Modern Healthcare Workforce Report 2003

Help wanted, desperately
In our first annual status report on the healthcare industry's workforce, we find an existing shortage of qualified staff is set to get much, much worse

Special Report
Written by Patrick Reilly
Story originally published June 16, 2003 Copyright 1996-2003 Crain Communications

With the stress of a Medicare audit, new leadership strategies and problems with a subordinate's performance, Diane Ball felt overwhelmed in her position as registered nurse and nurse manager at Delnor-Community Hospital, Geneva, Ill.

"I was in the burnout stage," Ball says. "I was losing perspective. When you are a nurse, patients are your first priority. It is harder to keep up with management responsibilities."

Ball, 52, considered quitting her job and came close to becoming part of a growing statistic in the healthcare industry, which reported 168,000 vacant hospital positions in 2001, including 126,000 positions for RNs, according to the American Hospital Association. Current trends in demand and nursing school enrollments suggest the 6% nationwide nursing vacancy rate in 2002 could reach 29% by 2020, according to an HHS study.

Ball remained in her position at the 110-bed hospital after enrolling in a stress management program for hospital employees, but her story is unusual. Many frustrated healthcare workers leave the profession and some prospects bypass healthcare altogether because of the stress and responsibilities of the jobs, experts say.

The increasing number of vacant healthcare positions-especially for RNs-has left industry experts developing strategies to offset the problem, retracing steps to avoid a repeat shortage in the future and improving the profession's image through marketing campaigns.

In addition to nursing, the shortage affects the entire range of healthcare positions, from home-care workers and nursing home staff to radiologic technicians and pharmacists. There are physician shortages in some specialties and geographic markets. And hospital administrators aren't immune, as concerns continue about where the next generation of chief executive officers is coming from (See our coverage of the CEO situation at modernhealthcare.com).

Just as the causes of the problem are complex, the solutions to the workforce crisis are many and varied. They range from reaching down to junior high school to begin recruitment efforts and offering better pay, to creating new career paths for current workers and fostering a culture of cooperation among doctors, nurses and other hospital workers.

"There is an unprecedented workforce shortage," says Sharon O'Meara Gale, a senior consultant at healthcare consulting firm Bristol Group Mitretek, Lexington, Mass. "In some places it is a current disaster. The nursing shortage will have a far-reaching impact on the delivery of healthcare in this country."

The numbers tell the story
The workforce shortage is complicated, but it really can be summed up in two words: demographics and economics.

The entire U.S. workforce is aging along with the baby boom generation. As the huge group of Americans born from 1946 to 1964 begins reaching retirement age in 2011, the competition for workers will only intensify.

Also, the lure of high-tech jobs has taken some of the luster off of many healthcare jobs that once were viewed as highly technical but now seem low-tech, poorly paid and stressful. And women, who make up 90% of nurses, now have many other career choices. They are as likely to be in executive positions or practicing as OB/GYNs as to be staff nurses.

The average RN will be 46 years old by 2010, O'Meara Gale says. RNs under 30 represented 30% of the workforce in 1983 but represented just 12% in 1998. Nurse retirements will continue to rise as the boomer crunch hits.

Nursing schools continue to see a declining number of graduates and those students who do get nursing degrees are older. Graduates from associate degree programs are, on average, 33 when they receive their diplomas, five years older than the class of 1980, according to HHS.

"This is a long-term challenge," says James Bentley, senior vice president of strategic policy planning at the AHA. "The problem is going to get worse before it gets better."

Nursing's image also has led to a lack of interest among people entering the workforce, experts say. Stories of backbreaking work and mandatory overtime have deterred some from giving the profession a chance.

"We have to get the word out about what a great profession it is," says Barbara Blakeney, president of the American Nurses Association. "Part of it is making nursing an attractive job."

Employee dissatisfaction, such as in Ball's case, is another contributing factor to the declining healthcare workforce, says Bentley, who as director of the AHA Workforce Commission headed a one-year study on healthcare worker shortages.

According to a 2001 survey by the ANA, 55% of nurses would not recommend a nursing career to their friends or children because they are dissatisfied with the profession.

The dissatisfaction stems from restructuring initiatives at hospitals where RNs were replaced with less skilled workers, the nurse executive role diminished and there were fewer nurse managers, says Dennis O'Leary, president of the Joint Commission on Accreditation of Healthcare Organizations.

"The problem dates back to the 1990s," O'Leary says. "We had a lot of hospitals lay off nurses. The message was there is not a lot of value placed on nurses. They leave and the ones who stay are not happy. A reputation is created."

The two Rs
Experts agree on two solutions to the workforce shortage. Hospitals need to improve their performance in recruiting healthcare workers and retain the employees they already have, the industry insiders said.

Most hospitals tend to focus on retaining their nurses by offering flexible scheduling, tuition reimbursement, on-site training, high school vocational programs and on-site day care, which helps employees with young families. Other hospitals are creating in-house nursing agency pools to help meet seasonal demands.

"Retaining is huge," Blakeney says. "If we can't stem their departures, the crisis gets worse."

Hospital management that provides nurses with delegated authority, adequate staffing, competitive compensation and a culture of teamwork usually has better success at retaining nurses, says O'Leary, whose organization last year released a study on the nursing shortage.

"You need to make the hospital environment a desirable work environment," O'Leary says. "If you have an environment that values nurses, people will stay."

Hospitals that train nurses about new drugs and devices, employ chief nurse executives and establish career ladders for nurses also have better retention rates, he says. Better relationships between physicians and nurses also are key to retaining nurses, O'Leary says.

Moses Cone Health System, Greensboro, N.C., is one system that has established a career ladder. Employees at the system's five hospitals can win scholarships to attend classes for health-related professions. The scholarships at the local colleges are valued from $2,500 to $6,000 per year for two years. Nurses and other healthcare workers who earn the scholarships then must work at a Moses Cone hospital.

The system also offers in-house training for workers who want to advance into supervisory positions. In a program scheduled to begin in 2004, nurse assistants will be eligible for financial assistance in their education as they study to become RNs.

"We are helping our own employees grow," says Susan Hamilton, director of nursing services at Moses Cone. "It helps people advance themselves."

The system established the career ladder in 1999 and turnover dropped to 11.5% in 2002 from 20%.

Some hospitals use unique tools to try slowing down turnover. Delnor, where Ball worked as an RN, used HeartMath, a comprehensive training system that illustrates the relationship between stress and performance at work. The hospital reported that turnover dropped from 28% to 21% in the first year of using the system, which combines interactive software, training programs and other services.

"They have the skills that help them cope better on the job," Ball says. "When you have employees that are feeling overwhelmed, that ultimately leads to increased absenteeism and affects reaction times."

When in doubt, pay up
Retention is the easiest and most cost effective method to maintain adequate staffing levels, experts say, but recruiting is critical for the future. Recruiters offer nurses everything from signing bonuses and education vouchers to credits for car loans. A 2002 AHA study reported that 41% of hospitals pay sign-on bonuses as a recruiting incentive.

Wake Medical Center, a 726-bed hospital in Raleigh, N.C., offered $10,000 signing bonuses in 2001 to woo experienced nurses to help fill vacancies.

Tenet Healthcare Corp. announced in April that it is offering student loan consolidation and repayment programs to nurses and other employees. Employees with outstanding loans of at least $7,500 can consolidate them into a single loan. The repayment program enables the hospital to set a cap on the monthly amount it will provide in repaying student loans.

However, some hospitals are shying away from signing bonuses because they alienate the existing workforce, Bentley says. "More and more (hospitals) are seeing (the practice) is harmful. All bonuses do is move people around. We have to grow retention."

The average annual salary for a hospital staff nurse in 2000 was $47,759, a 30% increase from 1992, according to the ANA.

Still, enough hospitals are recruiting nurses that temporary-staffing companies that dispatch healthcare workers on seasonal assignments are reaping the benefits. Revenue at the top five temporary staffing companies is expected to increase 20% and earnings by 40% in 2003, according to a recent Fitch Ratings report.

Cross Country Staffing, a Boca Raton, Fla.-based temporary-staffing firm, reported net income of $7.1 million in the first quarter of 2003. The company, which had an average of 5,516 full-time-equivalent nurses on staff in the quarter, works with 1,500 to 2,000 hospitals that are looking to fill vacancies, says Executive Vice President Jonathan Ward.

Even as the temporary nurse-staffing agencies have been enjoying healthy growth, however, an increasing number of hospitals have begun seeking less expensive solutions to their staffing shortages.

For example, three-hospital Bon Secours Richmond (Va.) Health System has slashed spending on temporary nurses to about $140,000 per month in fiscal 2003 compared with about $1 million per month last year. It hired 296 nurses in 90 days through an agressive recruiting campaign.

Getting the message out
Boosting the public image of nursing as a career, especially among men and minorities, is the first step that could help hospitals meet the increased demands, O'Meara Gale says.

"We have to improve the image of nursing so it becomes a viable opportunity for professional development," she says. "We need to make the profession attractive to a big number of people because women have so many more options."

Blakeney says the message has to get out that nurses can work in other venues besides hospitals, such as schools and the military.

Healthcare leaders say other steps can be made to alleviate shortages, such as offering higher salaries to nursing college faculty members, using new technology to make nursing easier, and having hospitals share successful recruiting and retaining techniques.

Nursing colleges must try to lure more instructors to the classroom because the average age of faculty members at nursing schools is 55 and administrators are finding it difficult to replace retiring instructors, O'Leary says. Additional federal funding is needed to help pay for more competitive faculty salaries, he says.

Every little bit helps, Bentley says. "It takes time and expense today to be better prepared for tomorrow."

This article was posted with permission from Modern Healthcare. To see the full Workforce report click here: http://www.modernhealthcare.com/resource.cms?resourceId=27

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