As health systems continue to absorb elevated labor costs, some of the most consequential moves in workforce strategy are about retention.
“It’s more cost advantageous to retain the talent you have than to try to recruit new talent and to enhance their productivity,” Maria Ansari, MD, CEO and executive director of The Permanente Medical Group, president and CEO of the Mid-Atlantic Permanente Medical Group, CEO of Northwest Permanente and co-CEO of The Permanente Federation, said. “It’s really trying to work on the top side and using technology to do that.”
The approach at Kaiser Permanente has produced results that stand out even against industry benchmarks. Through a combination of AI-assisted burden reduction, operational redesign, and cultural investment, the organization has seen big results.
“We’ve had a big focus on supporting our clinicians in that type of work — chart documentation and some of it is also in basket management,” Dr. Ansari said. “I’ve actually seen a 66% improvement in our retention rate. Now our current attrition rate even in primary care is 2% or less, which is really incredible.”
The organizational redesign in primary care shifted toward greater autonomy, team-based care and practice support structures designed to restore meaning in clinical work. Leadership development has also moved downstream: managers now have access to an agentic coaching tool to help them navigate difficult workforce decisions.
David Entwistle, president and CEO of Stanford (Calif.) Health Care, framed retention as a margin lever, not just a human capital issue. He pays close attention to the health system’s turnover rate as a measurement as an important financial metric.
“What is your most expensive cost driver in healthcare? It’s labor. When we think about where that’s headed, we’re at 8.76% with the national average at 18.7%,” he said. “How do you look at that turnover piece in perspective? Because it’s a whole lot easier and less expensive to keep them within your organization.”
Stanford’s approach to retention runs through both investment and listening. The health system collected more than 5,000 staff comments during the development of its integrated strategic plan, an exercise Mr. Entwistle described as foundational to employee investment and alignment.
“Are we listening to our employees?” he said. “We spend a lot of time engaging our employees directly. Even in our integrated strategic plan, we did opening listening sessions and got over 5,000 comments back from our teams about where the direction is and where you’re going. Are they vested in that mission?”
The commitment extended through the COVID-19 pandemic. Stanford chose not to implement layoffs even as volumes dropped, a decision Mr. Entwistle connected directly to the system’s current operational strength.
“We had literally vast rooms of people that we had employed that were there without any layoffs,” he said. “But the reality is we had to do that because we knew as soon as we could come back online that we wanted to have those people and teams there. That’s what’s created that ability to not have turnover. That’s also what creates that margin consistency that I’m talking about.”
Turnover is expensive, and consistent labor investment pays compounding returns in margin predictability. When the team is committed to the health system, there is an opportunity to leverage institutional knowledge and expertise to truly innovate. Mr. Entwistle said the health system is embracing technology and innovation enterprisewide for growth.
“We started our own internal incubator accelerator to scale up some of the technologies that go into what we call the ‘valley of death’ between idea and Sand Hill, which is where all the VCs sit in Silicon Valley,” he said. “The reality is, how do we take that innovation? That was one of the things our team started and told us they wanted to scale ideas internally and have the opportunity to be involved.”
John Couris, president and CEO of Florida Health Sciences Center | Tampa General, has a similar outlook on employee engagement. He sees innovation as a culture driver, but leadership must create the right environment to protect the team.
“If you don’t have a culture that drives engagement, psychological safety, and high degrees of trust in your organization, you will never really innovate,” he said. “You’ll innovate, but you’ll suboptimize the innovation, because people will be fearful to fail. If by creating a psychologically safe environment you’re basically telling and showing people it’s okay to make mistakes. I tell my team and executive vice presidents all the time to do the same thing: fail fast, learn fast, move on.”
Every executive likes to tout their culture, but it’s hard work to actually build that culture. Health systems with a deeply ingrained culture have a competitive advantage over those with shallow mantras that don’t reflect the actual day-to-day experience. Tampa General has TGH Ventures, which is part of the enterprise innovation strategy, and they’re constantly looking for new partners and ways to collaborate.
Over the last few years, Tampa General worked with Shield Health Innovations to develop a hospital at home program and scaled it inside the institution. The program treated around 3,000 patients in three years, including complex patients. Now, the health system has commercialized the program and sold it to other health systems.
“That’s the type of innovation that really matters and makes a difference,” said Mr. Couris. “We try to make it alive and palpable in everyday activities, not something we simply talk about at board meetings or big team member sessions. We really work hard on it every day. It’s part of our DNA.”
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