The health care industry has long been challenged with workforce issues: high turnover, recruitment and retention, escalating wage growth, and low morale. Health care executives and human resource leaders could not imagine these challenges getting much worse, then along came COVID-19. Now surveys across the industry are indicating workforce issues are the number one challenge facing many provider organizations.
In this podcast episode of Value-Based Care Insights, Daniel J. Marino speaks with John Malone to highlight the extent of the COVID-19 impact and example solutions that work to address workforce challenges. Key points include:
- The importance of empowering frontline supervisors and managers to decrease burnout, and improve retention and turnover with a sense of ownership and decision-making authority
- The standardization of workflows to move work processes down to the appropriate resources to address staff burnout and dissatisfaction
- Tailored retention strategies based on key workforce metrics that are accurate and understood by management
- The conscious awareness of a positive culture leading to a high-performing organization
Daniel J. Marino
Managing Partner, Lumina Health Partners
Principal, Lumina Health Partners
Thank you for listening to Value-Based Care Insights, a podcast by Lumina Health Partners. In this series, host Daniel J. Marino, managing partner of Lumina, talks to top experts and thought leaders in health care to help you navigate on the journey to value-based care in an ever-changing landscape. The goal of this series is to bring you disruptive success strategies by leveraging Lumina's experiences, stories, and insights from working with health professionals and organizations across the country. Before we get into today's episode, I'd like to invite you to leave us a review on Apple podcast and let us know what you think about the episode in any questions that are top of mind. Now let's get started.
Dan Marino: Welcome to another episode of value-based care insights. I'm your host Daniel Marino. In today's episode, we're going to discuss the impact of the economy of our health care industry, as well as COVID, that is being placed on our workforce today. Many hospitals, as we've all heard, are challenged with not only keeping staff, but certainly recruiting staff. And what many hospital leaders have discovered is not only is it difficult to retain staff due to all the challenges, the clinical challenges, the burnout challenges related to taking care of patients, as well as COVID. But now all of a sudden, we're faced with some competition from the non-traditional providers, most of that is related to, I think the wage inflation that we're seeing, or benefits, or frankly, staff just being burned out. So in joining me in today's episode is my colleague, John Malone. John and I have worked together for many years and he has a lot of experience in re-engineering operations, and certainly has addressed many issues related to workforce in hospitals and health systems. John, welcome to the program.
John Malone: Dan, thanks. It's great to be here. And thanks for having me.
Daniel Marino: So John, maybe we could start with, you know, some of these key issues that we're seeing across the country. Before COVID hit, burnout was always an issue, particularly for physicians. And, you know, we saw a certain level of burnout, for instance, in the nursing staff, but it seems like now, post COVID, those issues are even much greater now. And not only is it affecting the culture of organizations, but it's really, tough for organizations to recruit new people, or to really just address some of those issues. What are some of the things that you're hearing you're seeing across the country?
John Malone: Dan, it's been quite a ride, hasn't it for the last couple of years? Your point about the fact that this is not a new phenomenon, that being workforce challenges around turnover and burnout, and those kinds of challenges, it's not new. Although it's definitely been increased as a result of the COVID pandemic. I think it's really important to keep in mind the broader economic context, the macro-economic context that we're working in. The great resignation, as it's referred to, is truly a national phenomenon. And in health care, since February of 2020, hospital employment has decreased by nearly 94,000 people. And that includes a decrease of over 8,000, just recently, between August and September of 2021. So we're definitely seeing broad macro-economic impact here. But as we said, this is not a new phenomenon. There's been significant turnover for quite a period of time in both nursing and physician in both nursing and physician professions. For example, nursing turnover rose, for six years preceding the pandemic, it went from 13.5% in 2013, to over 16%, in 2019. And now, it's gone up an additional 2.8%, almost 3% during the pandemic, and was running nearly 19% at the end of 2020. For nursing, so we've seen a tremendous impact as a result of COVID. But this is a problem and a challenge that the industry has been facing for a number of years, Dan.
Daniel Marino: Well, you're absolutely right. And certainly before COVID, the turnover rate and even recruitment was a challenge. And it seemed like before COVID, you know, hospitals were competing against other health care providers. I can remember running my practices and we were, you know, when we were recruiting nurses or LPNs, or even frontline staff, you know, we look to recruit from other health care organizations. And if we lost people, we often lost people to those other health care organizations. But now it seems like it's really, it's different. Not only are we potentially losing people to other health care organizations, we're losing people to these non-traditional providers, like the Amazons of the world, and Google and so forth, who are offering incredible wages and benefits for that matter. And it's really creating a whole new sort of wrinkle on our ability to recruit and to retain.
John Malone: It's, it's multi-dimensional, isn't it? Because you not only have the impact in recent years of the pandemic, but simultaneously, all these alternative types of competitors are coming into our space, creating opportunities for our staff to look at new and interesting, and in some cases, they perceive those kinds of opportunities as exciting and something to definitely look into as part of their career progression. So it's definitely a challenge to have these additional players come into this space.
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Daniel Marino: Yes, absolutely, right. Let's talk for a few minutes about burnout. You know, one of the things that we both seen, you know, for many years is that physicians in particular have been challenged with electronic medical records, and you know, pressures from patients and staff to address some of the clinical issues, issues around productivity and so forth. So, burnout with physicians, I think, is has always been there. It's something that, you know, the industry has tried to address for some time. But it also now seems like there's a lot more non physician burnout challenges that are occurring. Any insights to the issues of physician burnouts, what are the some of the things that you were seeing, and what are some organizations doing to address those?
John Malone: Great question. I think it's important to start with understanding the huge impact, that burnout and high turnover has in terms of the burning platform, and the cost impact that this has on our client hospitals and health systems and physician groups. Currently, hospitals and health systems across the country are paying an estimated 24 billion more per year for qualified clinical labor than they did pre pandemic. So the cost of burnout, and the cost of turnover is incredibly high.
Daniel Marino: Oh, it's incredibly high. Absolutely. And I think when you see what the implications are of that related to low productivity time, or the vacancy rate turnover rate, I agree with you, it's incredibly high.
John Malone: And it's estimated right now, that to replace physicians, on average, is nearly a half a million dollars.
Daniel Marino: Yeah. Oh, I can imagine that. And I think just to recruit physicians into the industry, or into the organization, as well as then helping to build their practice. Yeah, you can see where that is. And I would even think that it would be higher in rural markets, then it would even be in the in some of the larger metropolitan markets.
John Malone: Absolutely. It's a challenge everywhere. I mean, if you have to take into consideration and we help clients think through the cost of turnover, if to take into consideration that the not only the recruitment costs, and the sign on bonuses, we have to consider loss billings, during the transition. And all of the costs associated with onboarding physicians takes time to bring them up to speed. So there's tremendous dollars involved here. And the same goes for nursing. By the way, it's estimated, on average, it costs about $40,000 to replace a nurse, and a 1% reduction in nursing turnover translates into nearly $300,000 of savings for most organizations. So there's a way to quantify the impact of burnout and turnover, and a way to cost justify and build, sort of return on investment models to justify addressing these issues with a whole host of solutions.
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Daniel Marino: Right. Yes, absolutely. So I was getting back to kind of addressing burnout and I guess maybe the vacancy rate, It’s an interesting conversation with one of our clients who was a Vice President of Human Resources. And she were doing some really interesting things. One, she was focusing on giving middle managers more of the ability to address some of these issues with burnout, and some of these staff related issues. But the interesting thing that she had mentioned to me was that, they had a pretty good, pretty high vacancy rate, I think they were talking in some departments, it was about 8 to 9%. And although they were recruiting for that, the approach that they were trying to take was one around re-engineering their operations, putting in place some aspects of say, improved operational effectiveness, that help them perform more efficiently, and almost redesigning their operations to the current staffing levels, as opposed to focusing 100% on recruitment. I thought that was an interesting approach. Are you hearing any of this? What are your thoughts with that?
John Malone: Yeah, that's an excellent example of an organization that's already moved to beyond. There's the traditional solutions to these kinds of challenges. And what I mean by that is that the first thing that comes to mind for most people is let's throw more money at the problem, let's pay more, let's improve our total rewards package to include better you know, let's look at benefits, and bonuses and profit sharing and those kinds of ideas incentives, and let's make it all about the sort of the traditional HR solutions, if you will. But what we're finding now is that the, the challenges have become so acute, that organizations have to move beyond those traditional solutions. And like, in the example you gave, empowering frontline supervisors and managers, is an incredibly important and creative step that organizations can take to improve burnout, retention turnover, all of the issues, because the most important person to an employee, in terms of their job satisfaction, and engagement is their direct supervisor. They're always the most important person. So if an organization can empower those individuals, the frontline supervisors, to a new degree, where they have the ability, and they're empowered to identify one on one with the groups that they supervise, what their challenges are, what their needs are, listen to them, hear their needs, and be creative in terms of finding solutions, and letting them find solutions independent of having to go up the chain for eight levels of approval, has really made a positive impact for some of our clients.
Daniel Marino: Yes, I agree. I couldn't agree with you more, I think empowering the middle managers to make some of those decisions. I mean, frankly, they're living those operations, issues, day in and day out. And they're the ones who, frankly, either know how to solve the problem, or if given the right tools can easily solve the problem. But I think if we're thinking about really addressing some of the workforce related issues, right, and we talked a little bit about what some of those were around turnover rate, and vacancy rate and burnout and competitive nature and culture, which is one thing I want to address in a second, I really think we need to take an innovative approach on how we're going to address this. And in my mind, it comes down to three things, it comes down to the technology. And if we can implement technology to make things more efficient, that's going to help, it's going to come down to reengineering our operations. And if we can think about how to do things different maybe like implementing a strong call center, as opposed to doing registrations and scheduling in every single location, that's one way of being able to think through it. And then third is this training, giving the right level of training, giving the right level of tools, empowering the staff to make decisions. So they feel like they have a sense of ownership. Those are things in my mind, John, that really are what's going to be needed to address these workforce issues.
John Malone: Absolutely. You know, connecting that empowering the supervisor. To those things you just outlined. It's it's really clear that employees when listened to not only make it about their individual needs, but they also come up with great ideas and suggestions for improving workflow, improving the work environment and trying to create an overall better process for employees and providers and patients. So one example that comes to mind, building on your thought around improving technology and improving process flows, we had a recent client, a large urban teaching hospital in the Midwest, that had identified for physicians, their number one dissatisfier there was the administrative workload that they had to do every day, especially related to their EHR inbox. And they identified that a lot of physician burnout and dissatisfaction is coming from physicians not having enough time with patients, because they were spending so much time in their inbox. And so they've been looking at ways of standardizing workflows and moving work processes down to the appropriate level of skill and resource. And in some cases, having MAs do some more of the documentation in support of the providers under their direction. There's a lot that can be done in that space. And in fact, there's new best practices emerging in terms of that kind of process flow that we can help organizations look at them and consider for in terms of the solutions that might help them with their physician burnout and dissatisfaction.
Daniel Marino: Well, that's a great example. Because I'll tell you, I have a lot of physician friends, and the number one bane of their existence is their EHR inbox. And, you know, I was talking to one friend of mine, and, you know, she's got a great practice, but day in and day out, she's clearing out her inbox till 10 or 10:30, at night, and, you know, how long can you do that before it just overtakes you, it's just a killer. So one of the things that I want to also address is, a lot of times through the conversations I'm having with leaders, they recognize that they have a problem, right, that workforce is an issue and turnover rate is high. Their vacancy rate is high, they're having trouble recruiting. But one of the big challenges that have been asked of me in particular is, how do they know where the root problem is? How can they figure out what the cause is? Many strong leaders recognize that you can't just solve for the symptom, you need to solve for the cause. Any thoughts there in terms of some approaches that leaders can take to start identifying where some of these issues really resulted from?
John Malone: Absolutely. So I'll speak to it in two parts, sort of, overall, what best practices are. And then secondly, I'll make mention of a particular tool that we have that may be helpful to some organizations, generally, in terms of best practices you want to use. And I think we mentioned this earlier, you want to use a data driven approach, to ensure that the key workforce metrics that you're using are accurate, that they're understood by management, and that they're accurate enough that they can be used to set improvement targets, so that you can see the improvement and the impact on these metrics, you can see the needle move, if you will, the improvement in these. The second is you got to listen, listen, and listen, survey, focus groups, exit interviews, you really need to understand the needs by staff and by staff type, you kind of need to segment your employee groups kind of like you segment your market and really understand their unique and specific needs. And then tailor retention strategies to those specific needs. Now, obviously, your medical staff is going to be different than your nursing staff, which is going to be different than your frontline employees. So there's a need to understand those differences. And then you want to build solutions and test those solutions with impacted employee groups and build those solutions jointly with them. And this is especially true with medical staff. If you're trying to solve burnout and turnover challenges and listen to their needs and build solutions specifically targeted to those needs. They need to be in the room when you're developing the solutions.
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Daniel Marino: Oh, absolutely. I mean, to engage them is the only way to do it. Because then, if not, then you're creating something around them and they're not going to have the buy in. They're not going to understand it and certainly they're not going to be successful with it.
John Malone: Yes, exactly. So those are sort of some of the higher level best practices that you know, need to be incorporated into any kind of solution design and implementation. We have come up with a medical group workforce assessment. In general, it's a workforce assessment that does a flash discovery, identifying what the issues are, and suggest some potential rapid improvement opportunities and focuses on operational effectiveness. So with this, you can get great measures that are accurate, identifying and quantifying the scope of the problem. And then some potential quick it solutions that can be implemented, that will kind of get you on your way to developing longer term solutions.
Daniel Marino: Well, at least something like that tool helps you quickly spot check what's occurring, but probably more importantly, begin to help identify where some of those root cause issues are occurring. And that's frankly, what you have to address for the last couple of minutes talk about culture. Culture is an issue that every organization, every leader you talk to, is always full focused on improving or enhancing the culture of their organization. And obviously, there's a lot of literature out there that says, a positive fulfilling culture is obviously drives a lot of high performance for the organization. How do you start to address the culture issues related to some of these challenges around workforce?
John Malone: I like to think of culture as behavior, observable behavior that determines or you know, organizational effectiveness, employee and physician nursing satisfaction, and patient satisfaction. A great example of that is the work that we've done on the west coast with a large university teaching hospital, in their nursing organization, they had become extremely decentralized, which resulted in unit managers having full control over in broad decision making freedom over staffing, productivity, and workflow processes. And so that resulted in quite a wide range of productivity turnover staff and patient satisfaction from unit to unit. And the nursing organization decided that that was a cultural norm to allow their managers that kind of freedom, but that it had become a negative in the sense that it was too decentralized. And so their culture change was to work on bringing together those units determining the best practices from across the organization internally, and then beginning to standardize on those to create a more consistent approach on a day to day basis.
Daniel Marino: Yes, that's a great example on how the operational impact and some of the changes would impact culture. And I really believe that with any type of an assessment, any type of enhancement that you're going to make to workforce, you have to keep the culture in mind. I think by doing that, it really helps you make some quick strides. Well, John, this has been great. I appreciate your time, clearly, you got a lot of insight on this, and definitely an area that you're passionate about. I really appreciate it. Any final thoughts or piece of advice that you may have for our listeners related to maybe addressing some of these workforce issues?
John Malone: Well, yes, I guess we could go on for a long time on this. But just to reinforce that last point around culture, you know, even just changing the way the organization approaches, addressing burnout and turnover, is a culture change in the sense that if you start using data better, and start using technology better, and start listening more intently to the needs of your employee groups, then you're by definition, you're doing things, you're changing your behavior to be more attentive to those needs. And that's just a great example of how you can really move the needle in your organization.
Daniel Marino: Oh, absolutely. Well, John, I want to thank you again, for joining us today. Clearly, workforce, if it's not the top issue in hospital and health care systems, it's got to be in the top five, no doubt about that. So thank you again, for your time. I really appreciate it.
John Malone: My pleasure. Dan, Thank you so much for having me.
Daniel Marino: So as John mentioned, a couple of key things that I think were really relevant in our discussion. And it's really around how we not only identify issues of workforce, but address some of those issues, in particular burnout and thinking about it in terms of staff burnout and physician burnout, obviously, recruitment and retention is going to be a big issue, and then really addressing the issues of culture. But if you think about it, we have to think about doing things differently if we're really going to resolve the issues of workforce, post COVID is going to be different than pre COVID. And we have to think about reengineering our operations different, and frankly, just delivering care differently. And it really comes down to the three things we talked about advancing technology, reengineering our operations, and then really giving or empowering our middle managers and our teams to really solve these problems. I know this is going to be a topic we're going to talk about, again, into the future. So if anybody has any thoughts or comments, please don't hesitate to share. Always love to hear comments. Again, I'd like to thank my colleague, John Malone for joining me today. And until next time, I'm Daniel Marino. Be safe, be well, have a great day.
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About Value-Based Care Insights Podcast
Value-Based Care Insights is a podcast that explores how to optimize the performance of programs to meet the demands of an increasingly value-based care payment environment. Hosted by Daniel J. Marino, the VBCI podcast highlights recognized experts in the field and within Lumina Health Partners.