Many hospitals are offering higher pay to attract and retain staff amid a nationwide staffing shortage—and the trend isn't likely to reverse any time soon, Alex Kacik reports for Modern Healthcare.

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Hospitals struggle with labor shortages

According to a Kaufman Hall poll, nearly all of the 73 health system administrators surveyed said they have experienced difficulty filling vacancies for both clinical and support staff.

"Labor shortages are management's top one, two, and three priorities at the moment," said Kevin Holloran, senior director at Fitch Ratings. "It is absolutely a chronic problem."

In particular, many nurses, technicians, and other health care staff are leaving the industry for less stressful and more lucrative jobs in other sectors.

In addition, labor shortages are affecting hospital referral partners, such as behavior health and long-term care facilities, Kacik reports. This may lead to longer hospital stays for patients as clinicians struggle to find appropriately staffed facilities to transfer them to.

"Staffing shortages are limiting the volume of services that can be provided, while support staff shortages in areas such as environmental services, for example, are making it more difficult to turn over patient rooms in a timely manner," said Lance Robinson, a managing director at Kaufman Hall.

Hospitals turn to new strategies to retain workers, reduce costs

To address labor shortages, around 75% of surveyed health system administrators said they raised clinicians' base salaries, and almost 90% said they raised wages for support staff, Kacik reports.

In addition, nearly 60% said they paid staff for more overtime hours, and more than two-thirds said they offered signing bonuses to attract new workers.

"Wages are likely resetting at a higher level across the board," Robinson said. "Shortages of clinical professionals may encourage efforts to widen the pipeline for new professionals."

Providers may also turn to automated services or outsourcing to reduce labor expenses, Kacik reports.

Beyond the workforce challenges, many health systems are struggling with persistent supply shortages. At least 81% of respondents said they recently experienced shortages of necessary items, faced significant price increases, or stockpiled their inventories amid Covid-19.

To address the problem, many health systems are moving away from a "just-in-time" approach to inventory and keeping more robust stock in their warehouses and reserving capacity on manufacturing lines, Kacik reports. In addition, some health systems are experimenting with 3D printing to make personal protective equipment and partnering with some U.S.-based manufacturers to prevent potential overseas supply chain delays.

"I think you're going to see some combination of old and new approaches to manage uncertainty or the swings in demand that contribute to the bull-whip effect," said David Dobrzykowski, associate professor of supply chain management at the University of Arkansas. (Kacik, Modern Healthcare, 10/18)