After years of workforce volatility and premium labor costs, Hackensack Meridian Health is seeing measurable results from a focused stabilization strategy, including a $41 million reduction in contracted labor and agency utilization last year.
Regina Foley, president of specialty hospitals and clinical services and chief nurse executive of the Edison, N.J.-based system, said the turnaround began with a clear priority: stabilize the nursing workforce and rebuild retention.
The system’s nursing vacancy rate now sits at approximately 4%, with two hospitals operating below that level. Retention has also strengthened across the organization, reducing reliance on costly agency staff. In an environment where labor remains the largest expense line for most hospitals, those gains translate directly to margin protection.
“Behind the scenes, there’s different kinds of unique programs to help on the retention and recruitment side because our care is local. Our team members are local,” said Ms. Foley during an interview with “Becker’s Healthcare Podcast.” “We’re very much community based. Our physicians and team members are local, and the patients are living within the communities they’re practicing in. We have different programs in place to ensure that if someone wants to go back to school for a second career choice, how do we support them to do that? If they always wanted to be a nurse, we mentor and figure out different ways, whether through tuition reimbursement, scholarships or bonuses, for them to do that.”
Hackensack Meridian spans 18 hospitals, 500 locations and 38,000 team members across eight New Jersey counties. Like many systems, it experienced significant workforce strain during and after the pandemic. While compensation adjustments and recruitment played a role in recovery, that stabilization required more than pay increases.
“The workforce wants to feel respected, appreciated, and that their opinion counts,” she said.
Senior leaders, including the CEO and COO, regularly round in hospitals. Many Hackensack Meridian executives, including Ms. Foley, rose through clinical and operational roles within the system. That credibility reinforces trust during periods of change.
“Culture really sets the tone of how you’re able to really move the needle in your organization, whether it be workforce, whether it be financial results or a situational issue,” she said. “You’re able to see very clearly in a quick period of time when everybody’s on the same sheet of music and moving in the same direction. How do you make things happen in a very short period of time? I would say the definition of that is having a healthy culture.”
Reducing turnover also improves consistency in patient care and lowers the indirect costs associated with onboarding and overtime. As agency utilization falls, clinical teams experience greater stability, which can improve both patient experience and employee engagement.
But the health system’s transformation goes beyond recruitment and retention. Hackensack Meridian recently eliminated its regional administrative structure to create tighter integration across the system. Ms. Foley said that cultural alignment and workforce stability make those broader organizational changes easier to execute.
“We keep care as local to the patient or community as possible,” she said. “Administratively, we’ve organized that our acute care hospitals are one side of the house and then areas like specialty hospitals or clinical services, that’s what I have responsibility over. It’s really allowed for further integration, continuity and transparency of information and timeliness which helps us with caring for our patients.”
Technology also plays a role in the workforce transformation. Hackensack Meridian launched virtual nursing two years ago and now have 147 beds in four different hospitals activated with the program. Virtual nursing eases the administrative burden of caring for the patient and adds monitoring capabilities for patient safety.
“We’ll monitor it for a solid year to make sure it’s working for the 147 beds in four different hospitals, and we’re in the process now of evaluating to see if that’s something that should be expanded or not,” said Ms. Foley. “Leveraging technology to lighten the load for individuals that are patient facing, it could be a doctor, nurse, an APP or partner in care. One of the biggest priorities or headwinds would be leveraging technology and advancing technology we have in place as we’re monitoring it and measuring the benefits and seeing what could be expanded. You can’t underestimate the power of AI.”
Hackensack Meridian is using Epic’s generative AI for nursing notes and end-of-shift notes. But it took time to accept the technology.
“If you would have said five years ago, are we going to be leveraging AI at the bedside, I would have said ‘I don’t know. I’m not quite there’,” said Ms. Foley. “Now we are an early adopter and the answer is ‘yes’ because AI can really be another partner in helping the nurse or clinician care for the patient.”
There is a lot of soft ROI from these projects – nurses are more satisfied, there is less overtime because changes are quicker, the health system is able to retain nurses longer. But Ms. Foley knows she needs to quantify hard savings associated with retention programs, virtual nursing and AI note taking.
“We are in the process of doing that now and it’s hard because there’s a lot of soft savings associated with virtual nursing, but the CEO and board are going to look for hard savings,” said Ms. Foley. “Those are tough because it’s a delicate balance to be innovative and bring technology to the bedside. Now that we have it, how do we expand it? I’m going to quantify that with hard savings and that’s certainly a big nut to crack this year.”
