Looking ahead to staffing in 2019, many administrators are having double vision. Healthcare labor costs are growing (and show no signs of slowing), but healthcare leaders are also facing the pressure to reduce operating costs and combat physician and staff burnout. These goals compete with the aim of improving patient experience and employee retention. It’s no wonder healthcare leaders have more stress than ever.
Labor Budget Grows – But With What Return?
A joint study conducted by the Healthcare Financial Management Association and Navigant confirmed that labor costs are projected to increase through 2019. The study surveyed 101 Chief Financial Officers working at various practices and health systems around the country, of which 78% said that their cost of labor has increased at a steady pace over the past several years, and of that percentage, 18% responded that they expect the cost of labor to grow more than 15% over the next year. Some 14% of those surveyed responded that they expected costs to decrease but only by a paltry 5%. The conundrum for these CFOs and COOs is managing steadily rising labor costs along with reducing operational spend — all without taking away from patient care.
In most industries, when operating costs increase, there is the autonomy to adjust prices accordingly. Not so in the healthcare industry. Healthcare leaders are often left scratching their heads looking for the answer to the questions “how can we manage our operations with shrinking margins?” and “what’s causing the rising costs?”
At the core of the labor cost increases are two main causes. The first is the difficulty healthcare practices have with recruiting and hiring new staff members. This is due to both the lack of qualified candidates available and the large aging population of patients who are requiring more care. Unemployment is the lowest it has been since 1969, which means the flood of baby boomers outnumber the trained healthcare professionals and support staff. A second cause of rising healthcare costs is turnover and the difficulty in preventing healthcare providers and support staff from burning out. Staff burnout is causing qualified and talented healthcare employees to either leave the profession altogether or reduce their hours significantly.
These current problems with staffing costs and workforce availability are forcing healthcare leaders to reevaluate their operational workflows in an effort to use their current staff more efficiently while still taking steps in order to avoid overburdening them. Many reach for technology to supplement their need for additional staffing, but find at the end of the day there is still a need for human judgment that technology can not yet provide. Others aim to improve employee benefits and perks in order to attract the few qualified healthcare workers who are looking for employment. Some try to do all these things at once, proving to be the managerial equivalent of patting your head while rubbing your stomach at the same time. Tricky but possible.
Improving the benefits and perks for employees of a practice can be a costly yet effective way to attract new and retain current employees. Some benefits include flexible schedules, wellness programs and day care and other benefits. Other groups go for a more direct approach by increasing their hourly minimum wage, some as soon as 2019. Philadelphia-based Jefferson Health and New Jersey’s Virtua Health will be increasing their minimum wage to $15 an hour as of January 1, 2019, Ochsner Health in New Orleans has pledged to increase their minimum wage from $8.50 to $12 as of January 2020 and Milwaukee’s Aurora Health has plans to follow suit with an increase to $15.15 by 2021, with more systems taking this approach regularly. While this certainly brings in new employees and adds to employee satisfaction, this makes many smaller organizations in the area unable to find quality staffing.
EHR Companies Make a Push
EHR companies are hearing the frustration and many have acted by making new feature additions or to their systems in order to help practices. Popular EHRs eClinicalWorks and NextGen are tackling the burnout beast through the addition of mobile applications such as eClinicalWorks’ Virtual Scribe and NextGen’s Mobile Scribe. These highly accurate and convenient voice recognition applications give providers the freedom to dictate comprehensive notes, on the go. Eliminating the need for long hours tied to a computer – and giving more time for patient care. Other additions include the addition of interoperability technology such as Prizma for eClinicalWorks and NextGen Share for NextGen. These health information search engines connect a variety of healthcare exchanges to the EHR, allowing the patient’s medical history to be at the provider’s fingertips for the best quality of care and lessening the amount of administrative support work for exchange of records from provider to provider.
What Else Can I Do?
The good news for healthcare leaders is they are not alone in their struggle to combat burnout while reducing costs and using their current workforce more efficiently. Many organizations are turning to outsourcing their back-office functions to companies such as ScanSTAT. By offloading clerical functions like document filing and medical record request fulfillment to a trusted third party, organizations are able to focus their budgets on clinical staff aligned to patient engagement goals. Healthcare leaders can combat the rising cost of labor, increase operational efficiencies in back-office tasks and leverage a highly trained clerical workforce specializing in healthcare. Contact us today for a cost analysis to see how you can reach your 2019 goals with the help of outsourcing.