Hospitals' bottom lines swell after staffing strategy overhauls

Nurse, physician and administrative staff shortages have led to expensive contract labor, overworked staff and under-resourced hospitals. C-suite executives across the board are redesigning recruitment and retention efforts for clinical and administrative staff, ideally leading to less turnover and better quality of care.

 But that's easier said than done.

David Verinder, president and CEO of Sarasota (Fla.) Memorial Hospital, told Becker's he is laser-focused on sustainable staffing and workforce development through the end of this year and into next year. He said the team's multi-pronged approach to improve recruitment and retention, reduce turnover, decrease reliance on contract staff and drive performance excellence has led to offering defined career paths, internships and tuition reimbursement to support professional growth.

The hospital has also developed a "mobile float pool" for employees to have more flexible hours. Coupled with increased paid time off and an initiative targeting nurse wellness, Sarasota Memorial is seeing encouraging results.

"Our investment in our workforce has resulted in improved turnover rates, increased efficiency, lower contract and premium labor expenses, increased employee engagement and superior outcomes, all while maintaining a positive bottom line," he said.

Zuckerberg San Francisco General Hospital has zeroed in on reviewing processes to mitigate gaps in care and become more efficient. "One of the smartest things my team has done over the last 12 months that was impressive and improved the system's bottom line was to redo their staffing model to improve capacity, which addressed the exponential increase in our census, while reducing overtime and registry / contracted labor we use. Here, they partnered with human resources to expedite hiring and also build an internal ladder to train staff to fill vacated positions permanently," Andrea Turner, COO of the hospital, said.

Fitch reported in early September that hospitals are seeing labor inflationary pressures slow and the focus on recruitment and retention has reduced job openings but increased baseline staffing rates. The increased rates are likely to be the "new normal" in healthcare versus a one-time inflated rate, according to Fitch. But there is hope.

"If labor market improvements are sustained and COVID hospitalizations remain at a level that does not create a surge in demand for nurses or disruption of surgical volumes, health systems should be able to manage through expense challenges over the next few years to improve profitability gradually," Fitch noted in the report summary.

Seth Ciabotti, CEO of MSU Health Care at Michigan State University in East Lansing, said he conducted an employee satisfaction survey and used the results to lay out an action plan that offered more support for middle managers.

"In many ways we had neglected their input and had taken their talents for granted," Mr. Ciabotti told Becker's. "Our managers are vital for our transformation. This has shown as having a positive impact on our bottom line both last year and for the current fiscal year."

The Miami Cancer Institute / Baptist Health Cancer Center has undergone an organizational redesign, consolidating reporting verticals in service areas for a local team approach, said Mark Davis, MD, COO of the institute. Service line teams get operational, financial and workforce data to evaluate performance.

"Metrics have been created and each team leader has responsibility and authority in their area with interpretive and tactical support provided by senior leadership," said Dr. Davis. "We established a new comprehensive dashboard to house all data in one place for executive review. And, very importantly, culture has been advanced to be team-based and just, I call it, 'flipping the org chart.' Results have been a $100 million margin turn around in less than 2 years and a greater than 90 percent patient satisfaction."

Health system executives are also placing a premium on selective hiring. A necessity for manpower drove more lax hiring practices during the height of the pandemic, but now hospitals and health systems can be more intentional about hiring and promoting talented individuals who fit within the organization's culture.

Steven Airhart, group CEO of Hartgrove Behavioral Health System and Garfield Park Behavioral Hospital, said the smartest thing his team did last year was return to pre-pandemic hiring practices.

"We have resumed the more restrictive and selective protocols to once again ensure that our patients are not only provided the best care, but also provided the most professional, customer service-oriented and patient-centric care," said Mr. Airhart. "As leaders, we did what we had to do in order to survive the pandemic, but we are back to the pre-pandemic hiring practices, and that impacts our bottom line in many positive ways."

Gina Calder, president of Barnes Jewish St. Peters (Mo.) Hospital and Progress West Hospital said intentionally hiring diverse leaders for the hospitals who leaned into the three priorities for BJC Health in the year led to a positive 0.4 percent favorable impact to the system's overall revenue over last year's plan. The three priorities are growth, people and value.

"Strategic planning and recruiting, retaining, [and] aligning quality providers in the bone and joint, heart and vascular, stroke and cancer services has increased revenues by more than $85 million, or 8 percent, over the prior year for 2023," said Ms. Calder. She also said reducing the adjusted voluntary turnover to about 16 percent and dropping agency nursing has saved around $578,000 annually and is expected to decrease expenses by $3.2 million over 12 months.

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