David Koschitzki, CFO at MJHS Health System recently connected with HealthLeaders to discuss staffing costs and organizational investments.
Organizations are under tremendous pressure to maintain their financial well-being and the health of the people they care for, but factors including the repercussions of the pandemic, inflation, labor shortages, skyrocketing expenses, and a cessation of government relief funds have made an already laborious task practically herculean.
One healthcare provider that has seen its fair share of challenges over the last three years is MJHS Health System—a 115-year-old health system based in New York City specializing in senior, hospice, and palliative care. The organization's chief financial officer, David Koschitzki, is kept awake at night by several concerns, but the main one is keeping expenses down without making cuts in valuable areas.
Koschitzki recently connected with HealthLeaders to discuss staffing costs and organizational investments.
HealthLeaders: What's on your mind most these days?
David Koschitzki: As the chief financial officer, I have full responsibility for ensuring that we are making sound business decisions, entering into sound business partnerships, keeping an eye on the bottom line at all times, and making sure that we are staying ahead as best as we can of what is going on out there. Seeing what's coming and trying to adapt and get ready to prepare ourselves for upcoming challenges—and the challenges have been many.
Lots of things keep me up at night. I'm most concerned about managing costs without cutting programs and services. The rising costs associated with being a not-for-profit healthcare organization in one of the most expensive U.S. cities are challenging. Reimbursement levels, whether from Medicare or Medicaid, aren't enough to offset rising costs, whether it's due to inflation costs, salary requirements, cost of living realities, supply chain issues, or simple operational costs associated with being in one of the world's most expensive cities.
Another challenge is the shortage of staffing and the shortages of nursing staff at all levels, not just registered nurses, but also licensed practical nurses and even certified nursing aides. Obviously, that causes costs to rise as plans and different providers compete with one another for a limited staff. That's what's been the most significant challenge over the last couple of years, particularly right now.
HL: What solutions are in place to deal with the labor challenge?
Koschitzki: We try to be creative, and innovative in ways to not only attract new staff but even to retain the existing staff. A lot of our staff have been here for a long time. It's been a good place to work for a long time. And so, a lot of the current staff … are coming towards the end of their work careers. We are doing what we can … to attract new staff, by being more flexible when it comes to working from home or hybrid models of work. But we are also trying to incentivize and retain through enhanced pay through bonus programs, and other employee benefits that are geared towards employee satisfaction.
We also offer employee recognition programs that focus on ensuring that employees are feeling sustained and fulfilled. It's important for them to have an outlet for stress and anxiety, so there are other initiatives that speak to the personnel side of their job responsibilities. In the coming year, we'll be implementing real-time wellness checkups.
HL: As CFO, where would you like to see the organization make greater financial investments?
Koschitzki: We've been investing in a number of different initiatives. Staffing is primarily the largest investment that we've been making. As I said, we have to address compensation issues, and we must address the competitiveness of the industry. So, we've enhanced staff salaries as an investment in our staff, and we've enhanced programs to attract staff.
Digital technology is something that's important to us as well. Being a not-for-profit health system, we have boards of directors who have a lot of interest in what we do and we're mission-driven. Technology is important to them, and they've made sure it's a priority with management and leadership to ensure that we are investing properly in that, so we can advance and prepare for the future.
Currently, New York is 48th or 49th, in terms of hospice utilization by state. Although our hospice program is one of the largest in the area, there's tremendous room for growth and so we're particularly focused on more relationship-building and educating everyone from physicians and hospital groups to community organizations.
Amanda Schiavo is the Finance Editor for HealthLeaders.
Maintaining costs without cutting any programs or services is CFO David Koschitzki's chief concern.
Staffing and digital technology are key investments for MJHS Health System.