The majority of hospital leaders reported raising starting salaries and introducing signing bonuses to improve recruitment as they manage persistent workforce shortages.
Hospitals and health systems have increased their recruitment and retention strategies as workforce shortages and high expenses continue to be top challenges in 2022.
The 2022 Healthcare Performance Improvement Report reflects responses from 86 hospital and health system leaders in the US.
Workforce issues have plagued hospitals since the COVID-19 pandemic began and will likely persist for a while. The current inflationary environment has increased wages and salaries for administrative staff, support services, and clinical staff.
Hospitals have also struggled to recruit and retain staff, leading them to pursue new strategies. All of the respondents reported adopting at least one recruitment or retention strategy, including raising starting salaries or minimum wage (98 percent), introducing signing bonuses (84 percent), and increasing opportunities for remote or hybrid work schedules (76 percent).
Almost three-quarters of health system leaders (73 percent) implemented retention bonuses, 58 percent offered more attractive shift differentials to alleviate off-hours and weekend coverage staffing challenges, and 47 percent paid for more overtime hours.
Fewer respondents restructured the work week to reduce commuting hours (40 percent) and offered subsidies for commuting and childcare (19 percent).
Rising workforce expenses are also a challenge for hospitals and health systems. Nearly half of respondents (46 percent) said labor costs were the top area for cost reduction opportunities. However, reducing labor costs is likely not a short-term goal.
According to researchers, hospitals can reduce labor costs by scaling back the use of contract labor, leveraging automation, changing care delivery models, and outsourcing certain responsibilities.
More than a quarter of leaders (27 percent) reported outsourcing for revenue cycle operations, while 23 percent outsourced for environmental services and 21 percent outsourced for IT operations. Only 16 percent of health system leaders said their investment in automation technology was significant and 46 percent reported making modest investments in automation.
Workforce challenges have led to volume and revenue issues as well. Two-thirds of respondents said they have had to run their facility at less than full capacity over the past year due to staffing shortages.
Oncology was the only service line that showed significant volume improvement from 2021, with 40 percent of respondents noting that volumes were at 100 percent or more of pre-pandemic levels. Emergency department, radiology, and pediatric volumes were generally the same as in the 2021 report, but orthopedics, cardiology, and neurosurgery had decreased volume.
Nearly 70 percent of respondents reported an increase in inpatient length of stay in 2022. Leaders attributed this to being unable to make timely discharges to post-acute facilities that are reaching capacity faster due to staffing shortages.
“Long-term staffing shortages create bottlenecks in patient care and increase inpatient length of stay, leading to higher costs and poorer outcomes,” a leader of a firm’s performance improvement practice, said in a press release emailed to RevCycleIntelligence. “For the rest of 2022 and beyond, hospitals and health systems need to prioritize building out retention strategies and transitioning away from unsustainable levels of contract labor to more stable staffing.”
Revenue cycle challenges have also increased in 2022. For example, 67 percent of respondents reported an increase in the rate of claim denials, compared to 33 percent in 2021. Additionally, 51 percent reported a lower percentage of commercially insured patients, while 41 percent reported an increase in bad debt or uncompensated care.
Supply chain issues have persisted as well, with 71 percent of health system leaders experiencing distribution delays, 58 percent encountering issues with raw product and sourcing availability, and 50 percent reporting problems with reliance on non-domestic suppliers.
In addition to workforce and supply chain challenges, hospital margins have remained negative throughout 2022. While facilities have seen intermittent revenue increases and lower expenses, experts predict that hospital finances will remain unstable for the rest of the year.
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