How apprenticeships, float pools help providers fight labor costs

Providers are relying on out-of-the-box thinking to navigate historically high labor costs that show no sign of easing.

Hospitals, health systems and other providers are investing billions of dollars to attract and retain the talent they need. Inflation and higher wage expectations are driving up costs, and contract workers remain necessary in some markets to fill care gaps. Meanwhile, a limited supply of workers is stoking fierce competition between healthcare organizations and with other industries.

Related: For-profit hospitals bringing doctors in-house as costs rise

Average annual wages grew as much as 43% for physicians, 16% for physician assistants and 22% for registered nurses from 2019 to 2023, according to Bureau of Labor Statistics data. 

Advanced practice providers, nurses, certified registered nurse anesthetists and technicians are some of the toughest positions to fill, industry watchers say.

To boost their attractiveness as a workplace, employers are revamping compensation packages with tuition reimbursement, flexible scheduling and other benefits, while also using alternative methods such as hybrid care models to cover roles until more employees are hired. The efforts take time and money, but providers are hoping the investments will pay off.

Sioux Falls, South Dakota-based Sanford Health began piloting an apprenticeship program this spring to improve turnover rates in entry-level positions such as laboratory assistants, pharmacy technicians and patient transporters. New employees rotate through multiple departments and collaborate with managers to determine the best fit before settling into a permanent role. 

Twelve employees participated in the first cohort, and 12 more are set to start rotations in July.

“The strategy of just posting a job and hoping people apply is gone," said Matt Hocks, Sanford's chief operating officer.  "You need to be much more sophisticated. You need to have a multimodal approach to recruiting, growing your own, investing in your current workforce to reduce turnover."

Hocks said Sanford plans to track turnover rates for regular hires versus those in the apprenticeship program.

Providers also are adjusting to younger generations with different workplace expectations, including a desire to limit working hours and earn a secure salary that doesn’t rely on productivity metrics. Potential hires want to see compensation perks such as tuition reimbursement, relocation packages, quality-based bonuses and wellness resources.

“Five years ago, none of these organizations had to deal with that,” said Mark Ryberg, physician workforce practice leader at consulting firm SullivanCotter. 

Clearwater, Florida-based BayCare Health System is starting early. The health system partnered with nonprofit Boys & Girls Clubs of the Suncoast last year to establish an apprenticeship program for high school students interested in careers such as patient care technicians, licensed practical nurses and registered nurses.

Students work at BayCare facilities after school for four hours on Mondays, Wednesdays and Thursdays over three months. They graduate from the program with five weeks of training and seven weeks of preceptorship, including 40 hours as a nurse helper and 40 hours as a transporter. 

The program started with 10 students, half of whom BayCare hired, while the others decided to pursue college degrees.

"I don't see competition going away," said Kyle Barr, chief team resources officer at BayCare. "We lose team members on occasion to our competitors, but we get team members from our competitors as well."

Providers are also focused on whittling labor costs where they can. 

Some providers have cut administrative positions and service lines. Others are developing new ways to generate revenue.

“Workforce costs should not be viewed as just a cost. It’s really a driver of revenue in so many cases,” said Meredith Lapointe, chief business officer at staffing firm AMN Healthcare. “The lack of a staffed bed impairs your ability to earn revenue on those beds.”

Livonia, Michigan-based Trinity Health, which said labor costs increased 19.2% between fiscal years 2019 and 2023, launched its TogetherTeam hybrid care model in September. Care teams include a direct care registered nurse, an on-site nursing assistant or licensed practical nurse and a registered nurse with virtual access to patient rooms, all collaborating on a patient’s care plan.

The model, which has been implemented in 24 hospitals and 62 nursing units across 11 states, has allowed Trinity to open more than 100 inpatient beds that were unused because of staffing shortages, President and CEO Michael Slubowski said in an email.

Houston Methodist in Texas stood up an internal float pool in 2022 to improve its operations by cross-training employees to fill gaps across the system’s eight hospitals. The float pool includes about 370 employees, most of whom are nurses.

"We're able to understand what the scheduling needs are from hospital campus to hospital campus," said Michael Brown, chief human resources officer at Houston Methodist. "Because it's a centralized work group, we're able to look across the system and then deploy resources as necessary." 

Brown said Houston Methodist's goal is to grow the float pool to include additional positions besides nursing.