PINC AI™ Data: High Turnover Leads to Record Wages in Clinical Positions

High turnover across clinical positions is forcing hospitals to increase pay and turn to overtime and outside agency labor in order to provide safe and reliable patient care. According to a new PINC AI™ analysis, turnover in high-stress departments like intensive care is up nearly 45 percent when compared to a pre-pandemic baseline in 2019, while overall turnover is up nearly 23 percent across nursing departments.

This means that, on average, more than one in three clinical team members have left a job since the COVID-19 pandemic began.

Source: PINC AI Workforce Data

Considering that most businesses strive to keep turnover at or around 10 percent, these numbers are concerning and more than double the best practice.

When jobs turnover and remain unfilled, this creates added stress on staff who remain. But the problem is even more severe in healthcare – which is inherently a team-based profession. In fact, when turnover is high in healthcare, it has repercussions for quality, as patients in units with lower staff ratios are 15 percent more likely to acquire a healthcare-associated infection during their stay and are more than 48 percent more likely to be readmitted. Combine this with the daily and weekly rolling supply chain disruptions – and it all may exacerbate the turnover problem and contribute to overall burnout.

To retain existing clinical staff, hospitals have been dipping into their wallets. Intensive care unit (ICU) base hourly rates for nurses have increased 5.5 percent from 2019Q4 to 2020Q3. However, these increases in regular pay have not been enough to provide care during the pandemic, and hospitals are now using more overtime and agency staff to accommodate surge demand. When these added costs are considered, overall average hourly rates (accounting for overtime, agency and other premium pay) have increased 12.4 percent. For some nursing positions, pay is approaching $100,000 a year – nearly double the median household income of $56,516.

These wages are not sustainable because the hospitals paying these added costs have no way of recouping the extra expense. Medicare, Medicaid and most private payers pay flat, fixed fees for all care related to treating a condition, regardless of how much that care actually costs. So, when wages rise faster than reimbursement, the balance comes straight out of the hospital’s bottom line. This is why some are now predicting that more than half of all hospitals will have negative margins by the end of 2021 – a trend that could be dire for some community hospitals.

How to Manage Costs While Taking Care of Employees – The PINC AI Difference

There are myriad reasons for the high cost and short supply of qualified clinical labor – meaning that solutions need to be holistic and multivariate as well.

Predictive Models

Using data from over 650 acute care facilities nationwide, PINC AI leverages machine learning to predict whether a specific department will face a critical shortage of clinical staff within the next eight weeks. Considering that it often takes 30-45 days to fully onboard new clinical staff members, this predictive model could provide an early warning system, enabling health system leaders to take staffing action before a shortage occurs. The model may also be used to identify departments where current staffing is likely sufficient over the near term, enabling excess resources to be aligned with the areas of greatest need.

Benchmarks for Optimal Staff Performance

PINC AI can provide health systems with productivity benchmarks against specific peer groups to identify areas of sub-optimal performance. These data markers pinpoint areas or departments where leaders may need to adjust staffing levels based on skill mix, staff configuration, shift configuration, etc. to manage patient care demands.

Work Redesign

The pandemic exacerbated many common, pre-existing challenges that hospital leaders face, including ensuring optimal patient flow and operational efficiencies across departments. These combined with labor challenges require sophisticated and innovative solutions. PINC AI advisors are available to work with health system leaders experiencing current and future challenges to assess opportunities and implement smart solutions that work.

Care Variation

Care variation creates inefficiencies and additional work for frontline caregivers. PINC AI advisors reduce care variation by empowering multi-disciplinary teams to drive consistency in care pathways using data and literature, improving outcomes, and reducing unnecessary treatment, avoidable errors and length of stay. PINC AI advisors also ensure systems are in place to sustain and evolve quality clinical outcomes in a supportive environment.

Manage Agency Costs

Premier has national and local group purchasing contracts to help control the costs of full-time equivalent (FTE) and/or contingent staff for both clinical and non-clinical assignments. With vast healthcare staffing industry insights and end-to-end talent solutions, our strategic suppliers guarantee return on investment (ROI) – evidenced by the fact that Premier has been able to achieve discounts of 10 percent or more on talent solutions throughout the pandemic.

Consider International Labor

To help manage through the delta surge, Premier played a leadership role in urging the Biden Administration to expedite visas and other approvals needed for foreign nurses to enter the country to address the staffing shortages. A backlog of 10,000 international nurses has built up during the pandemic because of an inability by the U.S. State Department to process visa applications and prioritizing and expediting these are critical to reducing the labor pressure across the nation. This progress is providing some short-term relief, and Premier is working with our members and staffing firms to help bring these international nurses to the U.S. Longer term, Premier is advocating to Congress for more clinician training funding to help address staffing challenges.

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