July 9, 2020

Three Things COVID-19 Has Taught Us About the Healthcare Workforce

by Jennifer Stewart

THE GIST

COVID-19 has revealed the healthcare workforce is too brittle, costly, and on the precipice of becoming angry and disengaged. Even in the throes of the pandemic, leaders must bolster providers’ ability to flex between units and settings, radically restructure labor costs, and seize a rapidly closing window to engage early career providers

THE FACTS

  • Labor represented 51 percent of total hospital expenses in 2008; labor’s share of total hospital expenses rose to 54.9 percent by 2018
  • 586,500 new hospital positions were created between 2009 and 2019
  • Georgia State University estimates COVID-19 will imperil 16 percent of all healthcare jobs, while estimating automation will imperil 36 percent of healthcare jobs

OUR ANALYSIS

1. When tested by COVID-19, our health system workforce proved brittle in ways that limited flexibility  

When leaders attempted to make on-the-fly staffing changes to respond to cancelled non-urgent procedures and a surge of COVID-19 cases, they discovered their workforces were over-specialized. Providers at all levels, from physicians to nursing staff, lacked recent critical care experience (or cross-training) and were underprepared to flex into ICU units. Moreover, staff trained with crash courses in critical care skills and quickly deployed felt underprepared to fill needed roles. This led to staffing imbalances: even as workers in non-urgent services were furloughed, ICUs struggled to find staff.

In order to meet ongoing surge needs related to the current pandemic, as well as any future events, health systems need to increase workforce flexibility in three ways:

  • Better prepare providers to float across multiple unit types, so providers can be readily sent to the inpatient with greatest need, in particular, providing regular exposure and updated training for more intensive care delivery.
  • Proactively train providers to flex across different settings, so care can be provided where patients want to be seen.
  • Create additional care team models, so providers can be matched to patient needs rather than having a costly, inflexible, one-size-fits-all care model. In particular, building models that allow the skills of highly-trained specialists (i.e. respiratory therapists, critical care physicians) across a managed team of alternate providers will be key in providing well-trained and confident provider surge capacity.

2. Hospitals must move from incremental cost cutting to radical cost restructuring

Labor represented 55 percent of total hospital expenditures in 2018. Given the magnitude of labor spending, health systems who are serious about cutting costs cannot avoid reducing labor. Hiring freezes alone will not generate sufficient savings.

The first few cost-cutting moves will sound familiar:

  • Administrative ranks should be thinned first. It’s populist and politically palatable—and hospitals are rightfully notorious for the proliferation of “director” titles during profitable times.
  • Programs that aren’t performing well or central to the health system’s mission should be cut. Avoid the pitfalls of recent cost cutting rounds in which every department saw labor cut by a mandated percentage; this meant providers across the entire organization were stretched thinly and stressed. Instead, concentrate cuts on entire programs or select areas. In a recent conversation, the Chief Human Resource Officer of a regional system told us: “It is better to cut off the arm, than do surgery all over the body.”
  • Open, full-time roles should be backfilled as part-time and PRN to build surge capacity and avoid paying for contingent labor.

But these moves won’t fundamentally reshape the labor cost structure. To do so, leaders should seriously weigh automation. Automated systems already have the ability to perform back office work, much of the revenue cycle, and even answer inbound calls. COVID-19 has served as an accelerant to automation; not only do automated systems work 24/7, they aren’t subject to social distancing, or at risk of infection.

While the impact of automation has largely escaped the popular dialogue, it should not be overlooked. Georgia State University predicts automation may eliminate twice as many healthcare jobs as COVID-19.

3. Leaders will face an engagement challenge when the “healthcare halo effect” wears off, but have a window to engage newer providers

Once the immediate “healthcare halo” fades, many healthcare workers may begin a “search for the guilty”, looking to find those responsible for shortcomings in capacity planning, shortages of PPE and other safety lapses during the initial pandemic response. Inevitably, their gaze will fall on health system leadership.

We already see unions amplifying conflict between frontline providers and system leadership. Unions are using COVID-19 as “proof of concept” to advertise the benefits they can obtain for their members, as well as a springboard into new geographies and arms of the healthcare workforce. The risk of successful unionization campaigns is they will limit leaders’ ability to build a more flexible workforce and radically restructure costs. Nursing unions have precedent of locking-in not only salaries—but also staffing ratios and float policies. And an open question is if unions will look to expand further to groups that traditionally have less union representation, such as medical residents.

Once the “healthcare halo” fades, healthcare workers may begin a “search for the guilty”, looking to find those responsible for shortages of PPE and other safety lapses

Existing provider anger will be further exacerbated by cuts to labor and wages, demands for increased provider flexibility, and additional waves of COVID-19 patients—particularly if the system has not effectively demonstrated learning from the first round of nationwide COVID management. Staff will continue to be pushed out of their comfort zone and leaders will face a significant engagement challenge, becoming even more serious as provider fatigue mounts over months of being on “high alert” as the pandemic persists, and public displays of support for the healthcare workforce wane.

But the engagement challenge won’t be spread equally across the workforce. Older, more-tenured providers have valuable clinical expertise—but are also the most likely to be displeased by mandates to increase staff flexibility and cut costs. As leaders weigh engagement efforts, they should deliberately decide which tenured staff to retain, and which staff may not be interested in new ways of delivering care and shouldn’t be the focus of engagement efforts.

At the same time, leaders have an opportunity to engage early-career providers. Often more flexible, they are likely to be energized by the opportunity to innovate, and eager to gain ICU experience. Newer graduates are often frustrated they are “shut out” of critical care early in their careers. Hospital leaders can increase the engagement and build a pipeline of highly-skilled younger providers if they provide meaningful, safe opportunities to care for COVID-19 patients.