Staffing Shortages: Responses and Risks at Hospitals and Health Systems

Staffing Shortages Web

It’s tempting to blame the pandemic for today’s healthcare staffing shortage, but the crisis is not a new one. For example, in the wake of the Great Recession from December 2007 to June 2009:

  • Hospitals saw a significant number of nursing vacancies that required them to pay premiums and improve working conditions.
  • Physicians encountered significant burnout that compelled many to leave their practices.
  • Nonclinical workers gravitated toward high‑tech and other industries for better pay.

But while the roots of the current crisis precede the pandemic, there’s no denying that COVID-19 has made matters much worse. This article examines the situation since March 2020, the risks that organizations face as they struggle to offset the impact of healthcare workers leaving the profession, and mitigating strategies that respond to staffing shortages.

Staffing Shortage Situation

When the pandemic began in spring 2020, the industry faced significant declines in volume due to the mandated cancellations of elective surgeries; safety concerns about contracting COVID‑19; lack of available child care; and in many markets, capacity constraints because of supply shortages and space needed to treat COVID‑19 cases. Between March and June 2020, volume declined to 60% of prepandemic levels.1

The decline in volumes resulted in massive financial losses for hospitals and health systems, and many decided to furlough or lay off staff to help offset their low financial performance. As organizations started to see gradual increases in the demand for services and received supplemental relief funds from the CARES Act and other sources, they eliminated the furloughs and rehired staff, but in an environment that had changed dramatically since before the pandemic. Providers and nurses were caring for patients under highly difficult workplace conditions, and many nonclinical staff were forced to work remotely.

Nevertheless, many healthcare workers began returning to the workforce to fill open positions. They now have ample opportunities, as the demand for staff continues to grow, decreasing the unemployment rate to as low as 3% to 4% from a high of over 10% in spring 2020, as shown in figure 1.2

Despite the low unemployment rate, many organizations are still experiencing a high level of job vacancy due to workers deciding not to return or current employees leaving their positions. In a recent healthcare workforce report,3 the turnover rate at the end of 2020 increased 20% from 2016 to 19.5%, with nursing departures up 28% from 2016 to 18.7%. The report noted several key reasons for the increase in turnover:

  • Career Advancement: Staff leave because they do not see opportunities for promotion, or they decide to get additional education and pursue advanced careers.
  • Retirement: Many in the workforce are aging and deciding to retire instead of adapting to the new normal.
  • Working Conditions: Staff continue to work overtime, and the patient care requirements due to COVID‑19 have resulted in higher levels of staff burnout.
  • Pay: Staff are being recruited to other organizations or agency firms to work for higher pay, with wages that are at up to 50% higher than their current compensation. Others found opportunities to work from home, often for more pay than being on site.
  • Regulatory Requirements: Staff turnover increased in states that mandated vaccination as a condition of employment, and higher turnover is expected when the CMS vaccination mandate takes place in early 2022. Refer to figure 2 for turnover rates from CY 2016 to CY 2020.

These staffing issues have not gone unnoticed by industry observers. A recent article issued by Fitch Ratings 4 said the healthcare industry is facing long-term impacts, and organizations will need to find sustainable solutions to offset the negative financial and operational impacts of not having enough skilled staff to provide acceptable patient care. Otherwise, they will be considered a risk by the rating agencies.

Learn more about strategies that could help mitigate issues your organization might be facing.

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This article was originally published with the American Health Law Association on January 27, 2022.