Many healthcare watchers and investors were taken by surprise when more than 75,000 Kaiser Permanente workers went on strike in the first week of October 2023. The walkout is reported to be the biggest in U.S. Healthcare. Other hospital systems such as Tenet and HCA are or may be on the brink of a work stoppage. Even Walgreen’s and CVS have been dealing with walkouts and labor unrest.
The inclination to organize and sound off for better working conditions and more patient-centered job conditions continue to spread through the healthcare systems. During the second week of October, the Allina Health System in Minnesota voted to unionize, and this time the movement got a boost from more than 500 physicians, nurse practitioners and physician assistants. The Allina group would become the largest private-sector doctors’ union in the country. The clinicians say they are frustrated working understaffed shifts that cause burnout while being overwhelmed with administrative duties that do not include patient care.
What do most dissatisfied healthcare workers want in the post-COVID environment? Pay raises to match the rising cost of living and new hires to relieve understaffed departments that ensure patient safety and quality care.
Only a year ago the news was reporting that healthcare systems such as HCA were slashing contract labor to cut costs. Earning reports showed the ravages of COVID-19 with losses in the billions of dollars in the healthcare sector. Wall Street showed lowering stock prices, and the operating margins for healthcare systems were under siege. This affected the bonuses paid for financial performance awarded to administrative positions. Since 50% of the budget in healthcare systems is related to payroll, cuts always start in that sector of the business. Contract labor costs have soared in demand and utilization. Healthcare employees working as travelers for nursing, radiology, physicians, and other healthcare staff filled the vacant roles over the last few years, commanding higher wages. This morphed into many more workers leaving their permanent positions and taking travel positions with higher benefits and salary. One report found hospital costs had risen by one-third with 20% of healthcare workers quitting their jobs and another 25% intending to become travel staff.
Hospital management also showed an exodus of executives responsible for the delivery of healthcare. Some retired or moved on to other less challenging environments. This has produced a bidding war for those who are qualified to fill these positions pushing up salaries and benefits for those who remain. The remunerations for officers of large healthcare systems have exceeded the $1 million mark, and those at the helm of large pharma, biotech, or equipment companies have become the” high rollers” of the healthcare industry.
As the financial bottom line for staffing increased and the burden of the Covid 19 pandemic lessened, hospital and healthcare facilities tightened their belts to try and recoup the overload on the budgets. This meant scaling down the travelers and freezing the new hires that would fill the empty positions from resignations. In hospitals, overtime was reduced, but overwork was not. Time slots for outpatient procedures were reduced, and more patients were booked for the day surgeries and imaging. This has produced an increase in safety events and changes in the methods of care delivery. Recent technology has assisted, but implementation time has increased more demands in terms of data entry.
In November 2022, a survey from the Beryl Institute found only 40% of Americans rated the quality of U.S. healthcare as “good” or “very good”. In March 2022, the rating for “good” and “very good” was at 46%. The study reported showing a significant slide in the later part of the year. When asked what the most important aspects of their healthcare were, consumers rated affordable insurance options as most important along with out-of-pocket costs and premiums costs.
In describing their experiences in healthcare, patient consumers were concerned that they were not being listened to. The words used to report their negative experiences were “rushed”, “rude”, “dismissive”, and “long”. More than 2/3’s agreed their trust in healthcare had declined in the past 2 years. This decline in trust was due to the perception that the healthcare system is only out for themselves, and 44% related their eroding trust was due to pandemic-related issues.
Hospitals faced higher expenses and lower volumes at the start of 2023. Patient volumes, emergency department visits, discharges and total revenues were down at the beginning of the year. The shift of patients to outpatient delivery for more care and consistent higher labor expenses are a fact of the coming year. There will be more financial challenges ahead.
This paradigm shift in care delivery does not solve the basic problems of understaffing in the care facility. We should brace for more challenges ahead.