How to Combat the Healthcare Labor & Supply Shortage

September 19, 2022 Kimberly Anderson-Mutch

The healthcare industry is no stranger to minimizing risk, but the pandemic presented challenges no industry could prepare for. Unsurprisingly, we're still feeling the effects, from a mass exodus of clinical staff to the strain that inflation is putting on budgets. These operational challenges in healthcare aren't going anywhere. The pandemic may have exacerbated existing issues, but “weathering the storm” isn't an option for healthcare organizations. They must enact meaningful change to address the current shortages and increase resilience for future interruptions.

Let's take a closer look at where these shortages are coming from, how they impact operations, and what you can do to mitigate their effects.

What Healthcare Shortages Are Happening?

The two main shortages in healthcare are labor and supplies. Both have greatly increased the difficulty of day-to-day operation for healthcare organizations, especially in rural areas.

Labor Shortages in Hospitals and Long-Term Care Facilities

Labor Shortages in Hospitals and Long-Term Care Facilities

One of the biggest issues in healthcare is the shortage of healthcare workers. The U.S. Bureau of Labor Statistics estimates the need for 1.1 million new nurses by 2030, but virtually all positions, from patient transporters and technicians to therapists and physicians, are facing shortages. These shortages are only expected to worsen, as both the population and the workforce age. Additionally, a third of nurses are over 50 years old, putting them at retirement age within 10-15 years.

Shortages in nursing homes and long-term care facilities can be especially challenging. During the pandemic, these settings have lost 223,700 jobs and 362,700 jobs, respectively. Workforce levels haven't been this low since 1994.

COVID-19 kickstarted the healthcare workforce shortage, presenting staff members with incredible census levels, stressful work environments, and frightening exposure risks. Although things have begun to settle, many of the problems still persist. Some staff members have been leaving healthcare altogether to get away from the stress, while others have entered early retirement, or found higher-paying contract jobs. Turnover for nurses has reached a national average of 8.8% to 37% depending on location and specialty.

Small hospitals and assisted living facilities often feel staff shortages more acutely, because larger organizations have the resources to offer better incentives and salaries. Workers can even seek remote jobs from employers across the country, getting paid for a higher cost of living than in the area in which they reside.

Unfortunately, the education sector also cannot meet the demand for new staff. Even in 2019, nursing schools had to turn away over 80,000 qualified applicants. There are several reasons for this, but a major problem is the lack of nurse educators. The need for advanced degrees results in a small pool of educators and older faculty, who generally have fewer years to teach and are likely to retire sooner. Nurses also have little financial incentive to enter the education field, since they can typically make much more in clinical settings.

Labor shortages in hospitals and long-term care facilities affect perhaps the most precious resource they have—and the one that is incredibly difficult to rebuild. Healthcare facilities are dealing with a snowball effect, where resignations increase the workload and stress placed on the remaining staff members, leading them to be less satisfied and more likely to leave. Combating the staffing shortages in healthcare is a complex, multifaceted task, but it is absolutely critical for facilities moving forward.

Hospital Supply Shortages

Another major problem for healthcare organizations is the medical supplies shortage. The pandemic highlighted problems in global supply chains as hospitals grappled with the need for significantly more supplies than manufacturers could produce. They also saw what happens when key players, such as distributors and transporters, were taken out of the equation. 

Although we've seen improvements since the height of the pandemic, supply chain problems are still prevalent and have contributed to the increasing cost of supplies. Inflation has also added strain to hospital budgets. In 2021, drug prices had increased 36.9% per patient over pre-pandemic costs

Overall, supply costs rose by 20.9%, but some departments saw much higher numbers, like intensive care units which saw a 31.5% jump in costs. Although Medicare and Medicaid offer some reimbursement, these rates have not kept up with the speed of inflation. In 2022, the Medicare Payment Advisory Commission predicts a margin of -9% on Medicare services.

With such pressing healthcare operational challenges, organizations have started to invest in cost-saving measures and ways to add resiliency to their supply chains.

Why Is There a Healthcare Workforce and Supply Shortage?

Why Is There a Healthcare Workforce and Supply Shortage?

This issue is a complicated one, with many different contributing factors. Some of the problems include:

  • Stressful work environments: Over half of clinicians reported burnout in a 2022 study. As the healthcare staff shortages compound, the workplace has become particularly stressful, with fewer workers to assist, more demanding patients, and extensive documentation requirements. Many healthcare workers also had to isolate from family members, especially those that live with immunocompromised people.
  • Lack of technology automation: Some healthcare organizations have struggled to keep pace with technological advancements, leaving employees with high administrative burdens and outdated resources. Workers often feel stressed and frustrated with these excessive requirements, contributing to burnout.
  • Supply and demand imbalance: Both the supply chain and the labor pool are smaller than needed to meet the intense demand of the industry. Supplies are expensive and hard to find, while educational programs haven't had the capacity to churn out enough new staff to fill the void.

State and federal governments, industry organizations, educational institutions, insurance providers, software companies, and other entities will need to support widespread efforts to address the shortages in varied ways.

What Effects Do These Different Shortages Have on the Healthcare Industry?

Of course, these pervasive issues have created a slew of new problems—and new solutions that organizations are considering. Perhaps the most influential effect is the increase in costs. It costs more to obtain necessary supplies and to hire and retain workers. The labor expense per adjusted discharge for hospitals rose 26.4% over pre-pandemic levels, with non-labor expenses rising 20.5%. Hospitals understand that these costs call for long-lasting changes in how they approach staffing and supply chain management.

Many organizations have begun to invest in new technologies to improve the staff experience and supply chain management. Workforce Management can significantly increase staffing visibility and flexibility, helping facilities to reduce costs in many different areas.

Other changes spurred by the healthcare shortages include:

How Long Will the Healthcare Shortages Last?

How Long Will the Healthcare Shortages Last?

Since these shortages are so complex and systemic, they will take a while to correct. We'll be looking at the effects of the nursing shortages and the healthcare supply chain shortages for years. Fortunately, there are many initiatives underway to address these issues, like changes to government funding, cost-saving technologies, measures to improve workplace satisfaction, and the use of agency staffing to supplement full-time healthcare workers.

While some problems require industry-wide agreement and government action, individual organizations can make great strides on their own, many of which are necessary for staying competitive. In other words, healthcare facilities can't wait around for the shortages to resolve themselves. 

From technology updates and restructuring to mindset shifts about what employees want from their workplace, organizational adaptation is vital for pushing through the effects of these hospital staff shortages and avoiding them in the future.

Strategies to Mitigate Staffing Shortages and Supply Shortages in Healthcare

For many facilities, dealing with the impact of hospital supply shortages and labor shortages comes down to logistics and administration. The right tools, such as human capital and workforce management software—like our own SmartLinx platform—can greatly simplify the workday. From cost savings to staff engagement, software can help healthcare organizations address the many causes of nursing staff shortages and supply chain shortages.

1. Address Barriers and Challenges in the Work Environment

First, consider what the working environment looks like and how it may contribute to unsatisfactory employee experiences. For many healthcare facilities, outdated systems and scheduling processes are adding unnecessary friction to the workday. Clinicians often feel like they spend too much time on administrative tasks and not enough time with their patients. Some suggestions from the U.S. Surgeon General's Advisory include:

  • Improving delegation plans by using automated data collection for tasks that come second to clinical care, such as billing and reporting.
  • Simplifying workflows based on usability input from patients and health workers.
  • Utilizing innovative technology to expand team collaboration capabilities.
  • Offering increased scheduling flexibility to reduce health care workers' stress and show compassion, such as providing leniency for lateness due to childcare.

SmartLinx, for example, offers a smarter scheduling tool that helps you optimize your team's performance, with schedules based on employee credentials, preferences, and census data. Set them up for success and a more enjoyable workday by creating a fully staffed floor—without costly overtime or hours spent at the computer. Increase engagement and communication by giving employees a collaborative role in creating their schedules, like picking up open shifts or submitting time-off requests easily and from anywhere.

Another major part of improving the workday is to analyze it. Start collecting performance data and asking workers what their biggest challenges are. With a little digging—and maybe some suggestions from your software—you can make changes that greatly improve employee satisfaction, costs, and patient outcomes.

2. Update Your Technology to Reduce Costs

Healthcare-compliant technology has come a long way and can help you reduce costs, limit labor requirements, and help you attract and retain employees. Of course, streamlined processes can be critical in speeding up the workday, but you can also modernize day-to-day, non-clinical tasks. Many processes can be automated, saving time and money to combat rising expenses while leaving employees to focus on more important tasks. Another option is to create self-service tools, like patient check-ins and clock-in apps for employees.

For example, your team might spend hours each week on staffing and payroll as they create schedules, call employees to fill open shifts, submit compliance documents, generate reports, approve paid time-off requests, and submit payroll. With automation, you can drastically reduce the amount of time it takes to complete these tasks. Team members can focus on crafting better patient and employee experiences, all while minimizing labor requirements and expenses.

Another benefit of automation is that it eliminates human error. You might spend considerable time fixing errors or getting your ducks in a row to avoid fines. Automation can offer peace of mind and help you ensure accuracy.

Modern technology is also an attractive incentive for employees. No one wants to work with out-of-date systems that slow them down. Modern tools tend to be more enjoyable to use and create a better image for both patients and employees. A cloud-based scheduling tool, for instance, can allow workers to check their schedule, submit time-off requests, and do much more, all from their phones.

3. Make Your Employees Feel Supported

With such a strained healthcare system, new employees often feel abandoned by or disconnected from their employers. Communication and strong support are key to avoiding this outcome. If possible, try to offer incentives that show employees that you support them, like mental health support, work-from-home options where appropriate, childcare, and mentoring programs. SmartLinx can help here, too, with tools for assessing and managing benefits programs, including educating employees on their options.

Another major part of developing a supportive environment is empowering employees to do their best work. It should be easy for them to communicate with supervisors and manage their schedules, pay, and benefits on their own. Self-service greatly limits the burden on administrators while meeting the needs of healthcare workers.

4. Develop Contingency Capacity Strategies

The pandemic is an ever-evolving situation and new waves and variants have made it hard to predict its effects on staffing. Establish contingency staffing strategies to prepare for and manage staffing shortages. The Centers for Disease Control and Prevention (CDC) suggest measures such as:

  • Canceling non-essential procedures and visits and shifting workers to other activities.
  • Addressing social factors that could prevent workers from getting to work, such as transportation, childcare, and housing challenges.
  • Staying aware of federal and state-specific emergency waivers and changes to licensure requirements that could help increase staff size.

If complicated scheduling demands appear, make sure you can quickly adapt to these changes. SmartLinx offers communication tools, mobile schedule management, and intelligent scheduling and forecasting based on your facility and team's unique needs.

5. Assess Your Hiring Practices

Remember, healthcare workers have a lot more options than they used to. The hiring process is often their first interaction with your organization, so make sure you're putting your best foot forward. An applicant tracking program can help you screen your applicants, track communications, and create a smooth interviewing process. You can avoid having applicants fall through the cracks or making them jump through hoops just to get in touch with the right person.

Consider your onboarding process, too, and how easy it is for employees to learn the flow of the organization. If possible, implement a staff mentorship program to give new workers someone to turn to when they need help, guidance, or support.

6. Establish Strategies for Filling the Gaps

No matter how prepared you are, the unexpected will happen. Make sure you have plans in place to quickly respond to shortages when they appear. Use a staffing platform that offers exceptional visibility and helps you balance your agency spending effectively to fill the gaps in coverage. With SmartLinx, for example, you can tap into the largest staffing agencies on the market directly within the platform.

Stay Ahead of Healthcare Shortages With SmartLinx

Stay Ahead of Healthcare Shortages With SmartLinx

With no signs of slowing down, healthcare shortages have necessitated action from hospitals and other facilities. SmartLinx is a comprehensive solution for reducing costs and cultivating an engaged, satisfied, effective team. A wide range of tools, like schedule optimization, daily task automation, and analytics, help healthcare organizations keep their teams happy and streamline the workday for everyone, all while staying compliant with strict regulations.

Reach out to us today to request your demo and see how SmartLinx can help increase your organization's resiliency in an industry that's always evolving.

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