It's not the best of times for the healthcare sector, but the conventional wisdom that the industry is relatively recession-resistant appears to be holding. For example, the most recent monthly employment report from the U.S. Labor Department, for September, showed an unexpectedly high overall job loss of 263,000 but detected a modest uptick of 19,000 jobs in the medical field.
Working smarter
Competition heats up for the second annual Best Places to Work in Healthcare ranking, and once again providers dominate the roster—organizations that show what it takes to outpace their industry peers
But healthcare providers face volume decreases that have ripple effects for the rest of the industry, and employment specialists say employers will discover that continuing to reinvest in their workforces—even during a job market more heavily tilted toward employers than usual—will be crucial to their continued success.
“People may leave later because you neglected them or sat back on your laurels a little bit,” says Janielle Newland, director of human resources at Weymouth, Mass.-based consulting firm Beacon Partners. “I've seen a lot of the hospitals staying pretty stable with their advertising and recruiting campaigns, which is smart. They will reap the rewards of that, whether they actually have jobs open, or they're just continuing their brand awareness.”
Employers that made Modern Healthcare's second annual Best Places to Work in Healthcare list—compiled and ranked by the Best Companies Group, Harrisburg, Pa., and co-sponsored by the Studer Group, Gulf Breeze, Fla.—largely followed these tenets (See the complete ranking). The top 10 Medical information technology provider Intelligent InSites of Fargo, N.D., with 27 employees now and growing quickly, ranks No. 1 on the list. Providers of goods and services took up half of the top 10 slots overall: Sage Products of Cary, Ill., ranks No. 5; VHA of Irving, Texas, came in at No. 7; Awarepoint Corp. of San Diego placed at No. 8; and Premier of Charlotte, N.C., landed at the No. 9 spot on the list.
The top healthcare provider and No. 2 finisher overall was Doctors Hospital of Sarasota (Fla.), with 472 employees and 168 beds. Others in the top 10 include 312-bed CHRISTUS St. Michael Health System in Texarkana, Texas, at No. 3; 318-bed Holy Name Hospital, Teaneck, N.J., No. 4; five-hospital Memorial Healthcare System, Hollywood, Fla., No. 6; and 161-bed Valley Medical Center, Renton, Wash., No. 10.
The top payer, Centene Corp., St. Louis, which has roughly 3,800-employees, finished at No. 61 on the overall list. Only two other payers made the ranking: Preferred Care Partners, Miami, at No. 69; and Availity, Jacksonville, Fla., at No. 82.
That probably doesn't surprise Terry Brauer, CEO of HealthCare Management Consultants in Highland Park, Ill., who says the insurance industry continues to make large profits while conducting layoffs.
“They are masters at adapting. They can lay off several thousand employees, which they have done, without batting an eye,” he says. “They have an extraordinary ability to retain profitability, provide lucrative executive salaries and very, very generous benefits, as if they lived in a bubble, as if nothing else was happening in the economy or the healthcare industry.
“If resourcefulness in adversity is to be admired, and I say that tongue-in-cheek, then I believe the insurance industry is exemplary at what one could call adaptation. They just keep making money, come hell or high water,” Brauer says. “Drug companies, the same thing. They're doing a great job of laying people off. They're not bringing prices down. They're doing a great job of making money.”
More competition
The competition for the second annual Best Places to Work in Healthcare stiffened considerably over the past year: 317 companies participated this year, up 33% from 237 in 2008. Overall company size varied significantly, ranging from the 27 employees reported by top finisher Intelligent InSites to 17,014 at Dallas-based Baylor Health Care System, which ranked No. 76.
Of the 100 that made the list, 34 were repeats from last year, 13 participated last year but did not make the 2008 roster and 53 were new to the process. Forty-four that made the list in 2008 did not make it this year, and 22 others on last year's list did not participate this year.
All three of the top finishers in each category this year were new to the list, as were top 10 finishers Sage Products and Valley Medical Center. Memorial Healthcare System, the No. 6 finisher, participated last year but did not make the list, while No. 7 finisher VHA rose from No. 76 in 2008. Three organizations made the top 10 list both years: CHRISTUS St. Michael, which rose to No. 3 from No. 7; Holy Name Hospital, which rose to No. 4 from No. 6; and Awarepoint, which was No. 8 both years.
Five other top 10 finishers from 2008 made this year's top 100: King's Daughters Medical Center, Ashland, Ky., fell to No. 12 from No. 5; Saint Francis Medical Center, Cape Girardeau, Mo., fell to No. 18 from No. 4; Indiana (Pa.) Regional Medical Center, fell to No. 19 from No. 2; Geonetric, Cedar Rapids, Iowa, fell to No. 23 from No. 10; and Baptist Health South Florida, Coral Gables, fell to No. 51 from No. 9.
The top finisher in 2008, Waynesboro (Pa.) Hospital, did not participate this year, while the No. 3 finisher, FGP International, Greenville, S.C., the top supplier last year, as well as last year's top payer, Amerigroup, Virginia Beach, Va., at No. 48, did not make the list for 2009.
The companies that made this year's ranking, in the aggregate, showed several noteworthy differences in employment practices as compared with the overall list of applicants among the 88 questions on the contest survey (See chart, p. 8). In addition to comparing and contrasting responses on individual questions among all companies participating and those that made the list, Best Companies Group grouped several categories of questions and compared and contrasted their scores on those measures.
This exercise found several differences of more than 5 percentage points: In the leadership and planning category, an average of 79% of all companies provided positive responses to a group of questions compared with 87% among companies that made the Best Places list. For corporate culture and communications, the respective average of positive responses was 80% of all companies, compared with 87% of companies that made the list. For training and development, those figures were 72% and 80%, respectively; and for pay and benefits they were 76% and 83%.
These comparisons track closely with what those who watch employment in the industry have been seeing, as do the recent employment figures. Although some companies have laid off workers or even closed their doors, many in the industry continue to be profitable and are still hiring.
“Healthcare is a leading indicator of the recovery,” says Kevin Burchill, director at Beacon Partners. “We're certainly starting to see a pickup in requests for our services. That's a real indicator that folks have gotten past the worried stage and are now looking to make their organizations well.”
On the employee side, Burchill adds, “We're getting requests from folks looking over the fence and peeking into someone else's backyard and seeing that the grass is greener somewhere else. They're looking to reposition their career with folks who have become proven business commodities.”
Newland agrees: “I'm still seeing your average amount of moving around.” He compares healthcare with financial services and other markets “where people are afraid to move jobs.”
But Brauer senses more trepidation among employees, noting that some hospitals and even more insurance companies have laid off significant numbers of people, while other organizations have gone out of business, merged or were acquired.
“There are just innumerable highly talented, highly skilled people available in the marketplace,” Brauer says. “You have an overall dynamic that bodes well for recruitment of talent. … In terms of retention, there are a lot of people staying put because of the insecurity they have of finding other options. What was once a festival of opportunities has shrunk appreciably.”
Hospital cash flow has slowed as more people have lost their insurance and either put off seeing a doctor or not been able to pay for services, he says. “There's a lot of bad debt. Hospitals are between a rock and a hard place. They retain debt-collection firms, but if they're overzealous, which some of them are,” he says, hospitals “suffer appropriately bad PR.”
Both Burchill and Newland believe the federal economic stimulus package, with tens of billions of dollars set aside for healthcare information technology, will provide opportunities for both hospitals and IT vendors.
The money will create a need for “rank and file, middle management and executive talent around IT to help healthcare organizations navigate their current needs and position their organization for electronic health records with a keen business eye,” Burchill says.
To the extent the job market remains slower than usual, Newland says successful companies have been taking advantage to strategize for the long term. They're asking questions like: “Where are we? Where are we going? And, who do we need to have with us to go there?” Newland says. “They're taking a minute to look at policies and procedures that are going to drive the business when it does pick back up.”
Focus on benefits
Among the areas of focus that Newland has observed in the industry has been the addition of no- and low-cost ancillary benefits, such as wellness programs, which create perceived value even for employees not directly affected.
“It's a little bit of a retention practice,” she says. “From a recruitment standpoint, the more robust your benefits package is … they may not think it's something they need, but they look at all these benefits and say, ‘This is a really robust package.' ”
But Brauer counters that low-cost benefits like awards programs only go so far when employees are treating patients who have become sicker because they delayed treatment and when there's less help to go around because of layoffs.
“That, to me, is not serious. It's like cheerleading at a funeral,” Brauer says. “Monday morning, after the dinner is over from Sunday night, they still have to confront this enormous patient caseload that brings them down again. If you ask 100 nurses, would they rather have a dinner in their honor or an extra set of hands with them on the floor, the odds are 7-to-1 they're going to want the extra set of hands.”
Budget cutbacks also have significantly affected continuing-education programs, Brauer says. “They used to enjoy those kinds of things. That would power them up for awhile,” he says. “Everything's been ratcheted down. It has an adverse impact on the overall morale picture.”
Burchill mentions added efforts at communication as another important step, particularly for retention, in uncertain economic times. After an initial period of rallying everybody around, he says, companies often neglect this issue as a recession drags on.
“Who I've seen rebound and survive well did that because they had great communication with their employees about who we are, where we're going, and what we're doing, frequently,” he says. “Don't let your rumor mill be your communications tool.”
“The old adage is, talk is cheap,” Newland says. “In today's day and age, in the absence of real information, folks will continue to deal with the underground grapevine, the organization's informal channels of communication.” Even when the news isn't good, she says, “To the extent that senior leadership is out front of those areas, and open to everyone in the organization to discuss—some of the best leadership today, is to say: ‘I don't know.' ”
Brauer agrees that healthcare managers and executives have improved their communications skills, but he sees limited value to that. “They're getting more wired in and trying to be more responsive,” he says. “But, given the greater number of patients, and absent the extra hands, if you will, the staffing they feel they need, it's not that meaningful. I think they know it. It's a holding pattern.”
The top finishers in Modern Healthcare's Best Places to Work in Healthcare are largely those organizations that have stayed afloat while avoiding layoffs. The No. 3 finisher overall, CHRISTUS St. Michael, has not conducted layoffs and, in fact, has continued to hire in spite of revenue falling 6% and volume decreasing 8% as of September in year-to-date comparisons with 2008.
“We've all seen volume decreases,” says Francine Francis, CHRISTUS St. Michael's director of marketing and communications, echoing Brauer when she says patients figure: “I'm not going to get my knee replaced because I don't have the money for the deductible.”
The hospital has seen an uptick in outpatient procedures and has avoided layoffs by carefully watching supply costs, avoiding overtime whenever possible, and matching departmental staffing to volume, with adjustments made on a weekly basis based on the previous week's volume, Francis says.
If volume unexpectedly picks up during the week, she adds, “you staff appropriately and let the CFO know. It's not a do-or-die thing.”
“Everybody ‘flexes' the next week to what that number is,” adds Pam Kennedy, vice president of human resources and organizational development at CHRISTUS St. Michael. “It's been a very positive measure because people are very excited to have a job. … We're doing this so we don't have to lay them off. It gives them security in a difficult economy.”
CHRISTUS St. Michael provides benefits like an on-site employee assistance program counselor, a noncontributory cash balance plan in which 6% of base salary is put into a retirement account, and a separate matched savings plan that has the hospital matching 50% of an employee's contributions up to 4% of salary, Kennedy says.
On the communication side, the organization holds 16 “town hall”-style meetings per quarter and keeps 32 communication boards throughout the hospital and in off-site facilities updated with the latest information on financials.
“There's a real sense that we not only talk the talk, but we actually walk the walk,” says Sherilyn Cotten, human resources manager. “That's evident with our new associates. They get a sense of belonging. … There are no surprises. We get great feedback from the orientation presentation—many say we are who we say we are.”
CHRISTUS St. Michael's status as the Texarkana region's second-largest employer helps with recruitment, as does recognition through contests like the Best Companies to Work for in Texas, sponsored by several organizations in that state, as well as Modern Healthcare's national competition—its No. 7 finish on last year's Best Places to Work in Healthcare is proudly displayed on a banner near the hospital's entrance.
“When we meet people on the street, and they find out where we work, they say, ‘I want to work there. What do I need to do to come onboard?' That's so nice to hear,” Cotten says. “It makes us very proud.”
Placement in Modern Healthcare's competition also has worked out well for Holy Name Hospital, this year's No. 4 finisher, which has also received accolades from other third parties such as J.D. Power and Associates, which ranked it first regionally for inpatient, outpatient and emergency services care, says Diane Gannon, the hospital's human resources manager and nurse recruiter.
“Being ranked in the top 100 in Modern Healthcare has leveraged very well in our recruiting initiatives,” says Jane Ellis, vice president of marketing and public relations. “We utilize that across all of our marketing initiatives as we recruit for new employees and new physicians—and new patients. They think, ‘That's where I want to be because if they're happy, they'll take good care of me.' ”
“Happy employees make happy customers,” Gannon agrees. “We're always looking at how we can do better, how we can involve employees more in the organization, how we can help them better balance work and personal life.”
Ellis says she's frequently asked whether the hospital has jobs available. “Even though the economics have been pretty tough … we haven't had to come up with extraordinary or out-of-the-box ideas with regard to recruiting,” she says.
Once a candidate is hired, Holy Name rolls out its first-year “on-boarding” program to help acclimate the new hire to its culture. This initiative, developed in the past couple of years, includes a personalized welcome letter, a “buddy system” in which the new hire is linked with a specific veteran employee, regular post-hire meetings to gain mutual feedback and an anniversary celebration. “That's geared to make the new employee feel comfortable in the organization,” Gannon says.
To further bolster retention, the hospital reached out to employees of all stripes in creating the Excellence Begins With Me program, comprehensive training aimed at across-the-board “five-star performance” that “emphasizes how we treat our patients, how we treat their families, how we treat each other makes a difference when patients still have a choice as to where they get their healthcare,” Ellis says.
That reality hit close to home when nearby Pascack Valley Hospital in Westwood, N.J., closed its doors in 2007. “That certainly unsettled the market,” Ellis says. “The redistribution of patients has been tough. It's placed burdens on families to go out of their comfort level” to a different facility.
“This is a highly competitive market,” she adds, which is situated right across the river from New York. “People still go over the bridge for perceived world-class healthcare. Our efforts—and our employees' efforts—are aimed to help the patient base understand that they don't have to go over the bridge for world-class healthcare.”
Prospering in tough times
No. 5 finisher Sage Products, based in Cary, Ill., sells patient hygiene-related products that help those on ventilators, undergoing surgery or immobilized for periods of time from developing complications from their condition. President and Chief Operating Officer Scott Brown says the medical supply industry in general has continued to prosper in spite of difficult economic times, and the 563-employee Sage in particular has seen double-digit percentage revenue growth the past couple of years and continues to hire.
The company has taken pains to assure employees that all is well, he says. When the economy “got real bad last year, we invited everybody in, and we said, ‘We understand that you're hearing a lot of bad things about what's going on in the economy, you're hearing a lot of bad things about management in companies that were blue-chip in the past. We don't want you to assume anything here. We're doing well. We're hiring. We're investing. We're growing. And you deserve to know how this company is doing.' That has paid off for us, tremendously.”
Sage continues to communicate consistently about topics like new studies that reference their products, new hospitals that are using them, capital improvements and other investments the company has made, and how employees can best nurture their 401(k) plans, which the company matches dollar-for-dollar up to 10% of salary. “A lot of people were thinking, ‘Should I get out of it?' after last year” when the market took a nose dive, Brown says. “Our CFO talked about why you should want to continue to contribute, particularly with our match: ‘We'll sit down and talk with you and figure out where you want to go with this.' ”
The company also has bolstered its wellness program over the past few years, which Brown notes pays off in three different ways: It tells employees how much the company cares about them and their families, it reduces the company's healthcare costs, and it dovetails with the goals of federal healthcare reform by “taking responsibility for yourself.”
A bottom-up, employee-led effort called the “exuberance committee” has led to increased socializing opportunities among employees on different shifts and in different locations while fueling philanthropic work of various types. “We want to be thought of as a company that's very committed to the community,” Brown says.
Sage—a new entry in Modern Healthcare's Best Places to Work in Healthcare contest this year—has entered and been ranked in other human resources management-related contests, including a national survey that focused on medium-size companies, Brown says. “We wanted to know how we rank in the healthcare industry,” he says. “We're very proud to be part of this.”
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