Addressing the Workforce Crisis: Labor Management Lessons Learned from a Healthcare Setting

I recently joined the Outreach team with National Investment Center (NIC) following a career in acute-care hospital and ambulatory operations with a large academic medical center. My previous focus was on patient throughput strategies, EHR optimization, telemedicine implementation, value-based care, and lean deployment throughout our organization. I join NIC in the hope of bringing a perspective on how hospitals and health systems can collaborate with the senior housing and skilled nursing sector to increase value, improve care, and ultimately provide a better patient experience. With the implementation of CMS’ Patient Driven Payment Model (PDPM), I am also able to serve as an expert in industry transition to quality-based reimbursement.

As senior housing becomes further ingrained in the care continuum, I believe that we can meet the needs of all seniors, but to do so will require skillful cooperation and coordination among all who play a role. I hope to bring a unique viewpoint to our team and share many of the valuable lessons I learned throughout my tenure in hospital administration. It is in that vein that I share my first post, one that focuses on employment retention and workforce engagement strategies.

Retaining an engaged workforce is a cornerstone of long-term business success but doing so is not always an easy task. Generational preferences and rising wages across the country mean managing labor and its associated costs is a growing concern for all businesses. According to NSI Nursing Solutions’ “2019 National Health Care Retention and RN Staffing Report,” the average cost of turnover for a bedside nurse is anywhere from $40,300 to $64,000. It’s also widely recognized that turnover often leads to declines in safety, quality, and experience. Strategies designed to establish consistent labor pipelines and enhance the quality of staff may help mitigate these challenges. While some of the strategies discussed below in this commentary are specific to healthcare, others can be utilized in any setting. As is often the case, these strategies will require an upfront cost, but with a successful implementation, that cost can be recouped over time as employee turnover, recruitment, onboarding, and training costs greatly outweigh the initial investments.

Attract and Develop Talent Using Residencies & Training Programs

Getting new staff in the door is one of the biggest challenges currently facing health systems. With experienced clinicians commanding increasingly high salaries and generous benefit packages, attracting an early-career talent pool which can be trained to the standards and practices of a specific facility is a winning strategy. Traditional physician residencies have been around for more than a decade, but increasingly residencies and training programs are being made available for a wide variety of clinicians, including Nurse Practitioners, Physicians Assistants, Registered Nurses, Certified Nursing Assistants, and Clinical Technicians.

Residencies can provide a win-win for both the organizations seeking staffing and the employees looking to grow professionally. Access to training in a real-world care setting, the expertise of physicians, and continuing education opportunities can set up an organization with a pipeline to deliver quality clinicians at a more affordable cost. Graduates of these programs are better trained, and therefore better equipped to find employment, but they also establish roots during training. These roots–relationships, routines, and familiarity–often lead to a high retention rate following graduation from the program. It can be rewarding to train the next generation of quality clinicians, but for employers the ultimate goal is securing access to a deep pool of skilled talent.

Create Growth Opportunities for Long-Term Retention

All employers would like their employees to feel a sense of accomplishment in their work. However, employers often seem to fail their employees when it comes to the intrinsic satisfaction they feel. Senior staff with organization-specific expertise can grow frustrated when their organization adds new staff with the same titles and job descriptions they earned over years of service, for example. Even happy employees look for better opportunities, and often these employees are the ones that organizations most want to retain. Employers cannot overlook giving their employees a reason–beyond a paycheck–to stay with the organization.

Career ladders can both reward senior staff for years of service and allow for recognition of skillsets with additional compensation. Procedural skills, certifications, and the ability to staff various care areas should be built-in prerequisites in an organization’s career ladder. With careful design, the career ladder is a powerful tool, enabling organizations to encourage retention, raise average experience levels, and incentivize ongoing professional development.

Invest in Training for Organizational Success

Another often overlooked retention incentive is to invest in training and ongoing development. This strategy requires upfront investment, but can yield improved billing and reimbursement, as well as improved patient care. Take the recent implementation of CMS’ Patient Driven Payment Model (PDPM) and the impact it has on mental health treatment as an example. Only about 5% of nursing home residents have a diagnosis of depression, but academic studies indicate the prevalence is closer to 40%. The disconnect in depression identification in this population can partly be attributed to the differences between overburdened frontline caregivers with multiple pressing demands and the highly-focused nurse teams that conduct studies specifically for academia. Another contributing factor is that the methodology of identifying depression, the Patient Health Questionnaire (PHQ-9), relies on self-reporting that can be distorted by the respondent’s perception of the situation.

With PDPM, however, operators are rewarded for treating each resident’s specific needs, with payments increasing in line with patient acuity. This incentivizes depression identification and documentation, as payment boosts can bring in additional reimbursement income. Offering frontline staff training and education on how to identify and treat depression yields benefits in terms of staff satisfaction–and also improves resident outcomes, and a facility’s bottom line.

Avoid Single-Site Employment Models

Absences and call-outs are a reality facing any organization. Those absences are typically resolved using on-call staff or bringing in an unscheduled employee at a premium rate of pay. For employers with multiple sites in a specific region, creating an employment vehicle that allows for flexibility with regards to daily work location can be a strategy to avoid costly premium wages that are often used to fill holes in schedules. Additional incentive payments made to employees willing to work at multiple sites can be recovered by avoiding the costly alternative of overtime or on-call pay. Navigating Human Resources’ hurdles is the most challenging aspect of this strategy, as titles, benefits, and job responsibilities often vary slightly from one site to another. Usually, developing a separate employment intermediary that houses these flex-staff can resolve those challenges.

Amidst accelerating wage growth, persistent workforce shortages, and other labor-related challenges, the pressure to implement creative, evidence-based solutions to prevent shortfalls both in daily staffing and longer-term leadership roles is intensifying. Employing some–or all–of the strategies mentioned here will help organizations better position themselves for greater long-term success.