Confronted with an urgent staffing crisis over the past two years, most provider groups have taken a seemingly intuitive approach: Get More People

This strategy has, to a degree, patched a leaky bucket. And yet, for most providers, staffing remains an urgent challenge and temp agency costs have surged to unsustainable levels.

Our perspective is that a paradigm shift is needed. Get More People strategies aren’t wrong, but they also aren’t enough. Curating and maintaining an effective workforce requires two parallel capabilities: Get More People, yes, but also Optimize Your Workforce.

Below we explore the potential impact of three critical levers of workforce optimization – float pool initiatives; scheduling optimization; and data-driven retention – and share potential first steps for innovating providers. 

The imperative to change the staffing paradigm

Simply put, a healthcare organization’s most precious resource is its existing workforce. 

Filling as many shifts as possible with existing staff has emerged as a pressing priority, from both a cost and a quality perspective.

On the cost side, the numbers are staggering. The American Hospital Association recently reported that US hospital system spend on temp labor has increased 5x since pre-pandemic (source) This has significantly contributed to a 37% increase in labor costs per patient.

Meanwhile, staffing coverage challenges and outsourced staffing have taken a toll on care quality and patient satisfaction. Anecdotes abound, and the AHA has rung the alarm bell, noting that providers are increasingly challenged in providing care for patients. (source)

The many facets of workforce optimization

While the extent of staffing challenges will ebb and flow, we sadly expect shortages to be an enduring challenge for US healthcare providers over the coming decade. 

But there is hope. Precisely because workforce optimization has been less of a focus than Get More People strategies historically, we now see improvements there as low-hanging-fruit. 

We see three tactics popping up with increasing frequency among innovating provider groups:

• Float pools or internal temp agencies: The most effective lever to reduce external temp spend is reducing demand by setting up internal mechanisms to supply demand at lower cost. We see this happening in two ways: 1) Facility-based provider groups with geographic density in a region creating float pools that break down facility-level staffing silos and enable workers to fill shifts in neighboring facilities. 2) Larger organizations – health systems in particular, but we’ve also seen this at large SNF/assisted living groups – setting up their own internal staffing agencies, enabling them increased control over the deployment of temporary staff, as well as the cost mechanics.

• AI-powered scheduling: Systems for managing “difficult to fill” shifts (no-shows, dropped shifts, last-minute requests) remain manual at most provider groups. At best they are “tech-enabled” by technology built primarily to manage different forms of scheduling (e.g., blocking shift schedules weeks in advance, with strong connection points to billing and other back-end systems). When tough shifts come up, schedulers — talented and thoughtful, yet increasingly overwhelmed – are expected to manage a complex puzzle of contractual requirements, union parameters, overtime costs, and practitioner and patient demands, all within their heads. They do this work heroically, but often find themselves bogged down by manic late-night call-arounds, begging and borrowing staff time to fill urgent coverage needs. This set-up can be dramatically improved, from the perspective of both the scheduler and the workforce. Thoughtful AI-based technologies are now proving the ability to manage these complex dynamics effectively in real-time, filling more shifts, with a higher satisfaction rate – and leading to better experiences for schedulers and staff alike.

• Data-driven retention strategies: The most straightforward way to maintain a high-performance workforce is to retain strong workers. Easier said than done, for sure. But here, too, we see technology helping bridge the gap. Recent research has shown schedule flexibility as an underappreciated desire of healthcare workers – and a key lever for staff retention. (source) Tactics like those discussed above – float pools, automated scheduling technologies – enable provider groups to modernize their staffing models, embracing part-time workers who might otherwise need to drop out of the workforce or sign on with a temp agency, while providing more day-to-day flexibility to top-performing staff, leading to increased retention rates. 

Taken together, tactics like these show significant impact potential. In the past six months, we have seen leading provider groups reducing their spend on temp agencies by 30-50%, increasing the percentage of “difficult” shifts they are able to fill (from a typical baseline around 50% to more than 90%), and increasing average staff retention by 1.5-2x.

A practical starting point

Making workforce optimization a strategic priority may feel daunting, particularly at a time when operators face numerous “hair on fire” challenges.

Fortunately, pioneering providers have already established a playbook for success here. What we’ve seen at Reverence – managing such transformations for health systems, facility based provider groups, and in-home care providers – is that most still have “low hanging fruit” changes to make, achieving significant staffing or cost impact with relatively minimal operational lift and limited technological updates.

This starts with simple diagnostics to understand the dynamics within your own workforce. It culminates, however, in fundamentally improved workforce operations. It is hard to overstate the strategic import of these improvements, given the realities of the staffing environment.