Hospitals are spending more money on retention, recruiting, and benefits programs to maintain staffing levels and working to ensure the same quality level of care.
Editor's note: This is part two of a three-part series about the Great Resignation from the healthcare CFO perspective. Read part one here.
One of the biggest hopes of healthcare executives is that COVID-19 case numbers and hospitalizations will continue their current decline, enabling countless burnt-out healthcare workers to get desperately needed breaks from long hours, constant stress, and grueling job demands.
Those factors are said to be the primary reasons for the mass exodus of healthcare workers who have left their jobs, and in some cases, the field of medicine entirely.
For each hospital or healthcare system, this workforce trend has greatly increased the number of open job requisitions at organizations. In turn, it has meant spending more money on recruiting, training, and compensation programs to maintain staffing levels, and ensuring that quality of care is retained.
Sharing their views on how the Great Resignation is affecting their organizations are Terry Lutz, CFO at Scheurer Hospital in Pigeon, Michigan; and Carlos Bohorquez, CFO at El Camino Health in Mountain View, California. Dr. Gail Gazelle, MD, assistant professor of medicine at Harvard University in Massachusetts and a master-certified coach for physicians, also shares her insights on what organizations can do to combat this trend.
How hospitals are affected
Employee turnover at Scheurer Hospital has increased during the pandemic, says Lutz, at the 25-bed critical access hospital.
"It has been due to a combination of people leaving for retirement, for other jobs, or simply deciding not to work since they were getting stimulus money," Lutz explains. "With almost 500 employees, we normally would have about 10–25 job openings. But it has been as high as 60 openings and is currently just under 40 job openings."
With COVID-19 numbers now declining, Lutz says he hopes the workforce will return to some normalcy. He says pay increases at Scheurer Hospital and other hospitals should help convince people to stay in healthcare. Many employees who left jobs for financial reasons or who feared the risk of infection will hopefully decide to return, he says.
"The challenge is whether we can handle the additional cost for what we have to provide them, by becoming more efficient and decreasing services that aren't providing enough benefit to the community," Lutz says.
The same is happening at El Camino Health, Bohorquez says. El Camino's two hospitals are paying more to keep workers employed and motivated. But the health system is also not being reimbursed at the same rate normally received for the care it provides.
"A lot of organizations are struggling financially, and it's often tied to unfunded mandates," Bohorquez explains. "What they are reimbursed [for COVID care, especially] does not always cover the full cost of providing care. When an organization faces financial challenges, [it is] often forced to make difficult decisions."
Quality of care
Gazelle worries about the effect that the Great Resignation is having on the quality of care that hospitals and healthcare systems can provide. Even if a hospital has been able to hire traveling workers to maintain staffing levels, she questions if the quality of care is the same, she says.
While traveling nurse positions generally afford higher pay, these nurses often work in communities they have no personal ties to.
"When we don't have a committed dedicated workforce, it makes it difficult for the whole healthcare system to thrive," Gazelle says. "If you think for a moment about a physician in a busy emergency room, where they've lost some of their regular nurses and now they're having to work with traveling nurses, those new nurses probably aren't familiar with the needs of that particular population. It's quite disruptive. It makes it difficult for the advanced emergency physician to provide good care to vulnerable individuals."
But many hospitals simply can't get by with traveling replacements, and the staffing shortage is forcing them to get creative.
"We have had to keep patients in the emergency room since our staffing and volume in acute care didn't allow for the internal transfer," Lutz explains. "We haven't been able to transfer some patients to larger tertiary hospitals, since their staffing shortages resulted in beds not being available. It has resulted in some innovation on our part, in conjunction with a larger facility, where we initiated telehealth in the inpatient unit to access specialists needed to care for patients."
Retention and reward efforts
The Great Resignation is adding more pain to an already challenging workforce shortage in healthcare. Hospitals and health systems that are viewed as leaders and innovators will likely fare better than others.
"In healthcare, it's almost like a rotating door with so many people leaving their jobs," Gazelle says. "We're in the midst of a major national nursing shortage and nurses can make much more by leaving their job and signing up to be a traveling nurse. At the same time, levels of burnout in physicians are high, especially given the added demands of the pandemic. Many physicians are moving to a different practice or, for some, simply throwing in the towel on the career they worked so hard to attain."
These trends are placing greater pressure in the battle for qualified staff, as well as the struggle for organizations to be viewed by job candidates as a great place to work, Bohorquez says.
In that effort, Scheurer Hospital has added a monetary incentive for employees to recruit new team members, Lutz says.
"We have also utilized part of the [COVID-19] stimulus funds to provide a bonus for our entire employee group. We are increasing pay for some of our employees and evaluating how much we need to increase others to retain them. We are also considering how we staff various departments, and whether we can or should provide all of the services we currently are providing to the community."
Nursing schools and grads fill vacancies
Even before the pandemic, healthcare executives knew that the industry was heading into a major nursing shortage. That places greater focus on how many people are entering nursing and medical schools.
In the short term, many hospitals and healthcare systems are increasing their college recruiting efforts. That is a step taken by Scheurer Hospital.
The hospital added a college recruiter, "in the hope of encouraging more new grads to work for us. We have also added a program to pay for part of their college debt in return for a commitment to work for [us for] a period of time," Lutz says.
What remains to be seen is what effect the pandemic will have both short term and long term on the number of people who want to enter the healthcare field.
There is some good news on that front. According to the American Association of Colleges of Nursing, enrollment in nursing school programs increased by 6% in 2020. The 2021 numbers have not yet been released.
Countering this increase in the number of students entering nursing programs is the continued decline in available nursing faculty, and the number of positions available at hospitals due to mergers, acquisitions, and organization closures.
Editor's note: In part three of this series, we will look at how the Great Resignation is affecting the role of the healthcare CFO, and further steps CFOs can take to combat the Great Resignation
“The challenge is whether we can handle the additional cost for what we have to provide them, by becoming more efficient and decreasing services that aren't providing enough benefit to the community.”
Terry Lutz, CFO, Scheurer Hospital
David Weldon is a contributing writer for HealthLeaders.
Many hospitals are seeing significantly more job vacancies and taking longer to fill positions.
To maintain staffing levels, hospitals must pay out more in compensation and benefits.