By Tracey Drury – Reporter, Buffalo Business First
Jan 17, 2023
While a lengthy, complex interview process may have been typical in the past, hospitals are making major changes to how they identify potential employees with an eye toward making hires faster – and keeping them for the longterm.
Those changes include enhancing relationships with colleges and training programs, updating online application systems and creating in-house staffing agencies to compete with national travel and agency staffing companies that are costing hospitals millions.
Kaleida Health estimated it would spend $100 million on agency nurses in 2022, contributing to a $120 million projected deficit. That makes staffing its No. 1 issue, CEO Don Boyd said, stressing the importance of building the workforce pipeline earlier and making the recruiting process easier.
“How do we make applying for and getting a job from Kaleida as easy as ordering from Amazon or booking a flight?” Boyd said. “It’s taking the simplicity of that and really focusing on making the experience for applicants something that’s easy to navigate.”
The final step is retention, which includes finding the best ways to engage staff — identifying what the barriers and challenges are that make them unhappy, then addressing those issues.
“If we can improve the number of staff that work at Kaleida, that reduces the need for agency staff and reduces our expenses,” he said.
While it costs more to employ an agency nurse, the rates are coming down: According to Vivian Health, a national health care hiring marketplace, the average weekly pay in December for a travel nurse in New York was $3,523, down 11.6% year-over-year from $3,986. That’s still higher than the national average of $3,177, a 16% reduction from December 2021.
“At the peak earlier last year in 2022, we were finding some of those contract rates being paid to those individuals were nearly doubling,” said Erik Swanson, senior vice president at Kaufman Hall, a national health care consultancy. “That’s led to tremendous challenges on hospitals in managing those costs.”
He pointed to a metric called FTE per AOB, which calculates the total hours worked to take care of the number of patients in the average occupied bed. Though that figure for 2022 through November was down 18.9% compared to the same period in 2019, labor expenses were up 22.5%.
Some hospitals are using workforce optimization technology to predict demand, then using analytics to optimize what type of staff would be required during those times at the lowest cost, he said.
Another solution by larger systems – including Catholic Health and UPMC – includes building their own internal staffing agencies. That means paying a premium to individuals to float between hospitals or care settings where there is demand while remaining on the payroll and retaining the benefits of the organization versus leaving the area to work for a travel or agency staffing company.
“The idea is you still get some of the flexibility from a hospital and health care system to use staff and deploy them as needed, but also not have to pay the rate of some external staffing agencies,” Swanson said. “It’s worth noting that none of these options or levers by themselves are a silver bullet, given the multi-faceted nature of all these challenges hospitals are facing.”
Catholic Health CEO Mark Sullivan said its CH Internal Staffing program is helping, as are sign-on bonuses and premium pay incentives for hard-to-fill shifts. But staffing remains one of the biggest factors in the health system’s losses, which reached $138 million through third quarter of 2022 and were projected to hit $160 million for the year.
“If we could put a dent in that, we’d be in good shape,” he said.
Recruitment and retention efforts – including job fairs and carnivals — led to more than 585 nurses hired in 2022 through November compared to 386 in all of 2021. That’s helped to reduce reliance on agency nurses by more than half, from 800 to just over 300.
“What’s great about that is we continue to build a workforce and they want to stay with us,” Sullivan said. “This is an issue that everyone is dealing with. If we can show that our culture is strong, then people will want to work with us.”
Erie County Medical Center spent $14.2 million on agency staffing at the hospital and its longterm care site in 2022, with costs of $1.9 million per month at the peak. But now it's down to fewer than 10 agency nurses after a push on recruiting led to more than 1,000 new hires last year, including 300 registered nurses and 230 licensed practical nurses and aides.
Thomas Quatroche Jr., president and CEO, said the hospital brought its wages up to market rates, including a mid-contract increase of 7.75% for nurses following new labor agreements at Catholic Health and Kaleida.
While that’s helped, Quatroche said what’s really making the difference is strong relationships with area colleges and dedicated educational units as well as targeted recruitment efforts.
“We’ve really worked with our nurse leadership to provide an environment of teaching at our hospital and our units,” he said. “The way they’re treated and the culture of the organization is really what’s driving the recruitment.”