It has been a year since COVID-19 struck senior care with a vengeance, and the dual pressures to ensure the financial health of an organization along with the physical and mental health of its residents has been intense and long-lasting. While the recent pace of senior care vaccinations suggests there is a proverbial light at the end of this dark tunnel, the lasting impact of COVID-19 will be felt for years.
COVID-19 is still having a tremendous impact on revenues, expenses and profitability, placing many organizations, even those with previous healthy balance sheets, under great financial pressure. Further complicating the financial challenges of census and PPE, testing, and vaccinations expenses are the related issues of talent availability. Even prior to COVID-19, talent scarcity and lack of applicants was a significant challenge in senior care.
The pandemic made this already-difficult situation worse by increasing rates of early retirement, reducing the available talent pool through increased unemployment insurance payments and removing caregivers from the labor market due to the logistical challenges that came from school closures. All of this has resulted in an even greater struggle to fill open positions and retain current stuff, leading to an increase in premium labor spend.
When it comes to managing uncertainty during this time, there are several key strategic questions and all of them involve talent in a significant way. How will you rehire the nurses who chose to leave in the early stages of the pandemic? Can you lure back those employees who took early retirement? Can you shift costs to reduce your overall labor spend without sacrificing quality of care? Can you more effectively attract new talent and retain existing staff through more modern talent management approaches?
Staffing drives outcomes
One unfortunate aspect of COVID-19 is that it highlighted the urgency of addressing the above challenges: Multiple research studies have now shown a strong connection between rations of caregivers to patients or residents and resulting resident outcomes during this pandemic.
Three major studies have linked staffing levels to COVID infection and mortality rates, both in nursing home settings and in hospital settings.The first study focused on nursing home outcomes and found that every 20-minute increase in RN staffing (per resident day) was associated with 22% fewer confirmed cases and 26% fewer COVID deaths.
The second study also focused on nursing homes and found that higher nurses aide hours and total nursing hours are associated with a lower probability of experiencing an outbreak and with fewer deaths.
A third study published in Lancet linked RN staffing in hospitals to decreased mortality rates.
It is a straightforward calculation: With less staff, it’s harder to follow infection control protocols and it’s more likely that staff are caring for more residents and patients per team member. This also increases the number of contacts and potential exposure points.
Lower staffing levels are no longer just a cause of additional turnover or disgruntled staff. We now know that low staffing levels increase mortality rates and poor resident outcomes. The hard part is what to do about it. Current approaches clearly are not working and inorganic approaches like additional overtime or agency spend are untenable financially.
Organizations must strategically rethink their investment in talent management technology, HR and leadership team skill sets, and even overall budget. While it’s hard to imagine spending more money in light of current financial strain, the reality is that most organizations are already spending hundreds of thousands or even millions of dollars on these problems through turnover costs, premium labor spend, agency costs, and quality of care impacts.
Invest now or pay later
On average, the hard dollar cost to replace a CNA is around $3,000 per year. For a RN or LPN, it’s more like $13,000. With turnover rates in the 30-50% range, this is a non-trivial spend. A proper investment in technology and training can help organizations dramatically reduce these turnover rates, thereby reducing turnover expense and premium labor spend while simultaneously increasing staffing levels and staff tenure, which both contribute to improved quality of care.
Another key area of investment should focus on talent acquisition with modern hiring solutions that support texting, video interviewing, candidate relationship management, talent networks, mobile apply technology and sophisticated career sites. Reducing time-to-fill through streamlined and efficient hiring practices can reduce premium labor and agency spend.
Or, if you have chosen not to backfill missing talent, reducing time-to-fill can improve RN, LPN and CNA resident ratios thereby improving star ratings, staffing levels and quality of care. In either case, investment in talent acquisition can improve the financial health of the business or physical and mental health of patients and residents.
There is reason for optimism in the days ahead, but these talent challenges will not go away. If anything, they have been worsened by the pandemic.
The quality of your care and service delivery starts and ends with your staff. The financial health of your business starts and ends with your personnel spend. Investing in your core talent challenges of retention and talent acquisition can help you drive a higher quality of care while improving the lives of your staff and your residents and patients.
David Wilkins is chief strategy officer for HealthcareSource.