Staffing costs of higher pa­tient vol­ume ex­ceed­ing ex­tra rev­enue

Modern Healthcare - - NEWS - By Beth Kutscher

In­sur­ance ex­pan­sion un­der health­care re­form is start­ing to yield in­creased pa­tient vol­ume for hos­pi­tals, but the costs of staffing up for more pa­tients are eclips­ing the ad­di­tional rev­enue.

Earn­ings re­ports for not-for-profit sys­tems in the first half of the year show that many providers are see­ing ris­ing salary and ben­e­fit ex­penses cut into rev­enue gains, lead­ing to smaller op­er­at­ing sur­pluses. The Pa­tient Pro­tec­tion and Af­ford­able Care Act is “shift­ing the way providers are think­ing about their la­bor pools,” said Jeff Jones, man­ag­ing direc­tor at Huron Con­sult­ing Group.

Com­pen­sa­tion costs are in­creas­ing as more sys­tems move to a physi­cian em­ploy­ment model to drive re­fer­rals and pre­pare for pop­u­la­tion health man­age­ment. In ad­di­tion, health­care re­form is driv­ing de­mand for spe­cific skill sets such as ex­pe­ri­ence with elec­tronic health-record sys­tems.

The Cleve­land Clinic, in its sec­ondquar­ter earn­ings re­port, said man­age­ment is fo­cused on the re­cruit­ment and re­ten­tion of qual­i­fied staff in many clin­i­cal ar­eas as the Af­ford­able Care Act in­creases the num­ber of in­sured Amer­i­cans seek­ing care. “Th­ese ef­forts pres­sure the sys­tem’s salary cost struc­ture, as well as em­ployee-ben­e­fit costs,” ac­cord­ing to the re­port.

Salaries are in­creas­ing be­cause the de­mand for highly skilled health­care work­ers is out­strip­ping sup­ply, said Jay Sage, vice pres­i­dent of busi­ness devel­op­ment at Rand­stad Health­care, a staffing firm.

“Health sys­tems are forced to look at how ef­fec­tively they’re man­ag­ing their la­bor,” said Brendan Court­ney, pres­i­dent and CEO of Par­al­lon Work­force Man­age­ment Solutions.

Ways that sys­tems are man­ag­ing la­bor costs in­clude having em­ploy­ees take on mul­ti­ple re­spon­si­bil­i­ties, us­ing data an­a­lyt­ics to pre­dict pa­tient de­mand, and cre­at­ing staffing pools of part-time or sea­sonal em­ploy­ees that can be shared across hos­pi­tals or sys­tems.

“The whole is­sue of staffing strate­gi­cally is go­ing to be cru­cial to the bot­tom line,” Jones said.

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