Hospitals are feeling an enduring consequence of experienced employees’ early retirements and resignations: collective knowledge loss.
“Even when missing people can be replaced, missing knowledge cannot,” Ed Yong wrote for The Atlantic May 18.
Beyond hospitals’ challenges in recruiting and retaining employees are the stubborn and sometimes subtle problems resulting from decreasing median tenure within their organizations. The ripple effects of losing older, seasoned employees to resignations or early retirements can be harder to quantify, but are nonetheless felt by colleagues who stay, newcomers to the organization, and patients and their families.
Team tenure is a significant determinant to the cost and quality of hospital care. For example, a one-year increase in the average tenure of registered nurses on a hospital unit was associated with a 1.3 percent decrease in length of stay, a 2014 study from researchers at Columbia University School of Nursing and Columbia Business School found.
“I don’t think the public really understands how great the loss of this generational knowledge is,” Kelley Cabrera, a nurse based in New York, told Mr. Yong. She described the six-week orientation for her current job, led by some people who had been in the ER for less than a year, as “shockingly short.”
“When inexperienced recruits are trained by inexperienced staff, the knowledge deficit deepens, and not just in terms of medical procedures,” Mr. Yong wrote. “The system has also lost indispensable social savvy — how to question an inappropriate decision, or recognize when you’re out of your depth — that acts as a safeguard against medical mistakes. And with established teams now ruptured by resignations, many healthcare workers no longer know — or trust — the people at their side.”
National data on average tenure in healthcare has not yet caught up to compare with pre-pandemic longevity numbers. The median years of tenure with current employers for healthcare practitioners and technical occupations was 4.7 years in 2020, according to the most recent data from the U.S. Bureau of Labor Statistics, ticking up to five years for workers in hospitals.
The benefits of lengthy tenures are felt at the front lines as well as hospitals’ most senior levels. Marc Boom, MD, CEO of Houston Methodist, told Becker’s this year the cumulative tenure of the health system’s executive team was a game changer throughout the pandemic. At the start of the pandemic, Dr. Boom had been CEO for more than eight years and at the institution for almost 22. The executive team of nine leaders, including him, collectively shared more than 150 years of tenure with Houston Methodist. The team had worked together without any changes for about seven years, when the most recent person joined.
This longevity lends itself to major systemwide decisions almost feeling instinctive due to their familiarity working together. “I had a team that was very tenured,” Dr. Boom said. “To work with people who you’ve known for a long period of time — you know the ins and outs, the strengths and weaknesses. You have almost an understood language. You can talk in five-word sentences, move on and everyone goes and does their thing. There are a lot of advantages to that.”
UPDATE: April 14, 2022: Nurses will begin striking April 25 if they are unable to reach a deal with the system by then, according to a Wednesday statement from the union. The two sides have met with a federal mediator three times, and the strike would be open-ended.
- Unionized nurses at Stanford hospitals in California voted in favor of authorizing a strike Thursday, meaning more than 4,500 nurses could walk off the job in a bid for better staffing, wages and mental health measures in new contracts.
- Some 93% of nurses represented by the Committee for Recognition of Nursing Achievement voted in favor of the work stoppage, though the union did not set a date, according to a union release. It must give the hospitals 10 days notice before going on strike.
- Nurses’ contracts expired March 31 and the union and hospital have engaged in more than 30 bargaining sessions over the past three months, including with a federal mediator, according to the union.
As the COVID-19 pandemic has worsened working conditions for nurses, some unions have made negotiating contracts a priority. Better staffing is key, along with higher wages and other benefits to help attract and retain employees amid ongoing shortages.
The California nurses’ demands in new contracts focus heavily on recruitment and retention of nursing staff “amid an industry-wide shortage and nurses being exhausted after working through the pandemic, many in short-staffed units,” the union said in the release.
They’re also asking for improved access to time off and more mental health support.
Nurses say their working conditions are becoming untenable and relying on travel staff and overtime shifts is not sustainable, according to the release.
The hospitals are taking precautionary steps to prepare for a potential strike and will resume negotiations with the union and a federal mediator Tuesday, according to a statement from Stanford.
But according to CRONA, nurses have filed significantly more assignment despite objections documents from 2020 to 2021 — forms that notify hospital supervisors of assignments nurses take despite personal objections around lacking resources, training or staff.
And a survey of CRONA nurses conducted in November 2021 founds that as many as 45% were considering quitting their jobs, according to the union.
That’s in line with other national surveys, including one from staffing firm Incredible Health released in March that found more than a third of nurses said they plan to leave their current jobs by the end of this year.
The CRONA nurses “readiness to strike demonstrates the urgency of the great professional and personal crisis they are facing and the solutions they are demanding from hospital executives,” the union said in the release.
No major strikes among healthcare workers have occurred so far this year, though several happened in 2021 and in 2020, the first year of the pandemic.
The US healthcare sector added 64K jobs in February, an increase from recent months, but the gains were concentrated in provider offices and home health companies. Hospitals and nursing facilities, which have both struggled with widespread staffing shortages, saw more anemic job growth. In particular, nursing homes have lost 15 percent of their workforce, remaining significantly understaffed even though resident occupancy rates still lag pre-pandemic levels. This week, nursing home groups pushed back against President Biden’s call for minimum staffing levels, calling them unrealistic without federal funding.
The Gist: Hospital and nursing facility workers have taken on some of the most taxing and dangerous jobs during the pandemic, caring for the sickest patients while personally risking COVID infection.
Healthcare workers are increasingly opting for safer, less intense jobs in outpatient care settings like physician offices, or are exiting direct patient care entirely. Even as the pandemic subsides, recruitment and retention of nurses and other caregivers will be of paramount importance, given rising vacancy rates and unabating staff shortages.
The annual expense of child care for an infant exceeds the annual cost of in-state tuition at a public four-year university in 34 states, according to the most recent data from the Economic Policy Institute.
At this point in the pandemic, healthcare is among the top three industries when it comes to people quitting or changing jobs. The quality and cost of child care is top of mind for healthcare decision-makers given its strength as a determining factor to push people from the U.S. labor force. Mothers continue to shoulder the majority of family caregiving responsibilities, making child care a heavier tip of the scale for healthcare, where women make up the majority of the front-line workforce (66 percent) and managers (59 percent), according to research from McKinsey.
Infant care expenses exceed college tuition in 34 states and Washington, D.C. Below is each state ranked by how much infant care costs exceed or compare to the cost of tuition at a four-year public university, along with the median family income in each state and infant care as a share of income.
Despite the gains, employment in healthcare is down by about 378,000 jobs (2.3%) from where it was in February 2020.
After a rough end to 2021 in terms of job losses, healthcare appears to be on the rebound – for now. The latest jobs report from the U.S. Bureau of Labor Statistics showed hospitals gaining jobs in January, though the industry is still below the levels seen before the COVID-19 pandemic.
In total, the healthcare sector saw a gain of 18,000 jobs last month. It lost 3,100 jobs in December; the prior month, November 2021, was the last time the sector saw job gains, when it posted a net gain of 2,100.
Hospitals made up for some, but not all, of the job losses seen during the tail end of 2021. They gained 3,400 jobs in January, after losing 5,100 jobs in December and 3,900 in November.
The last time hospitals gained jobs was in October, when 1,100 were added. Hospitals lost 8,100 jobs in September.
The biggest increase was in ambulatory healthcare services, which gained 14,700 jobs during the month. Physicians’ offices added 9,700 jobs. Nursing and residential-care facilities lost about 100 jobs in January.
Despite the gains, employment in healthcare is down by about 378,000 jobs (2.3%) from where it was in February 2020, at the dawn of the pandemic, according to BLS.
The broader U.S. economy added 467,000 jobs in January, after gaining 199,000 jobs in December, while the unemployment rate held fairly steady at about 4%.
WHAT’S THE IMPACT?
In a preview of the jobs report by economic research firm Glassdoor, researchers predicted that job losses in healthcare and leisure and hospitality would drag down overall payroll employment. Other coronavirus-sensitive sectors, such as retail and education, were also impacted, though seasonal factors helped mute job losses in those sectors.
Over the course of the pandemic, new COVID-19 cases have been somewhat predictive of job market data, but current record levels represent a situation without precedent, and there are few good comparisons, Glassdoor found. Since September 2020, each new 1,000 daily cases has been correlated with 4,000 fewer job gains, but the level of cases seen in January is unlike any other previous point in the pandemic, leading to uncertainty heading into the BLS jobs report.
The Bureau of Labor Statistics’ preliminary benchmark estimates forecast a modest downward revision in payroll employment of 166,000 for March 2021.
THE LARGER TREND
The Great Resignation hit the healthcare sector hard in November. BLS released job numbers in January showing that healthcare is among the top three industries cited in a 3% rise in the monthly “quits rate,” matching a high from September. The number of quits surged to 4.53 million for the month.
The numbers coincide with an already-strapped healthcare staffing market. Shortages and burnout among healthcare staff are a pervasive issue.
Multiple factors are contributing to labor pressures, including staff burnout stemming from the enduring pandemic and an overall shortage of qualified help, which has resulted in higher costs to hire temporary staff, as well as wage inflation.
Further, a Fitch Ratings report in November noted that lack of staff is forcing some in-patient behavioral health and senior housing operators to lower admission rates.
Beaufort (S.C.) Memorial Hospital has created a homebuyer assistance program to help staff purchase a home or refinance mortgages, with up to $10,000 in assistance.
To be eligible for the program, employees must be full time, have worked at the hospital for at least six months, attend a homebuyer education workshop and meet household income requirements, among other criteria, according to a Jan. 10 news release from the hospital.
Additionally, properties must be within a 15-mile radius of a designated Beaufort Memorial campus, be the buyer’s primary residence and have monthly mortgage payments of no more than 33 percent of monthly income.
Recipients can use the funds for down payments and closing costs, the release said.
The hospital is partnering with development financial institution CommunityWorks for the program.
“We know that homeownership provides stability, security and a means to building financial health and wealth for future generations,” Beaufort Memorial President and CEO Russell Baxley said. “We also recognize that a major obstacle can be coming up with the money needed for a down payment or closing costs. This assistance program will help our employees bridge that financial gap.”
- Companies that fail to adjust to labor shortages and satisfy the growing demands of workers will likely falter as they lose the battle for talent, BlackRock CEO Larry Fink said in a letter to CEOs.
- “No relationship has been changed more by the pandemic than the one between employers and employees,” Fink said, noting that “employees across the globe are looking for more from their employer — including more flexibility and more meaningful work.” Fink, while leading the world’s largest asset manager, has sought for a decade to influence corporate behavior through an annual CEO letter.
- “As companies rebuild themselves coming out of the pandemic, CEOs face a profoundly different paradigm than we used to,” Fink said. Companies can no longer overlook employee mental health, insist that staff work in the office five days per week and provide modest wage increases for low- and middle-income workers.
CFOs considering an increase in prices and employee wages need to balance the imperative to sustain profits with pressures from the worst inflation and labor shortages in decades.
The persistence of COVID-19 has slowed the labor market’s post-lockdown recovery and churned up company payrolls. Fink noted that in November the quits rate, or the number of workers who left their jobs as a percent of total employment, rose to 3%, a record high first breached in September.
CFOs aiming to attract and retain employees with wage increases must take into account a 7% jump in the consumer price index (CPI) during the 12 months through December — the biggest surge since 1982.
“Workers demanding more from their employers is an essential feature of effective capitalism,” Fink said. Describing “a new world of work,” he said, “companies not adjusting to this new reality and responding to workers do so at their own peril.
“Turnover drives up expenses, drives down productivity and erodes culture and corporate memory,” Fink said. BlackRock manages more than $10 trillion in assets for institutional and retail investors.
In order to satisfy workers, CEOs must look beyond pay and workplace flexibility, Fink said. The coronavirus “shone a light on issues like racial equality, childcare and mental health — and revealed the gap between generational expectations at work.”
Fink also reiterated his support for “stakeholder capitalism,” saying that “a company must create value for and be valued by its full range of stakeholders in order to deliver long-term value for its shareholders.”
“Stakeholder capitalism is not about politics. It is not a social or ideological agenda. It is not ‘woke,’” he said. “It is capitalism driven by mutually beneficial relationships between you and the employees, customers, suppliers and communities your company relies on to prosper.”
Most stakeholders expect companies to help “decarbonize” the global economy, Fink said, predicting that so-called sustainable investment will surge well beyond the $4 trillion total.
BlackRock has asked companies to set short-, medium- and long-term targets for greenhouse gas reductions which “are critical to the long-term economic interests of your shareholders,” he said.
At the same time, “divesting from entire sectors — or simply passing carbon-intensive assets from public markets to private markets — will not get the world to net zero,” Fink said, adding that “BlackRock does not pursue divestment from oil and gas companies as a policy.”
Fink’s annual letter drew fire from environmentalists.
The letter “is just another rehashing of the same vague rhetoric, without any meaningful new commitment to actually help lead the necessary transition to a climate-safe future,” Ben Cushing, the Sierra Club’s fossil-free finance campaign manager, said in a statement.
We’ve been having “year ahead” discussions with our health system members over the past few weeks, although it’s been difficult for some to carve out time for planning in the midst of the Omicron surge.
One common theme is that, from a financial perspective, 2022 is expected to be a more difficult year. For many systems, despite the trying COVID situation, the past two years have been financial record-setters. In 2020, systems benefited from a massive infusion of COVID relief funding from the government, and in 2021, they continued to enjoy enhanced reimbursement due to COVID, plus had a resurgence of volume as patients sought care that was previously postponed.
2022 looks to be a more “normal” year—meaning a return to the financial pressures of pre-pandemic times. Those include mounting price compression from payers, an accelerating shift of care from inpatient to outpatient settings, and increasing competition for patients from disruptors and others. At the same time, patient acuity will continue to rise, with patients presenting sicker and with more comorbidities. The cost of caring for those patients will escalate, as the workforce shortage drives labor costs higher and supply chain woes persist.
We’d anticipate a year or more of belt-tightening among many health systems, as they adjust to the post-pandemic environment.