Henry Ford Health CFO: Balanced Strategy Needed to Combat Workforce Issue

The Detroit-based health system leader suggests a blend of solutions to tackle the labor shortage challenges in healthcare.

Amid a challenging financial climate riddled with labor shortage issues, Henry Ford Health CFO Robin Damschroder says the healthcare industry's best path forward is to "get back to basics" while continuing to innovate.

Though the COVID-19 pandemic is no longer at its peak, several challenges that were either created or exacerbated over the past two years remain for hospitals, physician groups, and payers. The labor shortages, in particular, have caused financial strain for healthcare's decision-makers. But there are strategies that CFOs can implement to alleviate the burden.

Blended strategy

Like many other health systems, Henry Ford Health's 2021 numbers veered closer to surviving rather than thriving. It posted a consolidated operating loss of $168.2 million for year end, representing an operating margin of -2.5%. Much of that loss was due to COVID-19-related costs and medical claims for the Detroit-based system, an integrated healthcare network that operates five acute-care hospitals, two psychiatric hospitals, the Henry Ford Medical Group, Health Alliance Plan of Michigan, and a network of ambulatory centers, health clinics, home-based care, and retail-oriented services.

For Damschroder, the path to thriving is all about a balanced approach.

"I've been at this for 30 years and this is unprecedented. We all have to get back to basics," Damschroder told HealthLeaders. "With the up and down volatility that comes with the COVID waves, we've got to learn to manage that within our capacity and throughput. Now that we've been through it, we have to start to shift from the volume being pandemic to more endemic."

COVID and its variants are just part of what's plaguing health systems.

"The biggest short-term burden out there, hitting the entire nation, is the labor shortage," Damschroder said. "In healthcare, it's not just created by the Great Resignation. We're watching people retire and leave the workforce, just due to burnout. Our most significant concern for the short term and long term is for our people."

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For Henry Ford Health, Damschroder says the best approach to the situation will be a blend of the old and new—a reinvestment in people combined with an embrace of technology.

As a more traditional approach, Damschroder points to strategies Henry Ford Health has used in the past.

"Like many, we're recruiting nurses from the Philippines," Damschroder said. "We've done this two other times in the past 30 years and it's been successful. That initiative has started, and we expect by September to have 100–150 of those nurses here. It will probably be a two-year plan to get all those slots filled."

She added: "And just like everyone, this was a wake-up call for employers about what employees want in flexibility around their time and flexibility around which benefits to choose. We've had a lot of studies going into how do you respond to the different [perspectives] … in your organization, as well as to the different generations and needs [of] people. We've learned that you've got to create greater flexibility."

As far as an innovative solution, automation has the potential to play a significant role.

"There are certain jobs that are probably going to go away because we don't have people to do them. So how do we use technology to fill that gap?" Damschroder said. "We have a real opportunity to redesign our care models and our roles."