Labor costs are crippling hospitals. Here's how 47 executives are tackling them.

Becker's asked C-suite executives from hospitals and health systems across the U.S. to share their organization's areas of growth for the next few years. 

The 47 executives featured in this article are all speaking at the Becker's Healthcare 11th Annual CEO+CFO Roundtable on Nov. 13-16, 2023, at the Hyatt Regency in Chicago.

To learn more about this event, click here.

If you would like to join as a speaker or a reviewer, contact Mariah Muhammad at or For more information on sponsorship opportunities, contact Jessica Cole at

As part of an ongoing series, Becker's is talking to healthcare leaders who will speak at our conference. The following are answers from our speakers at the event.

Question: What is your hospital/health system doing to manage or reduce labor costs over the next two years?

David L. Callender, MD. President and CEO of Memorial Hermann Health System (Houston): At Memorial Hermann, we believe that investing in our workforce is the most effective approach to managing labor costs. We accomplish this in three ways: one, creating a workplace where all feel valued and welcomed, and diversity is celebrated; two, investing in employee health and wellness programs; and three, providing professional development and career growth opportunities. These strategies have helped reduce our reliance on contract labor, and our workforce retention rate continues to increase.

Health equity is at the core of our mission and vision. As such, our culture is grounded in equity, diversity, and inclusion. As a health system, we embrace the diversity of our workforce, students and trainees, patients and community, and we meaningfully operationalize EDI efforts.

Through our Well Together employee experience model, we have created personalized programs and benefits to meet employee needs and deliver a personalized employee experience that connects, encourages, supports, values and inspires. Well Together at Memorial Hermann includes emergency child and elder care; free access to a concierge service to help employees navigate the logistics of caring for family members or loved ones; and offers multiple options for mental health support, including full-time licensed counselors available for our employees and 24/7 peer support for anyone experiencing a stressful event.

Lastly, we invest in our workforce by encouraging and supporting professional growth and development. With tuition and certification reimbursement, tuition-free clinical degree programs, access to in-house clinical education, and comprehensive support for nurses at all levels from novice to expert, we empower our workforce to obtain new knowledge and experience and advance their careers.

David Lubarsky, MD. CEO and Vice Chancellor of Human Health Sciences at UC Davis Health (Sacramento, Calif.): We are not focused on cutting labor costs, but instead changing the way our workers provide care. Right now, we are managing the cost of physician labor and reducing provider burnout by focusing on physician productivity using AI (augmented intelligence, not artificial intelligence) to reduce low-value work and time-consuming tasks. Non-productive tasks for a doctor include data entry, scrolling through screens, answering inbox messages, coding visit activities, and carefully reviewing images with no findings. These tasks can be triaged and handled by other care team members, with AI assistance (rather than using overseas or outsourced staffed services). With this, we're seeing more revenue per encounter and a lower total cost of care by eliminating useless visits and tests. 

We're keeping our staff secure in their employment by making it clear there is plenty of work to do (physicians and other providers have staffing deficits predicted well into the foreseeable future). Most academic centers suffer from too many patients, but not enough revenue per patient to support all of their missions (complex care, teaching, research and equity initiatives). AI won't replace physicians, but to continue to be truly irreplaceable, physicians will need to learn how to employ AI as a tool to improve their quality outcomes and better manage their patient encounters.

Despite the focus on AI, the biggest change isn't the technology itself, it is people's acceptance of the technology. Physicians have been trained as the ultimate patient advocates to be appropriately distrustful of new-fangled things and profit-driven motives (i.e. black boxes and for-profit administrators). The oath we all take to do no harm mandates physicians see the data first before accepting something new. So, for this to succeed, digital health leaders and facility administrators must work to make sure physicians and nurses understand how AI works, and allow them to see the data, algorithms, and related research to speed adoption. AI does not think, it works from what we already know – and it can reflect our own biases and flaws that may be baked into its results (especially in terms of suggesting treatments). So, AI should be seen as an opinion, a tool, that helps manage time and cost, and the attention of the providers, but not as the source of irrefutable answers. Real compassion still only comes from humans, and compassion remains the strongest medicine. 

Peter D. Banko. President and CEO of Centura Health (Centennial, Colo.): We are viewing the current healthcare environment like Joanna and Chip Gaines would – a Fixer-Upper.  It is an opportunity to completely revitalize our entire connected, enabling health system neighborhood.  We started with creating the position of chief transformation officer to help us strike the right balance between short-term improvement and long-term value, taking responsibility for change and ensuring results are delivered ambitiously and quickly, and carrot and stick.

This transformation – starting in mid-2022 – has been approached from a few perspectives.  First and foremost, it has required us to reimagine how we retain and attract talent as a distinctive place to work. We have minimized the use of contract and other temporary labor which has, in turn, decreased our costs along with improving caregiver engagement, quality, safety, and experience. We accomplished all this with the launch of staffing summits, where bedside nurses and leaders develop their staffing plans and enable changes – with system nursing and human resources leadership – to better serve the needs of their patients and the patient care team.  From the bedside feedback and planning, we stood up centralized bed placement, contingent staffing resources, and virtual nursing.

At the same time, we are working on efficiencies in our clinical operations.  This has been focused on intensive efficiency and effectiveness efforts in the emergency department and surgical suite throughput as well as getting patients discharged in a timely manner and observation status management.  We also tackled more traditional cost opportunity improvement through organizational leadership restructuring, labor management, supply chain, purchased services, pharmacy, physician enterprise, and revenue cycle management transformation.

Bill Gassen. President and CEO of Sanford Health (Sioux Falls, S.D.): Our operational discipline at Sanford Health plays an integral role in ensuring we maximize the impact of our fully integrated system by prioritizing patients and identifying system efficiencies without sacrificing quality or access to necessary services.  

We have invested in bold initiatives to strengthen our workforce including an unprecedented expansion of graduate medical education programs, nationally recognized clinician resiliency programs, flexible working options for clinical and non-clinical staff, leadership development opportunities, DE&I councils, workforce training programs and the use of predictive analytics, data and digitization to improve staffing.   

For example, we are using predictive analytics to schedule clinical staff based on patient demand forecasting which is helping to stabilize our workforce, gain efficiencies and decrease reliance on agency staff, reducing overall costs. Our teams developed a tool over a year ago called LAMP, Leveraging Analytics to Mobilize (our workforce) and Prepare (for the future), which allows us to glean insights into our clinical workforce needs to optimize future staffing and scheduling decisions. 

LAMP has helped to address several nursing workforce challenges including reactive staffing and scheduling processes, a competitive labor market, high workloads and increased costs with traveling nurses. It has also saved scheduling managers 40 hours per month. Looking ahead, we plan to use this tool to support future staffing and hiring needs, as well as to inform higher education demands.   

Sanford Health recently received a nearly $3 million nursing expansion grant from the U.S. Department of Labor, which will create 875 paid nurse internships over the next four years. We have also developed a program with local high schools called “Classroom to Careers” which provides the necessary education for students to become certified nursing assistants (CNAs) while still in high school. Our nationally accredited nurse residency program provides support to new graduate registered nurses to help them build resiliency and strengthen their commitment to the nursing profession. The one-year evidence-based program offers mentoring and seminars on quality, safety, self-care and ethical decision-making.  

International recruitment is also part of our long-term strategy to build a more sustainable nursing workforce. Over the past two years, nearly 300 internationally trained nurses have joined our medical centers, critical access hospitals and skilled nursing facilities across the upper rural Midwest. We plan to hire an additional 600 internationally trained nurses over the next two years. The nurses sign a 3-year contract and are employees of Sanford Health; 75 percent bring their families with them. Our goal is to retain these nurses long-term.   

I am incredibly proud of our teams for adapting to meet the needs of our patients and communities as we've navigated headwinds together. Our Sanford Family is the heart of our organization. Their dedication to our patients, residents, communities and each other is embodied in our workplace culture. We remain committed to strategically managing our business in ways that advance patient and community health while serving as a premier employer in the region for decades to come.  

Lynne Fiscus, MD. President and CEO of UNC Physicians Network (Durham, N.C.): At UNC Health we are working to reduce the administrative burden on our teammates through expanded use of technology and further empowering our patients. Specific examples include the consolidation of central scheduling, providing convenient ways for patients to complete registration and screenings online in advance of their appointments, and continuing to utilize telehealth visits where appropriate since they take less time for providers to complete. Overall, we hope that these efforts will free up our staff for other tasks, improve the efficiency of our operations, and promote job satisfaction. 

Brian Peters. CEO of Michigan Health & Hospital Association (Okemos, Mich.): The Michigan Health & Hospital Association has prioritized healthcare staffing, and has been working directly with our members on many aspects of this issue. We successfully advocated for a total of $300 million in new state funding that has benefitted at least 69,000 healthcare workers for the purposes of recruitment, retention and training through Public Act 9 of 2022 and Public Act 5 of 2023. 

We also changed Michigan policy to allow our community colleges to offer four-year BSN programs and expanded the Michigan Reconnect program to allow funds to support Michiganders moving from a licensed practice nurse to a registered nurse, or from a patient care technician certificate to a LPN. We passed legislation modernizing the scope of practice for certified registered nurse anesthetists which allows flexibility for each hospital to choose the anesthesia care model that best fits its location, staffing and resources. And through our MHA Keystone Center, we have been providing emotional well-being support to healthcare workers through a partnership with the Duke Center for Healthcare Safety and Quality that has so far assisted 5,000 healthcare workers from 144 organizations throughout Michigan.

Paula M. Ellis, DNP. Interim CEO of F.W. Huston Medical Center (Winchester, Kan.): Our critical access hospital leadership is focusing primarily on managing labor costs by shining the light on retention efforts.  Our salaries are in line with competitors, but we lagged in benefits.  By increasing our 401K match, providing better health insurance rates, improving tuition assistance, and adding competitive scholarships we believe we can appeal to staff's desires for work-life balance, employer support, and educational/growth opportunities. Additionally, we had four positions that could reasonably be combined into only two positions. Staff were willing and able to take on new duties in exchange for a better schedule.  We believe the best method to manage labor costs is to retain staff.  

Richard Davis, PhD. CEO of Rochester (N.Y.) Regional Health: Like most health systems across Western New York, Rochester Regional Health continues to be challenged by some of the highest critical workforce shortages in the nation. In many areas, the projected need for qualified staff will continue to outpace supply well into the next decade.  

In response, we're transforming our operating model and focusing on tighter integration and innovation in talent acquisition, workforce development, and well-being. We have embarked on a transformation journey to reduce labor costs by eliminating premium contracts, innovating work redesign, and diversifying our talent pipeline strategies.  

We are expanding our international and U.S. territories' nurse recruitment programs to address our domestic nursing shortage.  As of July 2023, we have hired more than 475 international nurses to join our system in the coming months and years.

We've created a new in-house agency to significantly reduce our reliance on third-party contracts and improve staff integration within the health system to foster a more robust culture of collaboration, interdependency, alignment, and system-ness.

Also, we continue to work with over 45 regional academic partners to provide training and early career job opportunities across our health system. At the same time, we continue to expand our workforce development efforts through the health system's Rochester General College of Health Careers and Isabella Graham Hart School of Practical Nursing. 

Lastly, we're intensely focused on building a culture that values our team members and enhances engagement, well-being, and retention. 

Melisa Adkins. CEO of UofL Health – Mary & Elizabeth Hospital (Louisville, Ky.): This is a multifaceted question. Labor costs have been problematic for years and greatly exacerbated by the pandemic. Finding new ways to reduce costs has been imperative to improving the financial stability of our organization. Thinking outside of the box has been an important part of this strategy. 

In early 2020, I connected with an international nursing agency to help mitigate the staffing shortages before the staffing crisis truly began. This gave us an advantage of getting good candidates assigned to our organization before the excess demand occurred. It is a long-term strategy, but one that has been worthwhile. Forming internal agencies/float pools is also key. This will provide healthcare facilities the tools needed to offer competitive pay for staffing at half the cost by eliminating agency fees. 

Flexible shifts are also worth exploring and are something that has been proven to work in our facilities. Improving throughput/lengths of stay has been another initiative shown to decrease labor costs by decreasing labor demands.

Kenneth Waller, FACHE. CEO of Norwalk (Conn.) Community Health Center: An organization's ability to effectively manage and/or reduce labor costs is a strategic imperative. There are multiple influences that have contributed to hospital and health system networks' labor costs in recent years. This will include staffing shortages, economic uncertainties, shifts in patient demands, and rapidly emerging competition among healthcare-providing organizations. While these factors have caused fluctuations in health systems margins, service volume and revenues, healthcare-providing entities' overall expenses have continued to increase. 

To change this trend, Norwalk Community Health will establish and administer a comprehensive cost control strategy that will become a principal component in managing and reducing increasing labor costs. Our objective is to implement a cost data analytic capability to track cost and service utilization. Most importantly, NCH will establish and foster a culture of cost management that permeates the entire organization that supports the achievement of cost performance goals on a continuum basis. 

Rick Shumway. President and CEO of Stanford Health Care Tri-Valley (Pleasanton, Calif.), Stanford Medicine Partners: The labor market is exceptionally dynamic – what we used to be able to do annually to assess our current and future workforce situation now needs to be done on an ongoing basis due to the pace of change in this arena.  Our teams are our most critical asset, and ultimately determine whether or not we are able to accomplish our missions and visions, as well as maintain steady operations.  

In that spirit, one of the things that we do on a consistent basis is utilize our membership in the Vizient Operating Database to benchmark our labor performance  - at a very granular level -  to other like-organizations nationally. As we're all looking for creative ways to improve our labor cost performance and ensure that we have the right staffing and complexity mix, we have found that identifying the “high performers,” and being able to reach out to them to learn what they are doing has allowed us to implement innovative approaches to this challenging issue. It's also allowed us to share our best practices with others as well – a really symbiotic relationship amongst health systems trying to make the most positive impact possible.   

R. Kyle Kramer. CEO of Day Kimball Health (Putnam, Conn.): As the primary point of healthcare access for Connecticut's Northeast region and as the region's largest employer, Day Kimball Health is evaluating all aspects of its staffing program from prospective employee engagement to retention. Our approach includes advancing more focused recruitment and retention efforts within our region, while concurrently leveraging international candidates and longer-term contracts to introduce team stability. 

For example, we are proceeding to bring nurses from the international market into the organization to stabilize nursing services, This effort takes time and requires visa approval, and ongoing support to build a local culture.  As you know, the nation is facing a shortage of qualified, trained, and licensed nurses. There are close to 4,000 nursing positions open across Connecticut, and accredited nursing schools graduate close to 2,000 nurses per year so the demand is not being met by an adequate supply of candidates. The pandemic and the rampant expansion of travel nursing had caused DKH to experience a 60 percent increase in nursing-related engagement costs over the past three years. 

Obviously, compensation is a key element of staffing, and we are working diligently to ensure that we are competitive within our market. Concurrently, we are evaluating how we staff our clinical areas and the mix of professionals we utilize to create a stronger level of team support and patient engagement.  Ultimately, we see stabilizing our workforce and reducing turnover through retaining strong members of our clinical and operational team as the key to effectively managing labor costs in this new era of healthcare.

Jandel Allen-Davis, MD. President and CEO of Craig Hospital (Englewood, Colo.): I believe that our team members are our most important asset. We think it is important to invest in their growth, development and salaries, each of which creates a favorable work environment, one in which they are able to provide the high-quality neuro-rehabilitative care that distinguishes Craig Hospital. We plan to continue providing annual salary increases, and we stay abreast of market survey data in order to remain competitive in the current healthcare environment both locally and nationally.

In order to balance the reimbursement/expense challenges that this commitment creates, we scrutinize every vacant position and assess whether and when to fill it. We look for ways to optimize performance in a manner that doesn't sacrifice quality, safety, or the care experience by evaluating systems and processes to identify ways to do our work more efficiently. It's a tough balancing act and yet it is critical to making sure that we are here to serve future generations of people who need our highly specialized care…and that this care is delivered by the best in the field. Paying people fairly is one part of that equation.

Richard Duvall. President and CEO of Claxton-Hepburn Medical Center (Ogdensburg, N.Y.): Managing labor costs over the next several years will be increasingly difficult for our industry. In the environment healthcare organizations are currently operating in, we must remain focused on ensuring all areas of the organization are running as efficiently as possible with the correct staffing to meet the demand. We must continue to evaluate the services needed for our community and focus on providing those services and unfortunately for some organizations, it may mean no expansion or adding services just to stabilize staffing levels.

Sarah Morrison. CEO of Shepherd Center (Atlanta): Shepherd Center is using several strategies to reduce labor costs. First, we have implemented actions to reduce costly turnover. These actions include leadership development and flexible staffing where possible while still maintaining our incredible culture where staff continues to go above and beyond for our patients, families, and each other. 

Second, we have made a commitment not to use costly agencies or traveling nurses. To accomplish this, we have hired an additional nurse recruiter, instituted incentives for nursing to pick up extra shifts and we are now evaluating different nursing models of care.

Third, we are reducing PRN utilization as well as reducing overtime and premium pay (i.e. double pay). Lastly, for every position that becomes vacant, that position is evaluated to see if it could be eliminated. We will continue to look at strategies that will continue to move the needle to lower labor costs.

Dan Woods. CEO of El Camino Health (Mountain View, Calif.): Like nearly all hospitals, our nursing staff comprises the largest part of our workforce.  With the recruitment of a single nurse estimated to be nearly $60,000, our primary strategy to reduce labor costs is to focus on decreasing turnover. Our turnover rate for nurses is just about 8 percent while the turnover rate nationally is still running at 22 percent. 

We continue to chip away at our turnover rate by fostering a positive practice environment for our nurses. We achieve this by creating structures and enabling processes so our staff is engaged in assisting with making changes within their practice environments. Also, our staffing and scheduling processes promote efficiency while meeting the needs of our staff, which is also essential for retention. 

While self-scheduling helps staff have more control, we also have guide rails in place to ensure there is no self-scheduled overtime or other premium pay. Finally, positive labor relations are good for retention and controlling our labor costs. We just completed a new three-year agreement with our nursing union prior to the existing contract expiring and without strikes or the acrimony often associated with labor relations.

Mark Gridley. President and CEO of FHN Memorial Hospital (Freeport, Ill.): Our organization has focused on a journey of understanding the increasing demands on our team to include leaders who need to be empowered to ensure individuals are performing to the scope of their license, certification, or skill set. We look to “functional flexibility” in balancing the needs of the position as well as the person within reason. There is still far too much busy work and underutilization of our most precious resource which is our people. In addition, working to leverage automation is a tactic that we pushing further faster in the next 24 months.  

Kenneth Rose. President and CEO of Texas Health Hospital Mansfield: At AdventHealth, we are laser-focused on a nursing strategy as one of our key high-cost labor areas. Our equation is to: Use Less; Lose Less; and Hire More. The work of using less is being driven by more creative staffing models that are based on a team approach to care. Losing less means that we are focused on our culture, the effectiveness of our leaders and staying competitive with pay. These strategies are intended to reduce our clinical turnover. Lastly, hiring more is focused on unique hiring such as GNs, international nurses and entry-level nurses who will need to be groomed.

Etene Terrell-Fakorede. CEO of The Rehabilitation Institute of Ohio -  Premier Health, Encompass Health (Dayton): In our effort to reduce labor costs, we have placed a high focus on turnover reduction and employee engagement. We have held focus groups and town halls to learn exactly what matters most to our employees and made sure to deliver on what we have promised. Employee engagement will not only help reduce turnover but also lead to the recruitment of quality candidates, which will further our goal of providing the community with exceptional patient care.

Pradeep Kadambi, MD. President and CEO of University of Florida Jacksonville Physicians; Senior Associate Dean for Clinical Affairs of UF College of Medicine – Jacksonville: Since we are a service organization, labor is one of the major costs.

  • Clinical areas: While it is difficult to manage or reduce labor costs in the clinical areas, we are working to improve our efficiency and throughput.
  • Support areas: In areas such as billing and coding, referral and access management, we are centralizing the models to focus on customer service (internal and external), scale economies and cross-training. It has allowed us to maintain if not exceed our service commitment with less staff members. In addition, we are promoting automation where human interactions are not necessary. We are also evaluating the use of AI and its applications in some areas.
  • Administrative areas: We are also evaluating our organizational structure to make it lean, less hierarchical and more accountable. Senior leaders should be fully engaged, and be able to feel the pulse of the organization.

It will take some time for the savings to materialize, but this is the first step in the right direction.

Paul Kempinski. President and CEO of Children's Mercy Kansas City (Mo.): As a leading independent children's health organization, our goal is to create a sustainable cost structure that enables continued investment in our people, vision, strategies, programs, and infrastructure.

Typical of national trends, we have faced major workforce retention and recruiting challenges exacerbated during last fall's pediatric respiratory surge, resulting in significant labor cost increases.  While we are seeing steady improvement in workforce stability, we must be steadfast in ensuring that our labor costs are sustainable and contribute to an optimal financial performance that will propel our mission for generations to come.  Examples of our focused efforts include:   

  • Investing in management's capabilities to balance workforce needs and labor cost characteristics, while always keeping the child at the epicenter of decision-making.
  • Using our Lean Operating System to streamline processes and systems.
  • Using benchmarks to guide, but not prescribe decision making.
  • Advancing the use of real-time data and predictive analytics to inform staffing needs and streamline patient flow.
  • And most importantly, investing in our culture, to ensure that we recruit and retain great team members who are valued, engaged, and feel meaning and purpose in their everyday work.

Ray Moss. CFO and Chief Privacy Officer of Cleveland (Okla.) Area Hospital: Labor costs to our organization include the total compensation package, which includes benefits. Because we expect each year that to some degree health insurance premiums will increase, we have consistently looked at ways to hedge the increase. Two years ago, we went to a partially self-funded plan. Last year we went fully self-funded and as a company chose to absorb a large portion of the increase as part of the employer contribution. 

Going forward we are looking at reducing the payments from the plan by investigating excessive and inappropriate charging and coding from non-domestic claims as well as hedging out-of-pocket deductibles for our employees by means of a supplement or a buy-down on the front end. All in an effort to focus on employees allowing their dollar to go further rather than just being concerned with just the base.

Jim Heilsberg. CFO of Tri-State Memorial Hospital and Medical Campus (Clarkston, Wash.): The question of labor cost reduction in the current environment needs to focus on three areas:

-        Agency staff

-        Productivity for current staff

-        Refinement of existing or addition of new tools that will allow current staff to be more productive

We are developing strategies for implementation in each area.

Agency staff

  • We have implemented strategies that will increase the number of people in the graduation pipeline choosing our hospital for their first job.
  • We continue to work on methods to decrease costs for agencies with contract/price changes or elimination of contracts due to improved hiring results.

Productivity of current staff

  • We have reviewed and will likely be investing in data tools that will allow for improved efficiency based on comparison to other data benchmarks.
  • We intend to use that data to allow departments to improve productivity with current and new system tools to be implemented.

System Efficiency

  • We intend to look at workflow improvements targeted at operational and clinical areas that would allow staff to be more efficient. 
  • We have increased efforts to find tools that allow for support and clinical staff to do more with less over time.

In all efforts, any efficiencies found and realized are intended to be capitalized on to reduce costs over time.

Michael Archuleta. CIO and HIPAA & Information Security Officer of Mt. San Rafael Hospital (Trinidad, Colo.): At Mt San Rafael, we recognize that labor costs are a significant portion of our overall budget, and we are continually seeking ways to manage and reduce them without compromising patient care. In addition to the strategies mentioned earlier, we are implementing process improvement initiatives to streamline workflows and eliminate non-value-added activities, allowing our staff to focus on delivering care rather than administrative tasks.

We are also exploring opportunities for automation and technology integration to optimize operational efficiency and reduce manual labor. Furthermore, we are actively partnering with our clinical teams to identify opportunities for care standardization and evidence-based practices, which can help improve outcomes while managing costs. By taking a proactive approach to labor cost management, we are confident in our ability to achieve financial sustainability while maintaining a high standard of care for our patients.

Nicholas Holmes, MD. Senior Vice President and COO of Rady Children's Hospital (San Diego): At Rady Children's Hospital, we are focusing our efforts on streamlining our recruiting processes to get new hires into our system so as not to rely as much on temporary traveler labor. Once an applicant has completed their application, our goal is to have the application screened by HR, reviewed by the appropriate leader, the interview completed, and a hiring decision within two weeks. This focus on nurse recruiting has allowed us to significantly reduce our need for temporary traveler labor.

Jean Ann Larson, EdD. Chief Leadership Development Officer and Senior Associate Dean of Leadership Development of the University of Alabama at Birmingham Heersink School of Medicine, UAB Health System: Like most health systems and academic medical centers, we have many initiatives underway to better manage labor costs. One thing we are doing is taking the long view. We have a people and culture goal that says, “Become a magnet for individuals who thrive in a team-based culture where innovation, dedication, and compassion are valued.”  To create this culture, we need to develop our leaders so that they have the mindsets and skills to attract and retain employees who share our values. Those leaders also need the courage and skills to address behaviors that do not attract and retain the right people.  In my experience, it always starts and ends with leadership when we are creating a place where people want to come, do their best and then thrive.

John Erwin, MD. Chair of Medicine of NorthShore University Health System (Chicago): The first step has been to reduce the utilization of agency resources, which we've been very successful in achieving. While we explore AI solutions, our main focus is on employee engagement and retention. Turnover is obviously a huge cost for most employers.

Ron Amodeo. Chief Strategy Officer of UC Davis Health (Sacramento, Calif.): We are working to streamline workflows to better meet the expectations of patients. Sometimes this means adding jobs to fill gaps in service – exemplified through our strategy of building “integrated service lines” in cancer, stroke, epilepsy, and transplant. And sometimes it means transforming jobs to provide higher value (e.g., care at home, digital services, nudging, predictive analytics, diagnostic screenings) to patients, as healthcare too must change to keep pace with consumer expectations.

Susmita Pati, MD. Chief, Primary Care Pediatrics and Chief Medical Program Advisor of The Alan Alda Center for Communicating Science at Stony Brook (N.Y.) University: Our organization is focusing on improving workforce engagement to bolster recruitment and retention. Improving retention rates reduces the costs associated with turnover, including the costs of recruiting and training new hires. Moreover, an engaged workforce is known to have positive effects on productivity whereby the whole is greater than the sum of its parts.

Cristy P. Page, MD. Executive Dean, UNC School of Medicine; Chief Academic Officer of UNC Health (Chapel Hill, N.C.): Understanding that the most efficient way to manage labor costs is by retaining top talent, UNC Health and the UNC School of Medicine are both working to create a strong cultural identity where our teammates feel supported and empowered. We have updated and expanded our compensation models and benefits. In addition, we are providing expanded coaching, career, and skills development opportunities. We hope this results in a workforce that feels valued as individuals and deeply connected to our mission to serve the people of North Carolina.

Marianne Baernholdt. Dean and Sadie Heath Cabaniss Professor of Nursing, UVA School of Nursing and Kathy Baker, Chief Nursing Officer, UVA Health (Charlottesville, Va.): Thinking beyond recruiting to retention and career development, we are leaning into the inherent advantages we have as an academic medical center. Our UVA School of Nursing and UVA Health's Medical Center recently collaborated to create pathways for our nurses to access new career opportunities. 

We've developed a three-day boot camp in clinical instruction for interested nurses, most of whom now have teaching responsibilities at our School of Nursing for master's-prepared nurses, or at a local community college for bachelor's-prepared nurses. As part of a grant-funded pilot this fall, six master's-prepared nurses will start the Nurse Educator Academy, a three-course/nine-credit program that earns national certification as a nurse educator. They will subsequently have teaching responsibilities in the School of Nursing as part of their full-time medical center job. These programs expand working nurses' skills and help address the need for more nurse educators to nurture the next generation of nurses during clinical rotations, in the classroom, and in the simulation lab. 

These opportunities reflect UVA Health's investment in our community and our team members to help solve the talent pipeline challenge, limit turnover and reduce the need for contract labor. For instance, the Earn While You Learn Program hires community members into our health system and pays them to train on the job to become EMTs, CNAs, pharmacy techs, or other positions. We also want to cultivate talent internally and retain our next generation of leaders, which is why we're launching the UVA Health Leadership Institute later this year. By sowing these creative solutions now, we can expand successful programs and reap their benefits long into the future.

Chad M. Teven, MD. Reconstructive Microsurgeon and Clinical Assistant Professor of the Surgery Department at Northwestern University Feinberg School of Medicine (Chicago): To manage labor costs in the near and far term, we prioritize identifying employees that fit well within our system, particularly concerning our core values and mission.  Explicit efforts to recruit and retain individuals likely to be successful at our hospital will mitigate the enormous cost of labor turnover.  One way we aim to do this is to seek input from employees across all levels and areas of the organization regarding issues that are important to them.  We believe that proactively optimizing the work environment for current and future employees – specifically by listening to and addressing their concerns - will increase the likelihood of success in their roles and, more importantly, will lead to improved job satisfaction and is thus the right thing to do.  

Ewa Schafer, MD. Clinical Associate Professor, The University of Chicago Pritzker School of Medicine; Vice Chair of Outpatient Specialty Quality and Operations, Department of Medicine and Section Head Allergy and Immunology at Northshore University, NorthShore University HealthSystem (Chicago): Our primary goal right now is to reduce agency costs. Our acute care services have created an internal pool of nurses that floats to different areas and this has been working quite well. On the ambulatory side, we are looking at ways to improve retention, including flexible work arrangements, knowing that turnover is a significant driver of staff costs.

Ruben Azocar, MD. Vice President of Perioperative Services of Beth Israel Deaconess Medical Center (Boston), Harvard Medical School: (1) We expanded our in-house perioperative training for nurses and for LPNs to become scrub techs and (2) We created programs to convert per-diems and travelers into permanent staff.

Gian Varbaro, MD. Chief Medical Officer and Vice President, Ambulatory Services of Bergen New Bridge Medical Center (Paramus, N.J.): Our health system is trying to reduce labor costs in several ways. We are spending more on retention programs in order to have less turnover and need for less contracted labor. We also have partnered with some new outside companies that provide expedited recruiting. But most importantly, we are looking at efficiencies in every area, big or small to make the labor we do have able to do more with less burnout.

Jeffrey Hoffman, MD. Chief Medical Officer and President of Cambridge (Mass.) Health Alliance Physician Organization: CHA like all health systems has been adversely affected by increased labor costs primarily due to travelers. We are limiting the number of travelers we hire, developing our internal systems for developing ancillary staff as well as working with community fill positions. We have also, unfortunately, had to make some cuts due to costs. We looked hard at all positions and eliminated a great deal of open positions as well as looked at the work performed by existing employees. We reduced inefficiency by centralizing some services as well as making sure multiple positions were not performing the same tasks. Lastly, we are working hard to ensure everyone is working at the top of the scope of their practice which improves care, and job satisfaction and helps with costs. 

Scott Dimmick. Senior Vice President, Chief Human Resources Officer of Lakeland (Fla.) Regional Health: To help manage labor costs, we are reducing the use of contract labor and some premium labor rates, ensuring that we have efficient processes and workflows, optimizing scheduling and shift programs, further eliminating waste and rework, improving the electronic medical records and operating systems, identifying technology solutions that help increase efficiency and productivity, and looking for ways to deploy automation in core and supplemental processes. 

Angelo Milazzo, MD. Vice Chair, Practice and Clinical Affairs, Department, Pediatrics; Professor, Pediatrics, Division of Pediatric Cardiology of Duke Health (Durham, N.C.): Over the last several years, our organization has been buffeted simultaneously by the external circumstances of the pandemic and the internal stress of a major institutional reorganization effort which predates it. Workforce challenges springing from the public health emergency have rubbed up against an effort to develop and retain talent, elevate team members to the top of their professional scope, and maintain a high standard for employee experience while undergoing restructuring. Our aim has been to remain a healthcare employer of choice in our region.

In the last few months, we have rebuilt our nursing and support teams steadily. This work has included retraining initiatives, such as a program for staff assistants to transition to certified medical assistants. We have trialed a clinical support model using a centralized nursing team to triage patient-initiated requests, reducing some of the additional work of our in-office teams, and allowing us to run somewhat leaner while maintaining access and throughput. There is much more to be done.

Adrian Moran, MD. Chief Medical Officer of Aurora St Luke's Medical Center (Milwaukee):

  1. Create it as a priority
  2. Track at local levels and share to drive changes. Actions are then discussed at organized meetings for others to learn from
  3. Nursing
  • Drive college-hospital connections
  • Expand training programs
  • Extern program to encourage to stay at our hospitals
  • Immediate
    • Centralize staffing
    • Empower house supervisor to redistribute staff as appropriate, oversee overtime management and agency use in moment
    • Standardize pay escalation ladder and track
    • Sign off of agency use by CNO
    • Deliberate retention campaigns

Sunil Dadlani, Executive Vice President, Chief Information and Digital Transformation Officer, Atlantic Health System (Morristown, N.J.): Atlantic Health System has taken several steps to manage or reduce labor costs over the next two years. These approaches include workforce optimization, where staffing patterns and patient demand are analyzed to ensure appropriate staffing levels in different departments and shifts. Additionally, flexible scheduling strategies are being explored to match staffing with peak-demand periods and minimize overstaffing during low-demand periods. Workforce management software and predictive analytics are leveraged to optimize staffing needs and reduce unnecessary labor costs.

In addition, we are accelerating our efforts in utilizing hyper-intelligent automation process improvement to enhance productivity and reduce labor requirements. This can involve identifying operational inefficiencies, streamlining workflows, and automating routine administrative tasks such as appointment scheduling, billing, and data entry. Implementing digital health solutions and telemedicine platforms is also improving care delivery efficiency and decreasing the need for labor-intensive tasks. Investing in team member training programs, encouraging cross-training and multi-skilling, and promoting continuous learning and professional development can enhance workforce flexibility and effectiveness.

Vendor contracts, renegotiating terms, and consolidating purchasing and supply chain management practices are also helping in alleviating labor costs.

Mark Behl. Executive Vice President and COO of Froedtert & The Medical College of Wisconsin (Milwaukee): Labor expenses are always front and center for our health system. Representing nearly half of our budget, we simply must continually look for opportunities to reduce this expense. The explosive growth in contract labor during the pandemic exacerbated the need to manage, and more importantly, reduce labor costs in the coming years. Here are the key initiatives for us over the next couple of years:

  • Reduce the reliance on contract labor. This requires retention strategies, pipeline development, and talent acquisition and learning development investments.
  • Reduce premium pay. This has upside financially, but even more importantly, from an employee satisfaction standpoint. Healthcare workers are exhausted and burning out at alarming rates. Additional hours and shifts take a toll over time, and that time is now.
  • Reducing hours of operation, programs, and other services. We can do anything, but we can't do everything. We have begun to look at ways to reduce services in areas that are causing considerable strain on resources, premium pay, and contract labor. These are some of the most difficult decisions to make as executives, however, a system's ability to survive is dependent on having speed to execution.
  • Restructuring and transformation. We are looking at reducing duplicate operations, streamlining leadership structures, and revising our shared services model to better support the frontline workers. We are also looking to change the way we deliver care with the use of artificial intelligence, technology, and digital tools that optimize the experience for both patients and employees.

Jody K. Reyes. Senior Vice President and COO of Penn State Health, Milton S. Hershey Medical Center (Hershey, Pa.): Penn State Health has taken several steps to manage labor costs. Most recently, the system has partnered with a national healthcare benchmarking company to explore challenges and maximize strategy. We invited leaders from the benchmarking company to join our leadership teams for a multi-day on-site visit to help us better align with peers while also identifying solutions tailored to our unique needs. In addition, we are partnering with our HR colleagues to refine our retention and retainment efforts as we wean off agencies for staffing support.

Jeffrey P. Gold, MD. Chancellor of the University of Nebraska Medical Center (Omaha): Here are ways in which we are addressing labor cost issues…there are two thoughts to consider in our approach:

Do we focus on reducing the cost per unit of labor – cost per FTE, benefit costs per FTE, or do we focus on reducing the number of units?

The short answer is both…here's what we are considering and doing

  • Ways we are addressing the cost per unit: 
    • Provide optimal training and mentoring. Support each individual with state-of-the-art technology and equipment.
    • Evaluation of benefit programs to determine the value for the colleague balanced with the expense for the organization. Benefit programming must become more agile and meet colleagues where they are in their careers, no more one-size-fits-all benefits. We are evaluating the trade-off between wages and benefits.
    • Productivity in both clinical and non-clinical areas.  
  • Ways we are addressing the number of units:
    • The best way to address the number of units is through redesigning the care model – The redesign of the care model will help us analyze the critical tasks performed while a patient is hospitalized and evaluate the labor stack surrounding a patient while keeping in mind the academic mission:
      • What tasks can be added and/or eliminated?  Combined in a singular role?  How much of what we do for a patient is necessary and impacts actual care, patient outcomes, and academic teaching?
      • Are nurses working on top of licenses? Are support staff working on top of the license? What tasks can be delegated to other care professionals or support staff?  How can we reskill staff based on capabilities versus licensure requirements? Will we have to address state regulatory licensing requirements?
      • Are we providing the very best in technology support to eliminate wasted effort and optimize care outcomes? Can we use generative AI to automate aspects of care, documentation, etc?
      • How do we incorporate virtual nursing and other technologies to leverage skilled nurses who may have physical limitations or are aging out of the workforce?
      • Can we better manage to staff them with flexibility in scheduling?
  • Evaluating fixed labor cost departments and roles. Slow or eliminate FTE growth to force innovation, organizational redesign, use of technology, and productivity gains
  • Evaluating all clinical programs to determine the priority of investments and de-emphasis on programs that may be duplicated or no longer necessary.

William Morice, MD, PhD. President and CEO of Mayo Clinic Laboratories/Mayo Collaborative Services (Rochester, Minn.): Mayo Clinic Laboratories recognizes the importance of advancing cost efficiency while also delivering the highest-quality patient care. To achieve this we are leveraging automation, digital solutions, and embracing test and learn approaches. By looking at areas of inefficiency or opportunities for process improvement, we are able to make data-driven decisions that enable our staff to be engaged with meaningful and gratifying work that also aligns with our cost-saving objectives.

David Lenihan, JD, PhD. President and CEO of Ponce Health Sciences University (St. Louis): We are looking to expand our labor costs over the next two years as we are expanding our offerings. The real question is are we planning on reducing our percentage of labor costs when compared with revenue growth? Again, the answer is no because we need to advance these funds ahead of the growth. The key is to mitigate the risk in case the growth does not occur. For this risk mitigation, we are adapting digital educational assets to stabilize labor costs and diversifying our business offering to help act as a buffer should one division not meet expected growth projections.   

Jennifer Schneider, MD. Co-Founder and CEO Homeward (San Francisco): Homeward is a value-based care provider focused on rural communities. Given the biggest problem in rural America is the lack of access to care, our care model is built to expand access while meeting the needs of the communities we serve. At Homeward, we use technology to reduce the administrative work that often burdens clinicians today. This is especially important in rural communities, which have half as many primary care providers and one-eighth as many specialists as in urban areas. 

To increase access further, Homeward utilizes a hybrid care model combining virtual care with access to in-person visits – in physical clinics, using mobile clinics, and in the home – to help reach people exactly when and where they need it. While this multimodal approach helps us improve access for patients, it also increases complexities. As such, we built a tech platform that uses predictive analytics to improve scheduling while understanding patient needs and surfacing the right care provider at the right time. We can incorporate large language models to improve efficiency further by streamlining clinical documentation, interpretation, and more.

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