The Healthcare Workforce Crisis Should Be a National Priority
Reports of the mounting job vacancies in healthcare have unfortunately – but not surprisingly – been narrowly focused on types of employers (e.g., home care, hospitals). That’s because healthcare as an “industry” is fragmented, and realistically too large and diverse for reporters to do more than focus on one of its components. But healthcare is too important, the vacancies are likely to impact the lives of every family’s loved ones at some point. This is a field where AI systems are not expected to replace humans so rebuilding the workforce is the best path to improve healthcare.
This column was prompted by President Biden’s proposal to establish new staffing requirements for nursing homes. The care these entities currently provide was described by HHS Secretary Xavier Becerra as “the wild, wild west when it comes to quality and accountability.” It was reported “three quarters of the country’s [roughly 15,600] long-term care facilities would have to hire additional staff.” Posted reactions included comments that the requirements would force many nursing facilities to close down. The comments were largely silent on a core question — How the proposed requirement would be met when there is already a severe shortage of healthcare workers in the U.S. and the world?
Worker shortages were a recognized problem in healthcare more than a decade ago but the COVID crisis made it a “national crisis.” There is solid evidence vacancies are undermining healthcare quality in every phase of care. Inadequate staffing delays necessary treatments, increases costs, and contributes to poor patient outcomes. Increased costs force low income families to delay treatments. Going forward, the country’s aging population will increase the need for healthcare services while the shortages are projected to get worse. Delays will be costly.
A Snapshot of the Healthcare Workforce
Nursing homes are known to have serious problems – “. . . nurses, aides, and other staff are reluctant to work for them; hundreds of facilities are shutting . . . because they can’t staff them.” Statistics on the post-COVID workforce are not available but earlier numbers show there were 1.7 million workers. That’s a small percentage of the 22 million healthcare workforce (according to the Census).
According to the American Hospital Association, there are 6,129 hospitals including 206 operated by the Departments of Defense and Veterans Affairs and 944 state and local government community hospitals. The total of for-profit hospitals is 1,235. Most are “short term acute care” facilities. Additionally, there are children’s hospitals, rehabilitation hospitals and psychiatric hospitals. In rural areas, there are 1,300 smaller Critical Care Access hospitals, a program created in 1997 in response to closures in areas where no hospitals exist. In 2022 hospitals employed 7.3 million workers (the pre-COVID total was higher).
The growth in the healthcare sector has been in home care since many elderly prefer to remain in their homes where caregivers help with daily tasks. From 2008 to 2019 home care employment grew from 840,000 to more than 1.4 million. They provided care services for a growing number of Medicaid-covered patients seeking home care, more than 3.2 million in 2019. The number of Medicaid home health agencies grew steadily from the 1960s, reaching a peak in 2013. Since then, the number of agencies has been declining, causing a drop in the availability of home care workers. In 2021 it’s estimated 46,000 companies were providing home care services although the total has very likely dropped.
In addition, there are countless medical service providers (e.g., physician’s offices, surgery centers, urgent care centers, etc.) based along streets in cities and suburbs. Many are operated by hospital systems but there are also thousands of private employers. Their employees come from a number of specialties, including over 200,000 nurses.
Often forgotten in discussions of healthcare is the importance of the thousands of specialists working in public health agencies. Those workers have been struggling since early 2020 to respond to the problems triggered by the COVID crisis. The workforce includes a mix of specialists from nutritionists to addiction treatment specialists to public health nurses and many more. The current total has not been reported although a Harvard study reported, “Nearly half of all employees in state and local public health agencies . . . left their jobs between 2017 and 2021, and . . . more than 100,000 public health staff could leave their jobs by 2025.” According to BLS data, there were approximately 728,600 social workers in 2022 but not all work in public health.
A thread that ties this together is that the overall workforce is huge and focused on providing personal care — 22 million worked in the “industry” in 2019. That is roughly 25 percent larger than the next largest, retail trade. The total includes 9.8 million workers employed as ‘health care technicians and practitioners’ (i.e., trained specialists). The staggering number confirming the industry’s fragmentation is the 947,000 ‘establishments’ in the Health Care and Social Assistance sector. Only 3 percent have 100 or more employees – so across the country, the industry is dominated by thousands of small employers.
Supply is the Problem
There have been countless columns highlighting the vacancies in healthcare. A search on the phrase “healthcare worker shortages” produced 7.2 million hits. Articles like “Staff Shortages Choking U.S. Health Care System” and “Concern grows around US health-care workforce shortage” call attention to the numbers but do not offer solutions.
Recently it was reported job vacancies in healthcare attracted the second lowest applications – 4.7 per opening – of all industries. Only retail is lower. Two other industries with serious vacancy problems – education and government – are significantly higher – 18 and 16 applications for each opening. That’s a key to the supply problem.
Digging deeper and looking at articles from years back makes it clear staff shortages have existed for years. ChatGPT found a report on a shortage of nurses in the 1930s, “Reports of a nurse shortage began to emerge in the mid-1930s, despite the country still grappling with the aftermath of the Great Depression. By 1936, many hospitals were already facing severe shortages of nurses.”
A key point from that old report highlights an often overlooked aspect of the problem – when local newspapers and TV stations were a primary source of news, their reports focused on local hospital staffing problems. And that continues to define the problem — job vacancies are specific to an employer and it’s that employer’s problem to solve. Hospitals along with all health care “establishments,” to use the Census word, compete to fill jobs with specific hiring specifications in local labor markets.
In the Philadelphia area, to illustrate the point, there are 16 short-term acute care hospitals, three children’s hospitals, etc. Each hospital, plus the other health care providers, are competing for nurses who reside within a reasonable commute of a facility’s location. BLS reports show 69,000 Registered Nurses work in the area. The “supply” also includes retired and ‘drop-out’ nurses along with costly contract nurses. Until new nurses graduate or additional nurses relocate to the area, the supply is effectively fixed. Hospitals that are successful in hiring nurses are ‘pirating’ them away from other healthcare providers.
The average salary for RNs in the Philadelphia area is $87,830. In the New York area BLS data shows 182,000 nurses and an average $104,860 average salary. In the Washington DC area, there are 44,000 nurses and the average salary is $92,800. In contrast, in southeast Mississippi the average salary is $61,890. There are as many as 100 salary surveys each year reporting pay data for local healthcare jobs.
The data from areas like southeastern Mississippi are important. There are only eight hospitals in the lower half of the state. That pattern is unfortunately common. BLS reports there are 44,000 RNs in the state. Rural areas generally have fewer healthcare specialists. Many counties with no resident physicians. The 46 million citizens who live in rural areas tend to be older and have lower incomes. They are also less likely to have health insurance. It’s a nationwide reality.
Each healthcare provider’s staffing problem is effectively defined by the supply of candidates, competing care providers in the area, commuting patterns and barriers to commuting (e.g., rivers). An employer’s financial situation is of course an additional factor and many care providers have financial problems.
Two demographic trends complicate the supply problem. Large numbers of Boomers are approaching the age of retirement. The second is the trend toward later marriages and smaller families that began half a century ago. It’s resulted in fewer young people starting careers. The cohort ages 20-24 is smaller than the 25-29 group, and that pattern holds for younger groups. The problem is compounded in healthcare by the many vacancies that require prior education and training.
State and local leaders are in the best position to assess the need for healthcare services, currently and based on population trends into the future.
VA Hospitals Highlight the Staffing Reality
Recently reported staffing problems in VA hospitals highlight the locality differences. The Department of Veterans Affairs operates providing care at 1,321 health care facilities, including 172 VA Medical Centers and 1,138 outpatient sites. They are located in urban and nonurban areas in every state, often close to acute care hospitals. Across these facilities there are over 3,000 roles with “severe occupational shortages.” That was a 19 percent increase from 2022. That followed a 22 percent jump from 2021.
The Department’s record confirms this problem is not limited to nurses. Medical officer openings were reported by 88 percent of facilities, nurse vacancies were reported by 92 percent. Practical nurse vacancies were also frequently reported.
Other clinical occupations with frequent severe occupations include psychologist, psychiatrists and social workers. Among the non-clinical jobs frequently reported as difficult to fill are food service workers and guard. The VA had “25 occupations with severe shortages in at least 20 percent of its facilities.”
Not surprisingly, the VA Medical Center in Palo Alto had the worst vacancy problem, where 114 different occupations were experiencing severe shortages. The area has the highest health care salaries in the country. The average nurse earns $164,760.
Solving the Problem Will Not Be Easy
The vacancy problem is dynamic; Boomers will continue to retire and workers will quit. As this was drafted, the Wall Street Journal posted an article, “Why America Has a Long-term Labor Crisis” focused on the demographic trends and smaller families. The same day McKinsey’s column, “Leading Off,” discussed employee engagement and burnout. Focusing on current job openings fails to consider the long-term consequences of ignoring the reasons for employee turnover.
Going forward, if the day-to-day work experience and specifically the reasons for burnout and ‘quiet quitting’ are not addressed, resignations –and vacancies – are likely to increase. The cost of replacing an employee is high – it includes the time of everyone involved, possible fees to placement firms and/or the added cost to bring in a contract employee, the heightened possibility that the stress will prompt additional employees to quit, and most important it could delay necessary medical treatments. Already patients are sometimes forced to wait weeks and months to see a specialist.
In the healthcare and social assistance sector, the annual “separations” averaged less than 500,000 in the years after the 2008-9 recession, rose to 550,000 in 2019, and at the peak in early 2022 the total was 1.98 million – four times the level a decade earlier. In the most recent month 749,000 left their jobs and 830,000 were hired but the vacancies remain high, 1.6 million. That is higher than any other industry.
Those vacancies can be filled by hires from three groups – young workers starting careers who have the necessary credentials (support jobs may not have education requirements), immigrants trained in other countries, or retirees or drop-outs who decide to restart their healthcare careers.
In the past immigrants have played a prominent role. In 2021, 2.8 million immigrants were working in healthcare. It remains an important option, but other developed countries are also experiencing serious shortages and competing for the best talent. Clearly there are politicians who oppose increasing the number of immigrants.
Young job seekers will always be an important source but it was reported in 2019 that 80,000 applicants were denied admission to nursing programs due to “lack of capacity”. It’s very likely the problem mushroomed in the pandemic. The problem is linked to salaries too low to attract faculty, inadequate classroom space, and too few clinical mentors. More than nurses, of course, need training. The solution starts with developing an understanding of the needed educational programs and a plan to provide funding.
Workers who retired or quit represent the largest pool of talent. Many thousands were forced out before they planned. The numbers are large but unknown. A common thread is their shared commitment to health care. Surveys show many could be induced to ‘unretire.’ Pay is an issue but often more important is scheduling flexibility and steps to reduce stress and age discrimination. Significantly, giving workers a reason not to quit will help avoid added costs and future shortages. Relying on regular employee meetings to discuss work management concerns is a key. That’s consistent with the Magnet hospital strategy.
The Crisis Is Real
The word ‘crisis’ has been used in statements by several healthcare leaders and experts. One notable statement was from the President and CEO of the American Hospital Association, Rick Pollack in the January 27, 2022, New York Times, “Hospital Workforce Shortage Crisis Demands Immediate Action”. He argued, “Our workforce challenges are a national emergency that demand immediate attention from all levels of government and workable solutions.”
In July 2021, Robert Shmerling, MD, the senior faculty editor of Harvard Medical School’s website posted, “Is our healthcare system broken?” He presented 10 arguments that “our system needs a major overhaul.”
The “system” may not be broken but it is clear all citizens do not have access to the care their families need. In a U.S. News listing of the best hospitals in the world, the U.S. has the four top best spots, starting with the Mayo Clinic, and 15 of the top 50, but when the U.S. healthcare system is compared with 12 other high-income countries, the U.S. is dead last on all of the rankings related to care families need.
- On healthcare spending as a percent of GDP, the U.S. at 17.8 percent is 40 percent higher than the next highest Germany 12.8 percent. Canada spent 11.7 percent of GDP and has better health care.
- The U.S. is the only high-income country that does not guarantee health coverage. In 2021, 8.6 percent of the U.S. population was uninsured. That was almost 29 million with no insurance.
- Life expectancy at birth in the U.S. is the lowest in this group of countries at 76. In Canada, its 82; in Switzerland it’s 84; in Korea it’s 83.
- The U.S. rate of avoidable deaths per 100,000 population in 2020 was 336; none of the other countries had more than 200.
When the countries are ranked on treatment of specific health conditions, the results are the same – the U.S. comes in last.
While the data confirm the failures of the ‘U.S. healthcare system,’ it’s important to emphasize that we do not a have a true “system.” The many thousands of fragmented providers are competing for “business” and frequently offer duplicated services. A positive is the strategies of major hospital systems to acquire and upgrade local facilities to attract new patients and expand their services. Consolidations in other segments of the ‘industry’ would help to simplify the management problems. It should reduce administrative costs, but it would not solve the vacancy problem.
State and local leaders are in the best position to assess the need for healthcare services, currently and based on population trends into the future. That would provide the basis for agreeing on regional and local workforce staffing and development plans. A key — the plans need a commitment for adequate funding.
The President’s nursing home proposal is fully warranted but the country needs a broader commitment to rebuilding all segments of its healthcare workforce. A “one-size-fits-all” national health system is not feasible, but state and local public leaders can work with local care providers to prepare for tomorrow’s health needs. Tackling the workforce crisis is an essential step.
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