Regardless of personal feelings or political affiliations, the business of healthcare moves “forward” with more certainty than before the election.
Increased certainty, however, does not mean increased clarity on what lies ahead and what the best strategy is for navigating a road that hasn’t yet been built.
As states have now decided whether or not to run their own insurance exchanges or opt for federal exchanges, hospitals and health systems are left facing a new, difficult business model at a time when the previous, post-recession model was challenging enough.
Now, in the “new normal,” providers are being asked to see more patients, increase the level of quality, and do so for less compensation. This will present new pressures on the care delivery system and bring to head the challenges at our doorstep.
The Elephant in the Room
In two recent surveys conducted by Avantas, 70% of HR leaders and 75% of Nursing leaders stated that healthcare was experiencing a nursing shortage or will be soon. This sentiment is being backed up by studies, surveys, and media outlets across the country.
Here are the facts that make the looming nursing shortage something to not take lightly:
- 32 million more people will have insurance by 2019 (Congressional Budget Office)
- 10,000 baby boomers reach age 65 every day – this will continue until 2030 (Pew Research Center)
- 1/3 of the nursing workforce is 50 or older (Washington Post)
These three statistics taken at face value are daunting, but taken in the context that compensation for services is tied to quality, and quality suffers when staffing resources are strained, the industry is entering deep waters indeed.
What You Can Do Now
Labor is the tie that binds quality outcomes, compensation, and 60% of every organization’s operating expense. Effectively managing labor is the key to long-term viability. Following are three actions you can take now to position your organization to succeed.
Assess Your Situation.
An analysis of your workforce will help identify potential issues related to the generational makeup of your employee population. A unit/department with a heavy contingent of senior staff and new grads, while great for mentoring, is imbalanced and can leave you with an inexperienced workforce.
Control FTE Leakage.
FTE leakage, i.e., the hours a staff member has not worked but should have based on their FTE commitment, is a silent drain on resources and finances, quietly eroding quality all the while. FTE leakage requires organizations to fill those vacant shifts with more expensive forms of contingency staff, whether that is other core staff working extra or in overtime, float pool staff, or external contract staff. This is important, as these forms of contingency staffing should be used when needed, not to compensate for core staff not working the hours they committed to. We have discovered, on average, a savings opportunity of $12,500 per department annually from this one metric.
Properly Align Staff.
What is the appropriate mix of Core to Contingency staff? The answer varies from department to department. Areas with a highly volatile patient census need less core staff and more contingency resources that can expand and contract to meet demand. Core staff should be sized to the extent that cancellation, overtime, and floating are minimized. Part of hedging your organization against the upcoming shortage is reducing the staff dissatisfiers that lead to turnover.
If your organization is not properly staffed to meet demand all other initiatives to increase quality and decrease readmissions (and do so cost-effectively) will be unfruitful.