Investing in high-quality clinicians and staff enables healthcare organizations to deliver the highest value care to their patients. But the growing physician shortage and the increasingly competitive healthcare industry are making it difficult to attract and retain qualified employees.
The Association of American Medical Colleges (AAMC) projects the physician shortage to reach 120,000 doctors by the end of 2030.
More and more nursing positions are also likely to be vacant in the near future. More than 40 percent of healthcare executives participating in a 2018 Healthcare Financial Management Association (HFMA) and Navigant survey said that the nursing shortage is getting worse year over year.
Healthcare organizations are also up against a shortage of qualified non-clinical staff. Sixty-one percent of respondents to a May 2018 MGMA poll said they faced a lack of qualified applicants for non-clinical positions in the past year.
These shortfalls are problematic as the elderly population grows and providers find themselves in need of more providers to handle increasingly complex needs. The shortages also create a competitive job market in which the power is in the hands of employees, not employers.
With staffing shortages worsening and pressure on healthcare organizations increasing, CFOs and operations executives are predicting hospital labor costs to rise. Approximately 78 percent of respondents in the HFMA-Navigant survey said their labor costs will increase in the next 12 months, and 18 percent of them predicted an increase of over five percent.
Inefficient or ineffective healthcare workforce management can significantly increase labor costs for hospitals and practices. Relying on expensive staffing agencies to temporarily fill gaps or increasing compensation for current employees to keep qualified staff from leaving can increase spending without truly solving the organization’s underlying long-term problems.
Healthcare organizations cannot allow their labor expenses, which can account for up to 60 percent of their operating budget, to increase indefinitely. Organizations are already under pressure to reduce their costs and improve efficiency as hospital operating margins decrease and reimbursement rates fall.
Controlling healthcare staffing expenses is a top focus for healthcare executives. About 44 percent of executives in the HFMA and Navigant survey ranked labor expense as their first cost-cutting opportunity.
But financial leaders are in a tough position. Ensuring optimal staffing levels in the face of healthcare professional shortages can run counter to cost-cutting priorities.
To cut labor costs while maintaining high-quality care delivery, healthcare organizations should be improving and modernizing their recruiting, scheduling, and retention methods to establish a comprehensive and sustainable healthcare workforce management strategy.
Modernizing the recruitment process
Healthcare workforce management optimization starts with the recruiting process. Ensuring talent acquisition specialists and human resource staff are equipped with strategies to attract high-quality candidates is key filling open positions.
Just filling up the HR inbox can be a problem for many organizations in a tight job market.
Almost one-third hospital C-suite executives, administrators, and human resources leaders said their organization cannot find enough candidates to fill open positions, according to a recent survey by staffing firm Leaders for Today. Even when candidates for job openings were available, a quarter of organizations said that the job-seekers did not measure up to quality standards.
Unable to identify high-quality candidates, most hospitals are waiting four to six months to fill leadership positions, and about one-third of hospitals are waiting seven to twelve months.
“When vacancies remain high, the ability to safely and profitably deliver care becomes more difficult,” the healthcare recruiters stated. “Instituting a more efficient surgery schedule, lean programs, or a quality/safety initiative becomes increasingly challenging when key positions are left unfilled or the leader is so new he/she can barely find the way to the cafeteria.”
Healthcare organizations should consider communication methods that make candidates more comfortable speaking with a recruiter. Breaking down the formality of the recruiting process can help recruiters reach out to candidates sooner and establish relationships that lead to positive results..
Embracing popular technologies, such as text messaging, can help organizations bridge the communication gap.
Text messaging helped a non-profit health system in central Indiana to get in front of candidates with the appropriate qualifications faster and navigate the competitive healthcare market, explained Scott Sendelweck, HR Digital Marketing Manager at Community Health Network.
“Using text messages, we're reaching out instantaneously,” he recently told RevCycleIntelligence.com. “I can instantly get to candidates no matter where they are as long as they have a cellular device and want to talk through text. If you were sitting at a Starbucks or picking up your laundry, no matter where you're at, we could start chatting right away about a position.”
Text messages also worked better than the traditional recruiting methods, such as phone calls and emails. Sendelweck explained that healthcare professionals would take days to weeks to return calls or emails. A nurse may have to wait until her shift is over to return a call or a physician might wait until he can access a computer to respond to an email.
However, texting allowed healthcare professionals to quickly and discreetly discuss employment opportunities with talent acquisition specialists at the health system. In some cases, applicants would respond with minutes to a text, allowing the provider to jumpstart the recruiting process.
Text messages also allowed human resources to get to know the candidate before he or she even walked through the door. Applicants perceived the messages as less formal than calls or emails, so they opened up more compared to traditional methods, Sendelweck explained.
“You can find out a lot out about a person's attitude and professionalism through a text message and the hiring managers can see that,” he said. “They can see the responses if they're short, if they're long, or if there are emojis attached to them. Hiring managers can tell if a conversation is going well within the first minute, or maybe two text messages back and forth.”
Understanding how candidates interact with others on a professional and personal level is vital as the patient experience becomes a top priority for healthcare organizations.
“It's all about the patient experience. If we went out and we did some searches for individuals, they could be great on paper. They could have all sorts of certifications, high degrees, and 3.0 to 4.0 GPAs,” he stated. “But if the attitude and the personality aren’t there, then how do you feel that patient experience is going to be when you walk in the door?”
Healthcare organizations can implement similar recruiting tools through third-party systems. Healthcare recruiting and workforce management vendors offer text messaging systems and phone call tracking systems to keep the organization compliant with employment laws while enabling recruiters to reach out and record messages with candidates.
Using analytics to optimize scheduling
Efficient scheduling is critical for healthcare organizations looking to reduce labor costs and improve care quality.
Whether an organization has a dozen employees or a hundred thousand staff members, creating workable schedules is a significant challenge. Department leaders and human resources must balance paid time off, no-shows, and personal schedules while simultaneously staffing each department appropriately for its daily needs.
Legacy healthcare workforce management and schedule platforms exacerbate scheduling problems, but upgrades to existing healthcare workforce management systems have not been a priority for hospitals and practices, explained Chip Newton, Healthcare Sector Lead of LaborWise at Deloitte Consulting, LLP.
“A lot of times, the healthcare workforce management systems were implemented 10 to 20 years ago at health systems and a couple of things have changed in the market,” Newton said.
For example, organizations that have recently undergone mergers or acquisitions may find that their legacy healthcare workforce management systems are not adequate for their new needs.
“There's been so much consolidation that they don't have a clear picture of the entire workforce,” he remarked. “They may have the data in four different databases or they may have time management in one system, scheduling and labor forecasting in another system, and they don't talk to each other.”
Without a system that can effectively view the entire workforce, healthcare organizations may not be fully utilizing existing skill sets, scheduling the appropriate combination of providers for the caseload, or notifying the staff who are eligible and willing to take on extra shifts.
Investing in a healthcare workforce management system with transactional data by department can help organizations coordinate their staff and identify opportunities for staffing improvement.
“Workforce systems are a wealth of information,” Newton said. “Transactional level detail is what you need to get out of time and scheduling systems so that you can see who is overspending in what area, what employees are contributing to that overspend, and if you made the right decision from a staffing perspective.”
Once healthcare organizations have comprehensive transaction level data, leaders can start to use analytics tools to optimize schedules.
At Mercy in St. Louis, Missouri, leveraging predictive workforce analytics resulted in $4.3 million in savings.
Before Mercy implemented an analytics solution, health IT experts needed to gather employee and scheduling information from disparate systems and implement metrics to track productivity, scheduling, and other staffing levels.
Creating a data-driven dashboard for department heads and nursing leaders to view the information and develop schedules enabled the organization to discern if an employee was able to fill a gap or whether a provider was being used to their full capacity.
“The platform required us to not only look at the data and the analytics but also how nurse leaders are able to see the information and understand how they could influence changes in schedules to improve our use of core staff and drive down the need for staffing agencies and incentives,” Mike Gillen, System Vice President of Operations, told RevCycleIntelligence.com.
“They can now easily understand, ‘Here’s a nurse that I’m not using to their full capacity, and right here is a shift tomorrow night or in the next day or two, within the same schedule period, that we could have them work.’ That really helps to make sure that we’re using our staff for what we hired them to do,” Gillen said.
Investing in a healthcare workforce management platform with transaction-level data or enabling disparate systems to communicate is key to realizing savings
Putting that information into the hands of actual schedulers and providers is key to implementing an effective workforce management system. Dashboards through analytics models or the human resources system can help those responsible for scheduling to create and modify schedules quickly and efficiently.
Reducing employee turnover to keep high-quality staff
Healthcare workforce management is just as much about retaining high-quality staff as it is about recruiting them.
Unfortunately for healthcare organizations, turnover rates for healthcare employers remain high. The total turnover rate increased from 17.7 percent in 2014 to 20.6 percent by 2017, according to a Compdata survey. And the voluntary turnover rate in hospitals also reached 14.7 percent by 2017.
High turnover rates can increase costs for healthcare organizations. For example, the costs associated with nurse turnover can be as much as $61,100 per nurse, resulting in the average hospital losing between $4.4 million and $7 million annually.
Medical practice leaders in a recent MGMA survey said employee retention was a top priority in 2018.
“As the healthcare industry continues to experience clinical and nonclinical staff shortages, retaining the best possible team to power a medical practice is more important than ever,” Halee Fischer-Wright, MD, President and CEO of MGMA, told RevCycleIntelligence.com in an emailed statement.
To reduce turnover and maximize savings, over three-quarters of medical practices are implementing formal employee appreciation programs, MGMA reported.
Employee appreciation initiatives can take many forms. Peer awards, like the Spirit of St. Joseph’s Health Award at Trinity Health, are formal methods of recognizing employees for their high-quality work.
At UI Health, shout-out cards for employees allow staff members to recognize the work of their peers.
These programs are effective for retaining valuable staff. Practices participating in the MGMA survey reported that their employee appreciation programs resulted in lower employee turnover rates across almost every role, with clinical support staff seeing the greatest reduction in turnover rate.
Addressing management and senior leadership issues can also help healthcare organizations retain high-quality staff. Poor management is the top driver of voluntary healthcare employee turnover, research firm SMD recently reported.
Senior leaders and management staff should make a visible effort to understand the needs and challenges of their employees. Leaders should be giving feedback, having career discussions, demonstrating effective communication, making employees feel valued, and gathering employee input during the decision-making process.
Town hall meetings, webinars, roundtable discussions, and emails sent directly to staff can be especially effective for engaging with employees while addressing concerns, SMD advised.
Bringing senior leaders, physicians, front desk staff, and other employees together has been the key to Geisinger Health System’s revenue cycle management success, emphasized Barbara Tapscott, CHFP, CPAM, Vice President of Revenue Management.
“We have a very engaged executive senior executive team here. We have great employees and they’re all engaged,” she shared with RevCycleIntelligence.com. “Geisinger provides professional development opportunities. We do additional education. We do executive coaching. We have certification opportunities for all to promote careers at Geisinger so that we get to retain our talent.”
Retaining talent was key to Geisinger’s 2017 MAP Award for High Performance in Revenue Cycle from the Healthcare Financial Management Association (HFMA), she pointed out.
“It was difficult when we had high turnover and had to engage recruitment to get people onboard. It takes a lot of time and diminishes results,” she said. “One of the key performance indicators where we improved that year was our turnover rate.
By enabling the existing workforce to work at the top of their skills through technology and establishing career paths, Geisinger saved money and improved quality.
“It’s all about hiring the right people with the right skills,” Tapscott stressed. “At the end of the day, it’s people with the right training that are helping us look for the root cause of a problem so that we can then engage to find a solution.”
Using a combination of employee appreciation and career development initiatives is key to boosting retention. Healthcare organizations should consider formal awards, informal thank-you notes from peers, educational opportunities, and peer coaching to show employees how their work impacts the organization and where their work could lead them specifically within the organization.
Open discussions between senior leadership, managers, and frontline staff can prevent employees from seeking employment elsewhere.
Improving each part of the healthcare workforce management puzzle will become increasingly important as the healthcare professional shortage persists and organizations face pressure to significantly reduce their costs.
Healthcare workforce management hinges on each part of the puzzle running smoothly. Recruiting, scheduling, and retention are all staples of a healthcare workforce management strategy, so optimizing each component will ensure healthcare organizations are developing a comprehensive and sustainable staffing strategy.