Hospital Leaders: Workforce Shortages Persist Amid Stabilization

What You Should Know:

– Hospitals and health systems are seeing some signs of stabilization and margin improvement, but challenges around workforce, expenses and patient access persist according to Kaufman Hall’s 2023 State of Healthcare Performance Improvement report.

– Kaufman Hall experts expect that it will be a slow climb for hospitals to return to the 3-4% operating margins that help ensure long-term sustainability. While staffing and capacity issues have clear implications for revenue, an increased rate of claims denials—reported by 73% of respondents—has had the most significant impact on hospitals’ revenue during the past year.

Patient Access to Care Concerns

Patient access to care is a growing concern as hospital and health system leaders work to figure out what sustainable operations look like following a complete transformation in how patients interact with the healthcare system and providers. The report found that 66% of respondents’ institutions have run at less than full capacity at some point during the past year due to shortages, and 32% of respondents say that patient concerns or complaints about access to physicians are increasing.

Contract Labor Utilization Improvement

One area that is showing improvement is the utilization of contract labor, which appears to be declining. Only 4% of organizations are experiencing increased utilization of contract labor, compared to 27% last year. Almost all surveyed (98%) are pursuing one or more recruitment and retention strategies, including raising starting salaries or the minimum wage (90%).

Other key findings of the report include:

– Patients are increasingly seeking care in outpatient settings, as almost half of respondents say that volumes for outpatient surgery and provider clinics are above pre-pandemic levels.

– Despite the ongoing labor crisis, no respondents believe that their organization has fully optimized the automation technologies it has invested in.

– Supply chain issues have improved, but nearly three-quarters of survey respondents are still encountering distribution delays.

Report Background

The Kaufman Hall State of Healthcare Performance Improvement report is an annual publication that analyzes the performance improvement and cost transformation efforts of hospitals and health systems. This year’s results are based on survey responses from 106 hospital and health system leaders nationwide, including representatives from all regions of the country as well as from urban, suburban and rural markets.

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