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of an existing healthcare-workforce shortage.
“So, the pandemic caused a significant challenge amidst what was
already several headwinds that were providing stiff challenges for smaller hospitals across the country to overcome,” he went on, “forcing them to transform, to look differently, to meet those challenges and the needs of our community.”
Elaborating, he turned the clock back to late 2019 for perspective. He
“What COVID laid bare is that all of these issues are there, and that it’s incumbent on us to be creative, accelerate the solu- tions, and leverage a lot of the tools that we were in many ways reticent to use, such as telehealth and virtual visits.”
DR. LYNETTE WATKINS
said that there was already significant movement in how healthcare was being delivered. More services were being provided in settings outside hos- pitals, he explained, with surgeries taking place in outpatient, ambulatory settings. Meanwhile, insurance companies were adjusting as well, covering certain types of procedures, such as joint replacements, only if they took place in those lower-cost settings.
“With that, inpatient volume was beginning to decline by a few percent- age points,” Roose said, adding that those shifts were beginning to accel- erate when the pandemic hit. Overall, there has been movement away from the fee-for-service model that had dominated healthcare delivery
for decades and a shift toward promoting wellness, he explained, but not enough movement to shelter hospitals, especially smaller community hos- pitals, from those headwinds he described earlier.
“It has certainly not kept pace with the dramatic impact on volume and
the lack of reimbursement for fee-for-service care that has occurred to make up that gap,” he went on, adding that staffing shortages already exist- ed before the pandemic, but they, too, were exacerbated by COVID and its many side effects.
Watkins agreed, and, like others we spoke with, she said revenues have certainly improved since the depths of the pandemic, but they are still not at pre-COVID levels.
And there are many other forces at play that are challenging hospitals, she added, including a shortage of workers at post-acute facilities such as nursing homes, which often leaves patients who are otherwise ready for discharge with no place to go, putting more pressure on hospitals.
“We have two, three, or sometimes more patients who are ready for medical discharge, but when we don’t have a place to send those patients, so they stay with us,” Watkins said. “And that means that some patients who need to in an acute-care facility are in the emergency room or cannot get in; that’s been a huge, huge challenge.”
Work in Progress
One of the factors greatly impacting hospital finances is the ongoing workforce crisis, which has certainly increased the cost of providing care. Roose told BusinessWest that, while Mercy’s overall workforce is down perhaps 20%, due to a variety of factors, its workforce costs are still 7% to 8% higher than before the pandemic.
Indeed, with many positions, not just nurses, hospitals have had to rely on contract employees, which are considerably more expensive than those on staff.
But there are other factors as well, said Watkins, including additional overtime, bonuses needed to attract job candidates, shift bonuses, and more.
“It’s a huge challenge, and it significantly affected our financial perfor- mance, as well as that of other systems in the Commonwealth and across the country,” she said. “And we have to make sure that we are staffed to take care of the patients here that are sicker and that are staying longer.”
Elaborating, she explained that Cooley Dickinson used very few con- tract nurses prior to the pandemic, but the need for such personnel has risen dramatically due to retirements, burnout, and individuals simply leav- ing the profession to do something else.
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