a post-secondary certificate or associate degree, particularly in healthcare, remain high. The mismatch between the supply of workers with this education level and the ongoing demand for them is leading to increased wages and greater reliance on more educated workers, according to a December 2023 bulletin from the Federal Reserve Bank of Kansas City. 

Five takeaways from the bank’s report: 

1. Before the pandemic, job openings across educational groups moved together and subsequently peaked together in mid-2022. Since then, while vacancies for most groups have fallen, the number of job vacancies requiring some college education remains 60% above its pre-pandemic level. 

2. Vacancies for jobs requiring some college education are concentrated in healthcare. As of August 2023, about 50% of all open jobs posted in 2023 that required an associate degree or non-degree certificate were in healthcare.  

3. As a result of the high demand, healthcare employers are turning to more educated workers to fill positions with requirements for some college education. Healthcare employment among workers with some college education has dropped by about 400,000 since 2019; healthcare employment among workers with a bachelor’s degree or more has increased by 600,000.

4. Combined, these factors can place upward pressure on healthcare wages. The supply-demand mismatch can lead employers to offer higher wages to competitively attract qualified workers. Employers turning to workers with more education, who are generally more expensive, will increase the average wage in these occupations.

5. From 2019 to 2023, overall wages for healthcare workers rose by nearly 25%, an increase the bank partially attributes to both increased wages within educational groups and composition effects. The shift in employment toward higher-educated workers accounts for an additional 2.7 percentage points of the total wage increase, for instance. 

More Americans over 65 are working — here’s why

Posted on by • Posted in Labor Force Participation Rates, Labor Market, Labor Market Participation Rate, Labor Shortages, Recruiting, Retention, Talent Imperative, Talent Management, Workforce, Workforce 65+, Workforce Participation, Workforce Shortages • Leave a comment

https://www.axios.com/2023/12/14/older-american-adults-working-wages-economy

An increasing number of Americans age 65 and older are working — and earning higher wages, per a study from the Pew Research Center out Thursday.

Why it matters: 

This is good for the economy, especially as the U.S. population ages — but whether or not it’s good for older Americans is a bit more subjective.

Zoom in: 

The share of older adults working has been steadily increasing since the late 1980s, with a detour during the pandemic as older folks retired in greater numbers. Several forces are driving the shift:

  • Older workers are increasingly likely to have a four-year degree, and typically workers with more education are more likely to be employed.
  • Technology has made many jobs less physically taxing, so older workers are more likely to take them.
  • Meanwhile, changes in the Social Security law pushed many to continue working past 65 to get their full retirement benefits.
  • At the same time, there’s been a shift away from pension plans, which typically force people out of a job at a certain age, into 401(k) style plans that are less restrictive (and less generous, critics say).

By the numbers: 

Last year, the typical 65+ worker earned $22 an hour, up from $13 (in 2022 dollars) in 1987. That’s about $3 less than the average for those age 25-64, and the number includes wages of full- and part-time workers.

Be smart: 

Before Social Security existed, older people worked — a lot. In the 1880s, about three-fourths of older men were employed, said Richard Fry, senior researcher at Pew. They also didn’t live as long.

  • Meanwhile, the 65+ age group is a fast-growing one — by 2032 all the baby boomers will be in this category, per the BLS’s projections, and their increased workforce participation is good for an economy that is struggling with long-term labor shortages.

The big picture: 

“If people are working longer because they find purpose in their jobs and want to stay engaged, that’s good for them individually,” said Nick Bunker, head of economic research at Indeed Hiring Lab.

  • It’s also good for the productive capacity of the economy, and the firms where they work. “Older folks have lots of experience and knowledge to pass down,” he said.
  • Yes, but: If there are people who want to retire, but can’t because of financial constraints, “that’s bad,” he added.

What to watch: 

The share of older adults working peaked before the pandemic — will it surpass those levels?

  • The number hasn’t bounced back as much as anticipated partly because older Americans benefited hugely from the stock market surge and real estate gains of the past few years — and didn’t need to work anymore.

Starbucks softens its union stance

Posted on by • Posted in Labor Activism, Labor Agreement, Labor Cost Structure, Labor Organizing, Labor Relations, Labor Shortages, Labor Strike, Labor Union, Labor Union Grievance • Leave a comment
https://www.axios.com/newsletters/axios-markets-0545b7bd-57c8-4181-aae8-569abdcfc91e.html?utm_source=newsletter&utm_medium=email&utm_campaign=newsletter_axiosmarkets&stream=business

Starbucks is softening its stance toward unionization after years of pushing back.

Why it matters: 

It’s a potentially huge shift for the chain and a signal of the staying power of the labor movement that surged in the wake of the pandemic.

  • “They know this isn’t going away,” said Nick Setyan, an equity analyst at Wedbush who covers Starbucks. He called the company’s new posture “capitulation.”
  • Setyan said recent worker walkouts were a turning point. Also, at least five more stores this month voted to unionize.

Zoom out: 

Union organizing efforts have been a public relations headache for Starbucks since at least 2021 when a store in Buffalo became the first to vote for a union. Meanwhile, pressure from labor regulators isn’t slowing.

Zoom in: 

Starbucks’ strategy shift began in March when Laxman Narasimhan took the CEO reins from founder Howard Schultz, who had repeatedly clashed with workers over unionizing. The new CEO spoke of the need to care for customer-facing staff, per Reuters.

  • It’s accelerated over the past week — last Friday, Starbucks vice president Sara Kelly sent a letter to Workers United (the union that reps workers), saying the company wanted to restart bargaining.
  • The union has yet to bargain a contract. Starbucks now says it wants an agreement by next year.
  • On Wednesday, the company released an audit on its labor relations practices that was commissioned by Starbucks — after a shareholder vote forced its hand — and conducted by a former management-side lawyer.
  • Though the report asserted Starbucks didn’t have an “anti-union playbook,” it did find the company was unprepared to deal with its unionizing workforce and acknowledged that store managers made mistakes in how they handled the situation.
  • The report offers recommendations for improvement — including better training. Change starts with “tone from the top,” the audit says, suggesting that the company should reach agreements with the union “expeditiously.”

What happened: 

Starbucks initially believed it could fend off unionization by messaging about best-in-class wages and benefits, Setyan said, noting that it’s true the chain offers better compensation than competitors.

  • “Internally, they felt kind of aggrieved,” he said, that workers who management perceived as well-compensated would want to organize.
  • For a while it seemed like the messaging campaign was working, but the Red Cup Rebellion walkout last month and a flurry of new union votes changed minds.
  • Starbucks has historically been very sensitive to public relations — and it became clear pushing back isn’t great for its image, Setyan said.

The other side: 

Union representatives are skeptical of Starbucks’ new position.

  • “We are hopeful your letter is indeed the beginning of a sincere effort, and not a publicity move in the face of pressure from partners, Wall Street, shareholders, and others,” Workers United president Lynne Fox, said in a letter to Kelly last week.

What to watch: 

If Starbucks’ change in tone is a sign that the company will finally come to terms with these workers, and agree to a contract, or just a shift in its public stance while it continues efforts to avoid a deal.

2023 State of Healthcare Performance Improvement Report: Signs of Stabilization Emerge

Posted on by • Posted in Denial, Denial Management, Denial Rates, Financial Distress, Financial Instability, Financial Performance, Financial Pressure, Financial Stewardship, Financial Strength, Health System, Hospital, Hospital Industry, Labor Cost Structure, Labor Shortages, Labor Spend Management, Medicare Advantage, Operating Expense Reduction, Operating Expenses, Operating Income, Operating Margin, Operating Metrics, Operating Performance, Operating Revenue, Physician, Recruiting, Retention, Rev Cycle Management, Revenue Cycle, Talent Imperative, Talent Management • Leave a comment
https://www.kaufmanhall.com/insights/research-report/2023-state-healthcare-performance-improvement-report?utm_source=mkto&utm_campaign=performance-improvement-report&utm_medium=em&utm_term=231024&mkt_tok=NjU0LUNOWS0yMjQAAAGPAPUh710iwb064xaRlzY2WARShgaprdNgJVvWDHv-EME-8h09yOjwqrm4xTcKRudO8J4tgkmKnc5lTtM08o8H7-ncGEvE4iTRowqwBdti-kuW

Executive Summary

Hospitals and health systems are seeing some signs of stabilization in 2023 following an extremely difficult year in 2022. Workforce-related challenges persist, however, keeping costs high and contributing to issues with patient access to care. The percentage of respondents who report that they have run at less than full capacity at some time over the past year because of staffing shortages, for example, remains at 66%, unchanged from last year’s State of Healthcare Performance Improvement report. A solid majority of respondents (63%) are struggling to meet demand within their physician enterprise, with patient concerns or complaints about access to physician clinics increasing at approximately one-third (32%) of respondent organizations.

Most organizations are pursuing multiple strategies to recruit and retain staff. They recognize, however, that this is an issue that will take years to resolve—especially with respect to nursing staff—as an older generation of talent moves toward retirement and current educational pipelines fail to generate an adequate flow of new talent. One bright spot is utilization of contract labor, which is decreasing at almost two-thirds (60%) of respondent organizations.

Many of the organizations we interviewed have recovered from a year of negative or breakeven operating margins. But most foresee a slow climb back to the 3% to 4% operating margins that help ensure long-term sustainability, with adequate resources to make needed investments for the future. Difficulties with financial performance are reflected in the relatively high percentage of respondents (24%) who report that their organization has faced challenges with respect to debt covenants over the past year, and the even higher percentage (34%) who foresee challenges over the coming year. Interviews confirmed that some of these challenges were “near misses,” not an actual breach of covenants, but hitting key metrics such as days cash on hand and debt service coverage ratios remains a concern.

As in last year’s survey, an increased rate of claims denials has had the most significant impact on revenue cycle over the past year. Interviewees confirm that this is an issue across health plans, but it seems particularly acute in markets with a higher penetration of Medicare Advantage plans. A significant percentage of respondents also report a lower percentage of commercially insured patients (52%), an increase in bad debt and uncompensated care (50%), and a higher percentage of Medicaid patients (47%).

Supply chain issues are concentrated largely in distribution delays and raw product and sourcing availability. These issues are sometimes connected when difficulties sourcing raw materials result in distribution delays. The most common measures organizations are taking to mitigate these issues are defining approved vendor product substitutes (82%) and increasing inventory levels (57%). Also, as care delivery continues to migrate to outpatient settings, organizations are working to standardize supplies across their non-acute settings and align acute and non-acute ordering to the extent possible to secure volume discounts.

Survey Highlights

98% of respondents are pursuing one or more recruitment and retention strategies
90% have raised starting salaries or the minimum wage
73% report an increased rate of claims denials
71% are encountering distribution delays in their supply chain
70% are boarding patients in the emergency department or post-anesthesia care unit because of a lack of staffing or bed capacity
66% report that staffing shortages have required their organization to run at less than full capacity at some time over the past year
63% are struggling to meet demand for patient access to their physician enterprise
60% see decreasing utilization of contract labor at their organization
44% report that inpatient volumes remain below pre-pandemic levels
32% say that patients concerns or complaints about access to their physician enterprise are increasing
24% have encountered debt covenant challenges during the past 12 months
None of our respondents believe that their organization has fully optimized its use of the automation technologies in which it has already invested

Thousands of US health care workers go on strike in multiple states over wages and staff shortages

Posted on by • Posted in Health System, Hospital, Hospital Industry, Kaiser Permanente, Labor Organizing, Labor Shortages, Labor Spend Management, Labor Strike, Labor Union, Labor Union Grievance, Net Income, Operating Expenses, Operating Income, Operating Margin, Operating Metrics, Operating Performance, Operating Revenue • Leave a comment

https://apnews.com/article/kaiser-health-care-workers-strike-b8b40ce8c082c0b8c4f1c0fb7ec38741

Picketing began Wednesday at Kaiser Permanente hospitals as some 75,000 health care workers went on strike in Virginia, California and three other states over wages and staffing shortages, marking the latest major labor unrest in the United States.

Kaiser Permanente is one of the country’s larger insurers and health care system operators, with 39 hospitals nationwide. The nonprofit company, based in Oakland, California, provides health coverage for nearly 13 million people, sending customers to clinics and hospitals it runs or contracts with to provide care.

The Coalition of Kaiser Permanente Unions, representing about 85,000 of the health system’s employees nationally, approved a strike for three days in California, Colorado, Oregon and Washington, and for one day in Virginia and Washington, D.C.

A cheer went up from union members outside Kaiser Permanente Los Angeles Medical Center when the strike deadline arrived before dawn.

The strikers include licensed vocational nurses, home health aides and ultrasound sonographers, as well as technicians in radiology, X-ray, surgical, pharmacy and emergency departments.

Doctors are not participating, and Kaiser says its hospitals, including emergency rooms, will remain open during the picketing. The company said it was bringing in thousands of temporary workers to fill gaps during the strike. But the strike could lead to delays in getting appointments and non-urgent procedures being rescheduled.

It comes amid unprecedented worker organizing — from strike authorizations to work stoppages — within multiple industries this year, including, transportation, entertainment and hospitality.

Wednesday’s strike is the latest one for the health care industry this year as it continues to confront burnout with the heavy workloads — problems that were exacerbated greatly by the pandemic.

Unions representing Kaiser workers in August asked for a $25 hourly minimum wage, as well as increases of 7% each year in the first two years and 6.25% each year in the two years afterward.

They say understaffing is boosting the hospital system’s profits but hurting patients, and executives have been bargaining in bad faith during negotiations.

“They’re not listening to the frontline health care workers,” said Mikki Fletchall, a licensed vocational nurse based in a Kaiser medical office in Camarillo, California. “We’re striking because of our patients. We don’t want to have to do it, but we will do it.”

Kaiser has proposed minimum hourly wages of between $21 and $23 next year depending on the location.

Since 2022, the hospital system has hired 51,000 workers and has plans to add 10,000 more people by the end of the month.

Kaiser Permanente reported $2.1 billion in net income for this year’s second quarter on more than $25 billion in operating revenue. But the company said it still was dealing with cost headwinds and challenges from inflation and labor shortages.

Kaiser executive Michelle Gaskill-Hames defended the company and said its practices, compensation and retention are better than its competitors, even as the entire sector faces the same challenges.

“Our focus, for the dollars that we bring in, are to keep them invested in value-based care,” said Gaskill-Hames, president of Kaiser Foundation Health Plan and Hospitals of Southern California and Hawaii.

She added that Kaiser only faces 7% turnover compared to the industry standard of 21%, despite the effects of the pandemic.

“I think coming out of the pandemic, health care workers have been completely burned out,” she said. “The trauma that was felt caring for so many COVID patients, and patients that died, was just difficult.”

The workers’ last contract was negotiated in 2019, before the pandemic.

Hospitals generally have struggled in recent years with high labor costs, staffing shortages and rising levels of uncompensated care, according to Rick Gundling, a senior vice president with the Healthcare Financial Management Association, a nonprofit that works with health care finance executives.

Most of their revenue is fixed, coming from government-funded programs like Medicare and Medicaid, Gundling noted. He said that means revenue growth is “only possible by increasing volumes, which is difficult even under the best of circumstances.”

Workers calling for higher wages, better working conditions and job security, especially since the end of the pandemic, have been increasingly willing to walk out on the job as employers face a greater need for workers.

The California legislature has sent Democratic Gov. Gavin Newsom a bill that would increase the minimum wage for the state’s 455,000 health care workers to $25 per hour over the next decade. The governor has until Oct. 14 to decide whether to sign or veto it.

The UAW Strike: What Healthcare Provider Organizations Should Watch

Posted on by • Posted in Consumerism, Financial Stewardship, Financial Strength, Financial Viability, Financially Distressed, Future, Future State, Health System, Hospital, Hospital Industry, Job Security, Labor Relations, Labor Shortages, Labor Spend Management, Labor Strike, Market Trends, Market Uncertainty, Scrutiny, Systemness, Uncertainty, Vulnerable • Leave a comment
The Keckley Report

Politicians, economists, auto industry analysts and main street business owners are closely watching the UAW strike that began at midnight last Thursday. Healthcare should also pay attention, especially hospitals. medical groups and facility operators where workforce issues are mounting.

Auto manufacturing accounts for 3% of America’s GDP and employs 2.2 million including 923,000 in frontline production. It’s high-profile sector industry in the U.S. with its most prominent operators aka “the Big Three” operating globally. Some stats:

  • The US automakers sold an estimated 13.75 million new and 36.2 million used vehicles in 2022.
  • The total value of the US car and automobile manufacturing market is $104.1 billion in 2023:
  • 9.2 million US vehicles were produced in 2021–a 4.5% increase from 2020 and 11.8% of the global total ranking only behind China in total vehicle production.
  • As of 2020, 91.5% of households report having access to at least one vehicle.
  • There were 290.8 million registered vehicles in the United States in 2022—21% of the global market.
  • Americans spend $698 billion annually on the combination of automobile loans and insurance.

By comparison, the healthcare services industry in the U.S.—those that operate facilities and services serving patients—employs 9 times more workers, is 29 times bigger ($104 Billion vs. $2.99 trillion/65% of total spend) and 6 times more integral in the overall economy (3% vs. 18.3% of GDP).  

Surprisingly, average hourly wages are similar ($31.07 in auto manufacturing vs. $33.12 in healthcare per BLS) though the range is wider in healthcare since it encompasses licensed professionals to unskilled support roles. There are other similarities:

  • Each industry enjoys ubiquitous presence in American household’ discretionary. spending.
  • Each faces workforce issues focused on pay parity and job security.
  • Each is threatened by unwelcome competitors, disruptive technologies and shifting demand complicating growth strategies.
  • Each is dependent on capital to remain competitive.
  • And each faces heightened media scrutiny and vulnerability to misinformation/disinformation as special interests seek redress or non-traditional competitors seek advantage.

Ironically, the genesis of the UAW dispute is not about wages; it is about job security as electric-powered vehicles that require fewer parts and fewer laborers become the mainstay of the sector. CEO compensation and the corporate profits of the Big Three are talking points used by union leaders to galvanize sympathizer antipathy of “corporate greed” and unfair treatment of frontline workers.

But the real issue is uncertainty about the future: will auto workers have jobs and health benefits in their new normal?

In healthcare services sectors—hospitals, medical groups, post-acute care facilities, home-care et al—the scenario is similar: workers face an uncertain future but significantly more complicated. Corporate greed, CEO compensation and workforce discontent are popular targets in healthcare services media coverage but the prominence of not-for-profit organizations in healthcare services obfuscates direct comparisons to for-profit organizations which represents less than a third of the services economy. For example, CEO compensation in NFPs—a prominent target of worker attention—is accounted differently for CEOs in investor-owned operations in which stock ownership is not treated as income until in options are exercised or shares sold. Annual 990 filings by NFPs tell an incomplete story nonetheless fodder for misinformation.

The competitive landscape and regulatory scrutiny for healthcare services are also more complicated for healthcare services. Unlike auto manufacturing where electric vehicles are forcing incumbents to change, there’s no consensus about what the new normal in U.S. healthcare services will be nor a meaningful industry-wide effort to define it. Each sector is defining its own “future state” based on questionable assumptions about competitors, demand, affordability, workforce requirements and more. Imagine an environmental scan in automakers strategy that’s mute on Tesla, or mass transit, Zoom, pandemic lock-downs or energy costs?

While the outlook for U.S. automakers is guardedly favorable, per Moody’s and Fitch, for not-for-profit health services operators it’s “unsustainable” and “deteriorating.”

Nonetheless, the parallels between the current state of worker sentiment in the U.S. auto manufacturing and healthcare services sectors are instructive. Auto and healthcare workers want job security and higher pay, believing their company executives and boards but corporate profit above their interests and all else. And polls suggest the public’s increasingly sympathetic to worker issues and strikes like the UAW more frequent.

Ultimately, the UAW dispute with the Big Three will be settled. Ultimately, both sides will make concessions. Ultimately, the automakers will pass on their concession costs to their customers while continuing their transitions to electric vehicles.

In health services, operators are unable to pass thru concession costs due to reimbursement constraints that, along with supply chain cost inflation, wipe out earnings and heighten labor tension.  

So, the immediate imperatives for healthcare services organizations seem clear as labor issues mount and economics erode:

  • Educate workers—all workers—is a priority. That includes industry trends and issues in sectors outside the organization’s current focus.
  • Define the future. In healthcare services, innovators will leverage technology and data to re-define including how health is defined, where it’s delivered and by whom. Investments in future-state scenario planning is urgently needed.
  • Address issues head-on: Forthrightness about issues like access, prices, executive compensation, affordability and more is essential to trustworthiness.  

Stay tuned to the UAW strike and consider fresh approaches to labor issues. It’s not a matter of if, but when.

PS: I drive an electric car—my step into the auto industry future state. It took me 9 hours last Thursday to drive 275 miles to my son’s wedding because the infrastructure to support timely battery charges in route was non-existent. Ironically, after one of three self-charges for which I paid more than equivalent gas, I was prompted to “add a tip”. So, the transition to electric vehicles seems certain, but it will be bumpy and workers will be impacted.

The future state for healthcare is equally frought with inadequate charging stations aka “systemness” but it’s inevitable those issues will be settled. And worker job security and labor costs will be significantly impacted in the process.

Is there a silver lining for the systems who had the highest contract labor use?

Posted on by • Posted in Cost Management, Cost Reduction, Cost Structure, Cost-Effective, Flexibility, Health System, Hospital, Hospital Industry, Labor Cost Structure, Labor Shortages, Labor Spend Management, Labor Temporary, Nurse Agency Staffing, Nurse Travelers, Nurses Compensation, Silver Lining • Leave a comment

https://mailchi.mp/d0e838f6648b/the-weekly-gist-september-8-2023?e=d1e747d2d8

Across the hospital industry, heavy reliance on contract labor in 2021 and 2022 caused a significant challenge for profitability.

However, a chief financial officer recently posited that his system’s large contract labor load has had unexpected benefits.

“Other hospitals [in our market] thought we were crazy to keep staffing with high contract rates until recently,” he shared. “But by keeping the agency nurses around a little longer, we were able to avert raising base salaries quite as much, and are in a better place today now that the labor market has softened.” It’s a story we’ve heard several times now.

While market rates for nursing and other clinical labor have undoubtedly been rebased, salary increases are sticky—it’s hard to adjust wages downward when the labor market loosens. 

Systems who were able to avert large wage increases by increasing bonuses and other non-salary benefits, or forestalled permanent hiring at higher salaries by extending contract labor, now find themselves with more flexibility and potentially lower staffing costs in the long-term.

UPMC adds regional option to in-house travel program

Posted on by • Posted in Health System, Hospital, Hospital Industry, Labor Shortages, Labor Spend Management, Nurse Agency Staffing, Nurse Retention, Nurse Staffing, Nurse Travelers, Nurses Compensation, Nurses Shortage, Retention, Talent Management • Leave a comment
https://www.beckershospitalreview.com/workforce/upmc-adds-regional-option-to-in-house-travel-program.html?origin=BHRE&utm_source=BHRE&utm_medium=email&utm_content=newsletter&oly_enc_id=2893H2397267F7G

More than a year after launching an in-house travel staffing agency, UPMC is adding a new regional approach to the effort.

Maribeth McLaughlin, MPM, BSN, RN, chief nursing executive for the Pittsburgh-based health system, told Becker’s the approach provides a new option for nurses and surgical technologists who desire to travel. 

“Our overall travel program, when you travel for us, you travel across our hospitals in New York, Maryland and Pennsylvania,” she said. “And now we are launching a regional travel strategy where some staff can choose to travel only within certain regions.”

UPMC initially announced in December 2021 that it had created UPMC Travel Staffing, a new in-house travel staffing agency to address a nursing shortage and to attract and retain workers. 

Through the agency, nurses and surgical technologists earn $85 an hour and $63 an hour, respectively, in addition to a $2,880 stipend at the beginning of each six-week assignment.

Ms. McLaughlin said the rate is lower — about $60 an hour — for those who opt for the regional approach.

As of June 1, UPMC has hired more than 700 staff into the in-house travel staffing agency, with 60 percent of those workers being external hires, according to Ms. McLaughlin. And there have been fewer workers leaving UPMC to go to other travel agencies. 

“One of my goals since I’ve taken this role is to really look at building in as many flexible programs as I could for staff,” said Ms. McLaughlin, who has served in her current role since August 2022. “I think as we came out of the pandemic, it’s clear to me that work-life harmony means something different to staff today than it maybe meant when I was a young staff nurse years ago, and that we need to have as much flexibility and as many different programs as we can.”

She said UPMC Travel Staffing has delivered this flexibility and allowed the health system to cancel about 90 contracts with external travel agencies. Additionally, some external travelers have now moved into UPMC’s in-house agency. Ms. McLaughlin expects more to join the in-house agency now that UPMC has launched the regional approach. 

“We’re launching a win-back program where we’re going out and trying to see some of the people who we know we lost and see if they’re interested in coming back closer to home and traveling closer to home,” she explained.

Still, she acknowledged some of the challenges along the way.

“Our IT department built us an app to be able to manage all of this because, as you can imagine, we have external travel, internal travelers, core staff and at times it could get a little confusing,” said Ms. McLaughlin. “So we’ve been able to build that to be able to figure out the best ways to assign the staff where the greatest needs are.”

Another challenge she noted is that shifts for workers from external travel agencies are often 12 weeks, while shifts with UPMC Travel Staffing are six weeks. She said this is a purposeful move because those in UPMC Travel Staffing receive benefits and are considered UPMC employees, rather than receiving an hourly rate.

“Overall, it’s been a really successful program for us because it’s allowed us to look at things in a different way,” said Ms. McLaughlin. “It’s a central function. It’s not something we did and farmed out to every hospital to administer themselves. We did it as a system and as a core, which I also think is important.”

Now, she said she’s excited about the new regional approach and the opportunities it presents for recruiting and retention. 

“We’re growing our own students, we’re bringing in all these students, and we’re not saying, ‘You have to just work here.’ We’re saying, ‘You can work for us at UPMC, and here are all the options. You can even be a traveler with us,'” she said.