CFO roundtable: 3 finance leaders on clinical staffing, retention issues

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The healthcare workforce represents one of hospitals' biggest costs and affects every aspect of the organization, from the quality of patient care to the hospital's bottom line. With such high stakes amid the transition to value-based care, leaders must ramp up recruiting and retention strategies while mitigating the effects of the nationwide staffing shortage.

At the AMN Healthcare 2016 Healthcare Workforce Summit in San Diego, Scott Becker, publisher of Becker's Hospital Review, moderated a panel discussion with three health system finance executives on the top staffing challenges they are seeing in their organizations.

Panelists included Gary Raju, CFO of St. Louis-based Mercy Health System of Oklahoma; Chip Neuman, CFO of Community Regional Medical Center in Fresno, Calif.; and Brian Scott, CFO, chief administrative officer and treasurer of AMN Healthcare.

Here are three of the most interesting takeaways from the panel.

1. There is a wide disconnect between compensation and current care delivery models. Although all hospitals are working to transform care delivery and compensation systems to support a value-based model, for many organizations, the pace of change for each component is out of sync. According to Mr. Raju, most of Mercy's hospital business is still rooted in fee-for-service. "We are still in a system where the more we do, the more we get paid," he said. "One of our biggest challenges is realigning compensation to reward the quality of care for a population."

The health system has introduced some elements of pay for performance, but communicating this new system to employees is still a challenge, according to Mr. Raju. "People get a bonus check and they don't know what for," he said. "People in nursing and other workers don't get a sense of how they are compensated in terms of value."

2. The nationwide staffing shortage makes recruiting and retention efforts all the more important. In the face of a worsening clinician shortage, hospitals and health systems cannot afford to lose solid talent. According to Mr. Scott, attracting and retaining the best workers is not as easy as it once was. Offering higher salaries will always make an organization attractive, but with heightened competition among providers for talent, organizations that offer development opportunities such as additional training, college tuition reimbursement, student loan forgiveness, comprehensive insurance and other benefits will stand out from their peers. "It's a good market for employees," he said.

It's important to know that hiring is only the first step. When it comes to retention, it is equally — if not more — important for hospitals to prioritize creating a supportive and rewarding workplace for employees. "In terms of retention, the most important thing is how the nurses feel they are being treated at work," said Mr. Raju. "How is the medical staff treating them? Do they feel valued by the system? Do they feel empowered to do what they believe is best for the patients?" He added that nurses typically don't hesitate to leave an organization if they aren't satisfied with their jobs.

3. Effective leaders today must possess different skill sets than in the past. "The skills you need to be a leader today are different than 10 or 20 years ago," said Mr. Scott. "Being a subject matter expert is not enough. You must be adaptable, you must be able to inspire others and, importantly, you must invest in succession planning."

Mr. Neuman echoed Mr. Scott, noting that when he first began his career in healthcare, CFOs were known only as finance leaders. "Now CFOs are expected to understand more about the hospital's clinical operations, and clinicians are expected to know more about the finance side," he said.

Leaders today have largely moved away from top-down leadership styles and tend to be more deferential to teams, according to Mr. Raju, as driving transformation is more effective when it is done by a team.

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