Ted Chien, President and CEO, SullivanCotter Holdings, Inc.

For the majority of health systems, demand for health care is at an all-time high, with consumer spending projected to grow 5% between 2023 and 2024. These higher patient volumes are creating access challenges within healthcare organizations, which will require restructuring to address rampant labor shortages. Yet, labor shortages inherently create higher labor costs. Government and commercial payer reimbursement cutbacks further challenge the operational landscape, creating a perfect storm.

If healthcare organizations can’t adjust, it will lead to widespread ramifications, including further increases in healthcare costs, potentially lower quality of care and even less patient access, and it will have a long-term detrimental impact on population health.

Modernizing Clinical Staffing Models

Imagine a scenario where a healthcare organization is staffed to meet the exact needs of its patient population, where provider skill sets are accurately aligned to these needs and where individual or teams of clinicians are incentivized to deliver care in a high-quality, efficient and proactive manner—an aspiration we can all support.

Unfortunately, in the U.S., our traditional healthcare models are not designed to achieve this scenario. To work toward it, organizations need to change their operational models and systematically rethink organizational design strategies.

As a starting point, healthcare organizations must understand the needs of the patient population in order to lay the foundation for transformation. Once needs are understood, organizations can define the required number, type of clinicians and clinical team model.

Various factors, such as population size, demographic makeup (age, gender, ethnicity), existing health conditions and geography all impact patient needs, so having the right data to guide strategy is critical.

Optimizing Organizational Design

Insight into the size, shape and cost of the employee population is also needed to optimize organizational design and achieve sustainable financial success. Evaluating workforce structure—which includes the development of a well-defined career architecture, consistent job titling and leveling, an effective span of control and more—can help put the right people in the right place at the right time.

Over the last decade, many M&A transactions provided value through expanded services and greater patient access. But financial value and additional capital didn’t always materialize. Waiting too long to adjust structure, reduce repetitive roles or fill gaps can derail financial success, employee retention, care delivery and more.

Given past missed opportunities, organizations are more closely evaluating these synergies earlier in the process. New applications of deep data and strategic analysis are giving organizations a more thorough understanding of the optimal and desired size, shape and cost of their post-M&A workforce.

In some cases, this may lead to centralizing administrative or operational tasks under one services banner or creating an extension or integration as a new revenue source, such as creating Civica Rx, the nonprofit drug company formed by a collection of hospitals to deliver generic drugs.

Modifying Our Vision Of Talent

While optimizing organizational design and workforce structures lay the foundation for an effective talent strategy, it’s only half the battle. Optimal staffing requires a robust talent pipeline. Current education, employment and compensation models favor physician specialties such as cardiologists. However, education and time spent in residency means that new specialists won’t provide experienced value to a health system for eight years or more.

While building a sustainable pipeline of long-term talent is critical, it’s also important to address current shortages. Prioritizing efforts in three areas can help improve staffing and empower care teams to practice more effectively.

1. Upskilling clinical talent in preventative health can widen the bench of clinicians who can diagnose specific illnesses.

For example, training ophthalmologists to, as part of annual eye care, diagnose diabetes based on observation of a patient’s ocular blood vessels. Or helping radiologists connect with cardiologists to flag patients with potential heart conditions as noted by calcifications in mammograms. By upskilling clinicians already in the field, we can quickly bolster the bench without adding headcount.

2. Building the nurse pipeline.

Compared to a physician, a student entering a nursing program right out of high school can add measurable value within two to three years. And much of this training can be done at local associate programs within the communities these employees serve.

Health systems, especially those in more rural areas, may need to rethink how they support the local nursing pipeline to encourage more diversity and equity in hiring practices. For example, a community-based health system could cover the two-year associate tuition for a nursing student with the understanding that the student would commit to two years of post-graduate employment with the organization.

3. Paving the way for pharmacy techs, assistants and phlebotomists.

These roles have a shorter path to clinical practice and are among the most in-demand roles. Health systems must encourage interest starting in high school to ensure roles are filled and, where possible, expand their roles to allow nurses to operate at the top of their license. Health systems compete for talent with graduates who may choose other entry-wage jobs. So it’s important to educate young people on the lucrative and stable career paths in health care that are not as readily available in retail or food service.

Successfully operating at this level requires a wholesale shift in mindset and organizational design. One example of a more progressive approach—whether you agree with it or not—is Tennessee’s move to offer experienced international medical school graduates (IMGs) a pathway to medical licensure without completing U.S. residency training. Because they are still required to complete postgraduate training in another country and/or have been licensed and practicing as a physician, this can speed up the pipeline of IMGs by reducing duplicative residency experience that is less available to them.

Effectively solving current operational and labor challenges doesn’t mean simply hiring more. It means having a clear understanding of the optimal system design, reducing or expanding the roles of existing employees and actively nurturing nontraditional pathways. Only by achieving these factors will we be on the path to success.

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