Exclusive: Dealing with America’s Hospital Staffing Crisis

By Tami Kamin Meyer

“Hospitals are bleeding so much money and looking for ways to staff their needs in efficient and also more effective” ways, says Rishabh Parmar, Head of Strategy and Operations at Vivian Health. That healthcare staffing entity leverages technology to assist medical clinicians to uncover potential healthcare workforce opportunities nationwide.

In 2023, Vivian Health will expand by adding doctors to the list of medical positions they help to fill, says Parmar.

The current health report of U.S. hospitals

It’s no secret COVID-19 has been a drain on American hospitals since it became front page news in January 2020. Between the increased costs of everything from bandages to radiology equipment, complicated by supply chain issues, to the staffing challenges on all levels of a medical team, many hospitals are on life support.

Sara Hussey, the Executive Director of the Allegheny County Medical Association and the Allegheny County Medical Foundation, pinpoints what she perceives as the most pressing matters for medical facilities.

“The biggest costs hospitals are facing is their people. Revenues are being significantly impacted by the bleeding of capable healthcare staff,” says Hussey.

Still, she calls the pandemic the “driving force behind so much of this loss of physicians, nurses and other healthcare workers who feel the burden, the stretch and the mental health issues of working in a hospital,” she says.

Dr. Peter Hahn, President and CEO of the University of Michigan Health-West agreed. “Like most hospital systems, one of our biggest issues is a lot of staffing challenges.”

As recently as January 2022, hospital centers were optimistic they would soon enjoy increasing revenues as patients returned for non-emergent surgeries post-Delta, says Hahn.

Unfortunately, that wish was not granted. While COVID-19 hospitalizations were down between January and March 2022, a record number of hospital employees were stricken by the virus and missed work during that time, Hahn says.

According to Hahn, the looming forecast for physician availability is also not pleasant. “The upcoming provider (and primarily physician) shortage is coming. And, even more (concerning) is the amount of physician burnout we have been seeing even prior to COVID.”

The Complicated Road to Now

Calendar year 2021 was a welcome income-generating year for many hospitals. With COVID vaccinations finally available in January 2021, there was “a lot of hope” that hospital revenues would finally increase, Hahn says.

While calling 2021 a “pretty strong year,” he lamented that last fall’s Delta Omicron wave proved to be a punch in the proverbial gut because non-emergent surgeries were delayed once again.

Between January and March 2022, Hahn’s Grand Rapids hospital reported nearly one-sixth of its staff to be out sick with COVID. So, while there wasn’t an influx of patients as has occurred in the past, a record number of employees were unavailable to work.

According to Hahn, from January 2022 to the present, hospitals continue to experience revenue challenges. “There has been a decrease in top-line (operations),” he says.

That has translated into a 300-450 basis point decrease in his facility’s operating cash flow margin, says Hahn.

Are Doctors Quitting Quietly?

The suggestion that physicians might silently be joining in the quiet quitting phenomenon currently raging on the Internet is far from reality, says Hahn.

“Physicians have been a resilient group through COVID. We’ve experienced very little turnover in numbers of physicians through early retirements or leaving for other industries,” says Hahn, noting that his hospital’s employed medical group has “grown significantly in size over the last two years.”

For physicians, quiet quitting is a tough topic, says Hussey.

“A majority of physicians get into this profession for the greater good. Even before the pandemic, there were a lot of stressors on the medical field, especially on doctors and nurses who are struggling and feeling like a commodity,” she says.

Alexia Vernon takes a different approach. As founder and president of Step Into Your Moxie, Vernon advises healthcare organizations about how to improve employee communications to increase morale and efficiency. She says it’s too soon to know how quiet quitting may be impacting physicians.

Differing Approaches to Resolve the Same Issue

Unlike most industries, the medical field has also been impacted by the Great Resignation. According to The American Medical Association, one in five physicians intend on leaving their current practice within two years. Moreover, one in three doctors and other healthcare professionals said they plan to reduce work hours in the next 12 months.

To combat the loss of staffers while revenues are also sinking is a monumental task. Hospitals on the forefront of solving that dichotomy have implemented unique solutions.

Hahn notes his facility contracts their rates with payers years in advance. So, while inflation, staff shortages and tremendous cost increases have sorely impacted his hospital, it has implemented different solutions to ease the burden.

For example, ‘convenience hours’ at the hospital’s outpatient clinics have expanded service hours from the standard 8 a.m. to 5 p.m. model. The hospital has also already outfitted 130 of its physicians with AI technology used during doctor-patient visits. Rather than the physician typing notes during the medical consultation, directing their attention away from the patient, an AI microphone captures the conversation and presents transcribed notes to the doctor.

Another method his facility is using to increase revenue and improve patient accessibility to healthcare is founded in a digital health platform. Patients can visit with a physician using the phone app or on-site.

Erik Swanson, Senior Vice President of Data and Analytics at Kaufman Hall, cautions healthcare organizations to strategize both for today’s challenges but tomorrow’s, as well.

American hospitals and health systems are experiencing some of the worst margins they’ve experienced since the pandemic began, and “2022 continues to be on pace to be the worst year of the pandemic in terms of financial performance,” says Swanson.

Therefore, sums Swanson, “Hospitals must remain focused on addressing day-to-day challenges but they must also be focused on long-term solutions.”

He contends the financial picture for hospitals is rosy although the reality of enormous cost increases for everything clouds that hope.

“The growth in expense has outpaced the growth in revenue,” he says.

He suggests hospitals adopt strategies including:

  • Using data-driven approaches to predict expected staffing needs
  • Renegotiating contracts for contract nursing as demand for them slowly wanes
  • Manage the supply chain more effectively, including evaluating the vendors to help identify cost reduction opportunities
  • Enhance outpatient care, including ambulatory centers, to meet increasing patient demands for those services

Hahn’s hospital in Michigan has implemented partnerships with nursing schools to ensure the pipeline flows with qualified nurses. The hospital provides scholarships to nursing students if they commit to working at their facility for a specified number of years post-graduation.

Says Hahn, “That partnership is critical to our success and ability to continue service.”

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