Three Steps to Navigate the Perfect Storm of Clinical Workforce Shortages

by Byron Jobe

Vizient President and Chief Executive Officer

Tell me if this feels familiar.

In a landmark report, the Institute of Medicine released its Future of Nursing analysis replete with the latest trends and recommendations to keep the field of nursing moving forward. Among other insights, the report calls for a substantial increase in undergraduate and doctoral nurses to stave off a forecasted shortage of 260,000 registered nurses. Such a shortage would be twice as large as any since the 1960s.

This may feel familiar because it aligns with what some are calling the second pandemic – an unprecedented clinical workforce shortage that extends far beyond nurses to physicians, lab techs, advanced practice providers (APPs), maintenance staff, and more.

It may also feel familiar because this report is not new. In fact, it was published nearly 12 years ago.

Fast forward to today and the pandemic has become the tipping point, creating a perfect storm of staffing issues, patient safety concerns, and financial dilemmas. More recent numbers project a shortage of more than 100,000 physicians over the next 10 years and the need for at least 200,000 nurses per year to meet demand.

Regarding patient safety, 4 out of 5 clinicians say shortages have impacted their ability to work safely and to satisfy patient needs. This reflects Vizient’s data showing increases in certain hospital-acquired conditions as facilities handle higher occupancy rates with fewer and less experienced staff.

Finally, this confluence of events ultimately takes a toll on hospital and health systems’ bottom line. A Vizient analysis of academic medical centers shows increased turnover, contract labor, and overtime are driving up median labor costs by 10% per patient day.

Dr. Tim Babineau, President and CEO of Lifespan Health System, describes the situation as “the most important topic in American health care right now. At the risk of sounding dramatic…we’re experiencing a crisis. And we use the word crisis deliberately.”

The current workforce shortage may feel familiar, but that doesn’t mean answers are easy or obvious. Navigating the storm requires a comprehensive approach with a long-term mindset around three main components: Recruit, Retain, Reimagine.

Recruit

According to Vaya Workforce Solutions, a leader in health care contract labor management, available travel nurse positions increased 394% from 2019 to 2021, and demand for travel behavioral health nurses doubled in one week. However, this demand comes at a premium, with the cost for travel nurses doubling from pre-pandemic rates.  

As the current labor landscape forces hospitals and health systems to reevaluate their approach to recruiting top talent, the first step is to eliminate friction. Bolstering current recruitment processes can help identify bottlenecks and potholes that may deter potential candidates on the road to employment. Kaufman Hall offers a few considerations for improvement:

1. Evaluate Recruitment Team Resources, Roles and Responsibilities – Ensuring appropriate staff to handle the recruitment workload and establishing clear lines of responsibility for each person involved in the employment process will ensure consistency in processes as well as help avoid redundancies that waste valuable resources. For example, consider allowing recruiters to negotiate job offers rather than hiring managers, as recruiters may have additional training and can help ensure greater consistency across offers.
2. Audit Job Postings – Controlling the number of job openings beyond a certain time frame can reduce workload. Using algorithms to prioritize high-need roles can concentrate recruitment efforts around alleviating expensive contract roles and overtime expenses.
3. Leverage New Hires for Insights – New recruits are often a useful source of information about the hiring process. Take time to survey their experience for key metrics, such as ease in navigating the application website, time from application to offer, and quality of job description and requirements.

Retain

The best way to temper the recruitment rush is a strong retention strategy. However, that’s certainly easier said than done with burnout on the rise and nurse turnover doubling since 2019, according to Vizient data. Research shows the average cost of turnover is $88,000 per nurse and as high as $1.5 million for a physician.

When addressing retention, hospitals and health systems must first ensure they fulfill baseline requirements like market-competitive pay and benefits. But compensation is just the first step. Our research shows implementing a well-organized onboarding process during the first year of employment can directly improve retention. For organizations that have an existing onboarding program, consider this checklist to see what areas could be improved.

For nurses specifically, Vizient data shows that nearly 18% of new-graduate nurses leave their first nursing jobs within the first year. This typically stems from a lack of professional training and support as they transition from academia to the clinical setting. However, programs like Vizient’s Nurse Residency Program (NRP) and APP Onboarding Program serve both new graduates and organizations through hands-on training and evidence-based curriculum. In 2020, the new-graduate nurses who participated in the NRP had a 90% retention rate.

Reimagine

As care delivery continues to shift away from the hospital to outpatient and home settings, Sg2 forecasts a 25% growth in ambulatory surgery center volume and a 14% growth in home care for seniors over the next 10 years. To address these trends, reimagining staffing for new care models – where practitioners are operating at the top of their license – offers flexibility for both inpatient and outpatient environments.

What’s more, a Vizient analysis of ambulatory clinics found clinics staffed with a combination of APPs and physicians have a 90% improved operating margin over physician-only clinics. The key is fully optimizing APPs to the top of their skill set, which includes integrating them as part of the provider team and allowing them to see new patients. Similarly, one organization in the analysis leveraged their nurses to perform all Medicare annual wellness visits, transitional care, and chronic care management visits, resulting in the lowest lag time for established patients.

The Silver Lining

Towards the end of its Future of Nursing report, the Institute of Medicine calls for new systems to monitor market forces that could worsen workforce shortages. I don’t think a global pandemic was on the shortlist of ‘market forces.’ But if there’s a silver lining to this perfect storm, it’s the opportunity to transform our mindset from getting “back to the way we’ve always done things” to doing what is best for the patient. With that perspective, we can take on the workforce challenges of the present and future with great confidence.