Recruitment and retention is the top priority, hospital execs say

UW Health recently had 3,600 nursing shifts to fill over a six-week period.

The integrated health system, like so many across country, has turned to staffing agencies to fill workforce gaps. But that created friction between its in-house staff and travel nurses, who are often being paid at least twice as much.

On Jan. 16, UW Health implemented a new program for its around 3,400 nurses to ease some of that tension, offering a $100 hourly bonus for nurses who add a 12-hour shift to their normal weekly schedule. The Madison-based system filled 92% of its open shifts within of a week of the program's announcement.

"Now our nurses are making close to what travelers' bring home," UW Health CEO Dr. Alan Kaplan said. "But just addressing this issue from a day-to-day standpoint is woefully insufficient—we also have to strategically plan for the intermediate and long term."

Health systems and other providers are grappling with one of the biggest workforce upheavals in decades. Overstretched healthcare workers are switching jobs or leaving the industry entirely for positions with better pay and benefits, prompting healthcare companies to boost their recruitment and retention programs.

Personnel shortages were hospital CEOs' top concern, according to the American College of Healthcare Executives' annual survey, which polled 310 executives. Personnel shortages surpassed financial challenges for the first time since 2004, ACHE CEO Deborah Bowen said.

"Both long- and short-term solutions are needed to address the shortages in critical front-line staff shown in our study to ensure hospitals have workforces that can meet the demands for safe, high-quality care both today and in the future," she said.

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In addition to pay boosts, UW Health has recruited more workers from other countries, increased the size of its nurse residency program and used new tools and strategies to decrease workloads. The health system is using artificial intelligence to improve scheduling and streamline the pre-authorization process, for instance.

"My whole career has focused on taking care of patients and making sure they have a good experience, stay safe and receive quality care. Me, as an emergency physician, is secondary to that cause," Kaplan said. "This is the first time in my whole career that I put the workforce ahead of patients because it is in such dire straits—if we don't attend to the workforce, we won't be able to take care of patients."

Providers have had to spend more on labor expenses amid the shortage. Total expense per adjusted discharge was up 20.1% in 2021 compared to 2019, according to data from Kaufman Hall. That increase, in part, stems from high staffing agency rates.

Nearly 200 members of Congress have intimated that nurse staffing agencies of illegally profiting off of the pandemic. Lawmakers relayed anecdotal evidence that nurse staffing agencies are inflating prices, by two, three or more times pre-pandemic rates, and then pocketing 40% or more of the amount being charged, they wrote to the White House in a letter requesting a formal investigation.

"I think about the financial viability of these healthcare providers. These nurses are working alongside travelers who are getting paid three-times more than them," said Susan Maupin, vice president at the healthcare consultancy Advis. "I don't know how long many of these healthcare systems can continue to pay these rates. They are getting support through the Provider Relief Fund, but what is the breaking point?"

With the COVID-19 grants, hospitals' median operating margin was 4% in 2021, up from 2.8% in 2020, according to Kaufman Hall. The median dropped to 2.5% and negative 0.9%, respectively, without the aid.

UW Health has also had a lot of turnover for its non-patient-facing staff. About 40% of its full time equivalent entry-level positions for culinary, environmental and other workers were open as of a week ago, Kaplan said. The organization plans to significantly increase its minimum wage, he said.

"We've had to close the cafeteria in the late afternoon so our existing staff could deliver food to patients," Kaplan said. "We can't function without these individuals."