Category Archives: Talent Management

Hospitals still spending more on PPE, labor as result of COVID-19

Posted on by • Posted in Coronavirus, Coronavirus Delta Variant, Coronavirus Mutation, Health System, Hospital, Hospital Industry, Labor Shortages, Labor Spend Management, Nurse Agency Staffing, Nurse Staffing, Nurses Shortage, Pandemic, Personal Protective Equipment (PPE), Supply Chain, Talent Competition, Talent Identification, Talent Imperative, Talent Management • Leave a comment
https://www.healthcaredive.com/news/ppe-labor-costs-expenses-pandemic-hospitals-premier/608144/?utm_source=Sailthru&utm_medium=email&utm_campaign=Issue:%202021-10-13%20Healthcare%20Dive%20%5Bissue:37318%5D&utm_term=Healthcare%20Dive

Dive Brief:

  • Hospitals across the country have spent more than $3 billion on personal protective equipment since the start of the COVID-19 pandemic, though costs have steadily declined since the worst shortages experienced during the second quarter of 2020, according to an analysis from Premier, a group purchasing organization.
  • Before the pandemic, hospitals normally spent about $7 on PPE costs per patient per day. That figure shot to $20.40 during the second quarter of last year, and during the first quarter of this year was around $12.45 per patient per day, according to Premier.
  • Hospitals are also still paying more for qualified clinical labor — roughly $24 billion more in total per year compared to before the pandemic, according to another Premier analysis out last week.

Dive Insight:

PPE was in short supply early in the pandemic, spurring bidding wars and financially straining hospitals as they suffered from the budgetary fallout of canceled elective surgeries and other lucrative services.

While supply chain challenges have since eased and costs are down since their peak, hospitals are still spending more on PPE than before the pandemic, and consumption and demand remains strong in light of the delta variant, according to the report.

Premier used a database representing 30% of U.S. hospitals across all regions from September 2019 through last month to track spending trends, looking at costs for eye protection, surgical gowns, N95 respirators, face masks, exam gloves and swabs. It then calculated total costs measuring quantities used per patient, per day, multiplied by the percent change in pricing for the quarter.

Ultimately, hospitals are still using far more N95 respirators than they were prior to the pandemic.

Demand is still up for eye protection, surgical gowns and face masks, though pricing is close to pre-pandemic levels for those items. Costs for surgical gloves and N95 respirators are still above pre-pandemic levels, according to the analysis.

While most PPE costs have steadily declined for hospitals, other expenses have not, namely labor costs.

Contract labor costs have fluctuated, though they reached record highs amid COVID-19 surges, commanding record rates from providers. And nursing shortages, especially, have been so dire that hospitals are spending more on recruiting and retaining for the positions, boosting benefits and offering steep sign on bonuses.

Clinical labor costs are up 8% on average per patient, per day compared to before the pandemic, according to the earlier Premier analysis. That translates to about $17 million in additional annual labor expenses for the average 500-bed facility.

As of last month, overtime hours are up 52% since before the pandemic. The use of agency and temporary labor is up 132% for full-time employees and 131% for part-time employees.

The most expensive labor choices for hospitals are contract labor and overtime, typically adding 50% or more to an employee’s hourly rate, according to Premier.

For that report, Premier used a database with daily data from about 250 hospitals, bi-weekly data from 650 hospitals and quarterly data for 500 hospitals from October 2019 through August to analyze workforce trends among employees in emergency departments, intensive care units or nursing areas.

‘A triple whammy’: Why hospitals are struggling financially amid the delta surge

Posted on by • Posted in Coronavirus, Coronavirus Delta Variant, Coronavirus Mutation, Deferred Healthcare, Financially Distressed, Health System, Hospital, Hospital Industry, Labor Spend Management, Net Income, Nonoperating Income, Operating Expense Reduction, Operating Expenses, Operating Income, Operating Margin, Operating Metrics, Operating Performance, Operating Revenue, Pandemic, Public Health, Public Opinion, Public Perception, Public Safety, Public Schools, Public Trust, Recruiting, Talent Identification, Talent Imperative, Talent Management, Unvaccinated, Vaccination, Vaccine, Vaccine Efficacy, Vaccine Hesitancy Rate, Vaccine Safety, Vaccine Skepticism, Vaccine Supply • Leave a comment
https://www.advisory.com/daily-briefing/2021/10/07/hospital-struggles?utm_source=public_db&utm_medium=email&utm_campaign=2021oct07&utm_content=public_headline_public_x_x_x_x&elq_cid=4778863&x_id=
Hospitals were struggling before the pandemic. Now they face financial disaster (opinion) - CNN

n addition to treating an influx of Covid-19 patients, many hospitals are struggling with what one administrator calls a “triple whammy” of financial burdens—stemming from plummeting revenue, higher labor costs, and reduced relief funds, Christopher Rowland reports for the Washington Post.

Hospitals in less-vaccinated areas face spiking labor costs

In areas with low vaccination rates, particularly in southern and rural communities, hospitals have been overwhelmed with Covid-19 patients, exacerbating labor shortages as workers burn out or leave for more lucrative positions, Rowland reports.

“The workforce issue is just dire,” Stacey Hughes, EVP of government relations and policy for the American Hospital Association (AHA), said. “The delta variant has wreaked significant havoc on hospitals and health systems.”

In Louisiana, Mary Ellen Pratt, CEO of St. James Parish Hospital, said many nurses quit due to the grueling conditions as Covid-19 cases spiked. “I didn’t have any extra money to incentivize my staff to pick up additional shifts,” she said. “This is coming out of bottom-line money I don’t have.”

Separately, Lisa Smithgall, SVP and chief nursing executive at Ballad Health, said the health system—which has 21 hospitals in eastern Tennessee and southwestern Virginia—has faced similar problems retaining staff amid Covid-19 surges.

“We knew we were at risk in our region because of where we live and because of our vaccination rate being so poor,” Smithgall said. “At one point, we were seeing four or five nurse resignations per week. They couldn’t do it again; they emotionally didn’t have it. They were so upset with our community.”

To fill in these growing gaps in their workforce, many hospitals have had to turn to costly contract workers, Rowland reports—a significant financial burden that further strains hospitals’ resources.

For example, Ballad Health went from hiring fewer than 75 contract nurses before the pandemic to 150 in August 2020 and 450 in August 2021. Moreover, according to Smithgall, contract nurses previously made double or triple what permanent staff nurses made, but now Ballad sometimes has to pay up to seven times as much for contract nurses as hospitals compete for workers to fill shifts.

Delayed elective surgeries deepen hospitals’ financial struggles

Many hospitals, including those in areas with high vaccination rates, have delayed elective surgeries, a crucial source of revenue, amid nationwide surges in Covid-19 cases, Rowland reports—further compounding financial struggles for many organizations.

On Aug. 26, Ballad Health postponed a long list of elective surgeries—including hernia repair, cardiac and interventional radiology procedures, joint replacements, and nonessential spine surgery—to preserve space in its hospitals and conserve workers. Ballad is now allowing elective surgeries again, but only for a limited number of procedures that do not require overnight stays.

Similarly, St. Charles Health System in Oregon postponed elective surgeries in August “while we responded to a surge that was significantly greater and much more sudden than the surge in 2020,” Matt Swafford, the health system’s VP and CFO, said.

According to Swafford, the health system lost $5 million a week through August and September, around $1 million of which was repayment of emergency advances on Medicare reimbursements from last year.

“I don’t think anybody saw this level of surge coming in 2021 after what we saw in 2020,” he said. “We’re just not equipped to be able to simultaneously respond to the urgent needs of the community [for more typical surgeries and care] at the same time that a third of our beds are occupied by highly infective Covid patients.”

Many hospitals likely to end the year at a deficit

Further compounding the issue, according to Moody’s Investors Service, is that the provider relief funds that previously made up 43% of operating cash flow at nonprofit and government-run hospitals in the United States are now dwindling down.

In addition, the latest portion of provider relief funds to be distributed must be based on expenses incurred by hospitals before March 31, 2021, which don’t account for months of the delta surge, Rowland reports.

Premier, a group purchasing and technology company serving more than 4,000 hospitals and health systems, analyzed payroll data of 650 hospitals and found that U.S. hospitals have spent a total of $24 billion a year during the pandemic to cover excess labor costs, primarily for overtime and contract nurses. This was an increase of 63% from October 2019 to July 2021, Rowland reports, with hospitals in the Upper Midwest and across the South seeing the largest increases.

“It’s going to leave them huge deficits that they are going to have to work out of for years to come,” Michael Alkire, Premier’s CEO, said.

Stark divide in industry outlook

Posted on by • Posted in Employee, Employee Burnout, Employee Morale, Employee Motivation, Employee Optimism, Health System, Hospital, Hospital Industry, Labor Shortages, Recruiting, Talent Identification, Talent Imperative, Talent Management • Leave a comment
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Nearly three in five U.S. health care workers are optimistic about where the industry is headed, according to a new poll released today by Morning Consult.

Why it matters: Amid increasing concerns about burnout in health care and workforce shortages, the poll of more than 900 workers between Sept. 2–8 shows there is still a lot of optimism about the health care profession even as workers deal with stressful working conditions.

A common theme among the responses was the message that “working in healthcare is hard and it’s something that should only be done if you are completely committed to it.”

  • Responses ranged from one worker who said “it’s a great career,” to another who said young people should avoid the field “unless you have a death wish.”
  • The poll also found men were more likely than women to be optimistic about the future of the health care industry.

Labor Shortage extends beyond Nursing, beyond Hospitals

Posted on by • Posted in Health System, Healthcare Industry, Healthcare Providers, Hospital, Hospital Industry, Labor Shortages, Labor Spend Management, Recruiting, Talent Identification, Talent Imperative, Talent Management, Value Proposition • Leave a comment

https://mailchi.mp/60a059924012/the-weekly-gist-september-10-2021?e=d1e747d2d8

How Could You Be Affected by the Healthcare Labor Shortage? - Right Way Medical

The typical media coverage of the healthcare workforce crisis often focuses on the acute shortage of hospital-based nurses. For instance, the hospital forced to close a unit as nurses, burned out after 18 months of extra shifts taking care of COVID patients, leave for lower-stress, more predictable jobs in outpatient facilities or doctors’ offices.

But we’re hearing about a reverse trend in recent conversations with health system leaders. Instead of outpatient settings benefiting from an influx of nursing talent, ambulatory leaders report that nurses are now leaving for hospital or travel nursing positions that offer higher salaries and large sign-on bonuses. That’s forcing non-hospital settings to reduce operating room and endoscopy capacity.

Nor are shortages just in the nursing workforce. One system executive lamented that they had to cancel several non-emergent cardiac surgeries, not due to nurse staffing challenges; rather, they were short on surgical technicians. “Surgical techs aren’t leaving because of COVID,” the executive shared, “they’re leaving because the labor market is so strong, and they can make the same money doing something entirely different.” 

For lower-wage workers in particular, the old value proposition of working for a health system, centered around good benefits, continuing education, and a long-term career path, isn’t providing the boost it used to. Workers are willing to trade those for improved work-life balance, predictability, and the perception of a “safer” workplace.

Stabilizing the healthcare workforce will ultimately require providers to rethink job design, the allocation of talent across settings of care, and the integration of technology in workflow. And it will require re-anchoring the work in the mission of serving the community.

But in the short term, many health systems will find themselves having to pay more to retain key workers, including but not limited to hospital nurses, to maintain patient access to care. 
 

A bidding war for critical nursing talent

Posted on by • Posted in Health System, Hospital, Hospital Industry, Labor Shortages, Nurse Staffing, Nurse Travelers, Nurses, Recruiting, Talent Imperative, Talent Management • Leave a comment

https://mailchi.mp/60a059924012/the-weekly-gist-september-10-2021?e=d1e747d2d8https://mailchi.mp/60a059924012/the-weekly-gist-september-10-2021?e=d1e747d2d8

As the pandemic rages on, hospitals across the country are experiencing significant labor shortages for critical clinical roles. In the graphic above, we highlight the shortage of nursing talent, perhaps the most sought-after role for which health systems are struggling to hire.

Even before the current COVID surge, many nurses reported feeling dissatisfied or feeling burned out. In a May 2021 survey, more than one in five nurses said they were considering leaving their current jobs, citing insufficient staffing, workload, and the emotional toll of the work. Many health systems are offering lucrative incentives, such as five-figure signing bonuses, to fill immediate critical care needs, and to address the growing backlog of patients returning for delayed care.

As more nurses quit or retire from their permanent positions, health systems are being forced to fill workforce gaps by luring temporary talent at much higher costs (now cresting $8K a week to fund a single travel nurse in some parts of the country). Travel nurse demand reached an all-time high in August, up almost 40 percent from the previous peak in December 2020. As they struggle to fill essential openings, hospital leaders must also focus on keeping the current nursing staff engaged—a challenge that only gets harder as staff nurses compare their salaries to those paid to the temporary colleagues working alongside them.

Providence looks to rapidly fill 17,000 jobs

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https://www.beckershospitalreview.com/workforce/providence-looks-to-rapidly-fill-17-000-jobs.html?origin=BHRSUN&utm_source=BHRSUN&utm_medium=email&utm_content=newsletter&oly_enc_id=2893H2397267F7G
Providence looks to rapidly fill 17,000 jobs

Providence is investing $220 million to fill open positions and give bonuses to current employees, the Renton, Wash.-based system announced Sept. 3. 

The health system is giving a $1,000 bonus to every caregiver who has been with the organization for at least 90 days. The bonuses, which will be given to workers up to and including the director level, will be paid in two installments in September and December. 

Providence is also making investments to rapidly fill 17,000 job openings. The system said it is offering sign-on bonuses to front-line workers with the goal of filling positions quickly and alleviating the stress and burnout many clinicians are experiencing. Current employees are eligible for referral bonuses of between $1,000 and $7,500. 

“Our caregivers are the core of who we are, and we have been committed to supporting their health and well-being throughout the pandemic,” Providence President and CEO Rod Hochman, MD, said in a news release. “Now, as we enter month 21 of our COVID-19 response, it’s even more imperative to continue to care for and bolster those who make our mission possible.” 

Private equity as an enabler of Boomer doctor retirements

Posted on by • Posted in Health System, Hospital, Hospital Industry, Physician, Physician Compensation, Physician Employment, Physician Exit Strategy, Physician Independence, Physician Practice Acquisition, Physician Practice Management, Physician Practice Valuation, Physician Retirement, Physician Staffing, Private Equity, Strategy, Talent Identification, Talent Imperative, Talent Management • Leave a comment

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

How Much Money Does a Doctor Need to Retire? — Finity Group, LLC

There’s been a lot of hand wringing over the ongoing feeding frenzy among private equity (PE) firms for physician practice acquisition, which has caused health system executives everywhere to worry about the displacement effect on physician engagement strategies (not to mention the inflationary impact on practice valuations).

While we’ve long believed that PE firms are not long-term owners of practices, instead playing a roll-up function that will ultimately end in broader aggregation by vertically-integrated insurance companies, a recent conversation with one system CEO reframed the phenomenon in a way we hadn’t thought of before. It’s all about a demographic shift, she argued.

There’s a generation of Boomer-aged doctors who followed their entrepreneurial calling and started their own practices, and are now nearing retirement age without an obvious path to exit the business. Many didn’t plan for retirement—rather than a 401(k), what they have is equity in the practice they built.

What the PE industry is doing now is basically helping those docs transition out of practice by monetizing their next ten years of income in the form of a lump-sum cash payout. You could have predicted this phenomenon decades ago.

The real question is what happens to the younger generations of doctors left behind, who have another 20 or 30 years of practice ahead of them? Will they want to work in a PE-owned (or insurer-owned) setting, or would they prefer health system employment—or something else entirely?

The answer to that question will determine the shape of physician practice for decades to come…at least until the Millennials start pondering their own retirement.

Shortage of healthcare workers amid high demand for jobs

Posted on by • Posted in Deferred Healthcare, Demand, Employee Retention, Employee Retirement, Employee Satisfaction, Employee Staffing, Employee Staffing Shortage, Labor Shortages, Nurse Staffing, Nurses Shortage, Recruiting, Talent Identification, Talent Imperative, Talent Management • Leave a comment

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.