Staff Utilization and Its Impact on Your Healthcare Enterprise

Let’s face it, 2020 was rough. And the healthcare industry was hit especially hard – continuously addressing shifting priorities to ensure the safety of patients, residents and staff. That’s no small task even in the best of times, not to mention while fighting a global pandemic.

Healthcare organizations were already facing significant challenges prior to Covid. Systemic labor market challenges such as turnover and high vacancy rates, coupled with internal organizational challenges and shifting compliance requirements, were already wreaking havoc on many organizations’ ability to recruit, retain and grow their staff to meet growing healthcare demands. And then Covid-19 struck.

According to most economists, a healthy economy has an unemployment rate that hovers around 4%. Prior to Covid, the healthcare sector was already dealing with an average unemployment rate of just 1.3%. And, low unemployment is not the only systemic labor challenge facing hospitals, senior care organizations and other health systems.

Turnover is another serious challenge facing healthcare administrators. In 2019, overall turnover continued to have a negative impact on even top performing organizations. Lower performing organizations fared even worse, spending an average $530K more than high performing counterparts just to address first-year turnover. When you consider average replacement costs of $10K overall and $13K for nurses, turnover expenses are having a significant impact on not only the ability to safely care for patients and residents, but also the productivity and retention of existing staff, as well as the organization’s bottom line.

PREMIUM CONTENT: US Staffing Industry Pulse Survey Report: January 2021 Selected Highlights

Over the past few years, there has also been a significant increase in consolidations and mergers across the full continuum of care, bringing in additional complexities such as defining and addressing variabilities in data that lead to disproportionate budgets and staffing decisions, and the need to choose between using premium labor or deal with staffing gaps in shifts. This may not sound significant, but according to a National Institutes of Health study, one more nurse per 1,000 hospitalizations enabled organizations to avoid five fewer deaths in ICUs, six in surgical units, five in medical units, and 26 fewer deaths as a result of failure to rescue. When you consider that many healthcare organizations have hundreds or even thousands of hospitals in their health systems, these numbers are lives first and foremost, but can also have a significant impact on the organization overall.

Beyond the numbers, how are vacancies impacting your workforce, your patients and your business? These are the questions keeping senior healthcare leaders up at night. Especially now. Vacancies are doing more than affecting the bottom line. They are affecting quality of care, safety engagement, staff burnout, readmission risks and even CMS reimbursements. These are all tied to your ability to adequately staff your organization.

Historically low unemployment, coupled with soaring vacancy rates and a global pandemic taking direct aim at healthcare and senior care, is creating strong demand for contingent labor and a perfect storm for healthcare leaders. How do you navigate these challenges and ensure the delivery of high-quality care?

  • Start small. Focus on a single goal such as maximizing full utilization of your full-time staff. The importance of this cannot be overstated.
  • Flex. Grow your per diem flex force. Focus on disciplines that are currently in the highest demand and can have the greatest impact.
  • Strategize. Develop a recruitment strategy that will have an immediate and significant impact. Capitalize on the positive perception that working directly for a facility and that internal per diem staffers are given preference over external staff.
  • Tools. Ensure you have tools that enable contingent staffers to easily find, request, and schedule shifts on their mobile devices.
  • Compliance. Put in place processes and tools that will keep your contingent staff compliant to work at a moment’s notice. Do not miss out on available staff due to preventable non-compliance.

Without a doubt, healthcare staffing challenges are daunting, multi-faceted and fast moving, presenting healthcare leaders and the staffing agencies that support them with significant challenges. Your organization’s success lies within your ability to address staff utilization and ensure you have the right talent in the right positions, and to do so with urgency.


Manny Gagliardi

Manny Gagliardi
Manny Gagliardi is managing director of HealthcareSource.

Manny Gagliardi

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