Page 8 - Healthcare News Jan/Feb 2023

Work in Progress
One of the factors greatly impacting hospital finances is the ongoing workforce crisis, which has certainly increased the cost of providing care. Roose told HCN that, while Mercy’s overall workforce is down perhaps 20%, due to a variety of fac- tors, its workforce costs are still 7% to 8% higher than before the pandemic.
Indeed, with many positions, not just nurses, hospitals have had to rely on contract employees, which are considerably more expensive than those on staff.
But there are other factors as well, said Watkins, including additional overtime,
bonuses needed to attract job candidates, shift bonuses, and more.
“It’s a huge challenge, and it significantly affected our financial performance, as well as that of other systems in the Common- wealth and across the country,” she said. “And we have to make sure that we are staffed to take care of the patients here that are sicker and that are staying longer.”
Elaborating, she explained that Cooley Dickinson used very few contract nurses prior to the pandemic, but the need for such personnel has risen dramatically due to retirements, burnout, and individuals simply leaving the profession to do some- thing else.
These forces have left hospitals to fill the gaps as best they can and, for the long term, focus energies — or even more energies, as the case may be — on attracting and retain- ing personnel across the board.
Indeed, Hatiras told BusinessWest that closing the staffing gap is critical because
it will bring down the overall cost of doing business and help hospitals cope with lower amounts of COVID relief and revenue levels still below those from before the pandemic.
“With ARPA funds drying up, we’re going to have pull ourselves up by our bootstraps. So our emphasis is on closing the staffing gap,” he said. “If we can do that,
and not bleed money on the expense side, I think we’ll be OK; I think we’re poised to have a good year, as long as we’re able to attract nurses here.”
Elaborating, he said closing this gap involves making HMC a preferred place to work, one where applicants with choices will want to go — and hopefully stay, thus reducing the high cost of continually filling vacancies.
“We’re doing OK because we had to re- spond to what was going on in the market by creating even more attractive reasons for coming here — we raised our rates, we’re enhancing benefits, and at the same time, we’re looking at economic assistance for the lower-earning employees,” he said. “Where it’s more difficult is with the pro- fessionals because the dollars are signifi- cantly more, so competing just on price is difficult. The key for success — what keeps people here and makes them come here — is the culture of the place, so we put a tre- mendous amount of effort in the 10 years I’ve been here on creating a good culture. Now, it’s become a differentiator, and we’re pushing it even more. We’re an employer that listens to employees, responds to their needs, and cares. That’s what people want.”
Roose concurred, and told HCN that
the recent challenges that hospitals have faced have put even more emphasis on the importance of people in the overriding task of providing quality care to patients — and the overall success of a provider.
“Never has it been more apparent, and critical, to realize that people are the vehi- cles through which we deliver healthcare,” he said. “We do not deliver services that can be provided by machines; we’re reliant upon the great skills of care providers — and we don’t take that lightly.”
Bottom Line
Moving forward, Roose said, as hospitals cope with these various challenges — and, again, there are many of them — state and federal governments need to step up and continue to provide needed support.
“The ARPA funding and other sources of relief through the pandemic and beyond, which is greatly appreciated, is not enough to close the gap from the challenges that we have encountered,” he noted. “The cost structure for delivering care has increased so dramatically, the models for fee-for- service care have not shifted quick enough, and the rates from commercial and other payers has not kept up with inflation.
“So even with all that support, hospitals like Mercy Medical Center are expected to lose about $25 million this year, which is very similar to what it was the year before, and Trinity Health Of New England lost $65 million in fiscal 2022 from operations,” he went on. “And that puts incredible stress on hospitals.”
Indeed, it does, and these losses, and the forces behind them, explain why hospitals are at an inflection point, and why change is needed if they are to move from critical
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