In the midst of widespread skill shortage in the US healthcare sector, the nursing sector requires special attention. The Bureau of Labor Statistics estimates that 3.17 million registered nurses (RN) are employed in the USA as of May 2023, making them the largest group of expert healthcare workers. Numbering far more than the number of doctors across specialties, nurses are entrusted with a relatively higher portion of healthcare effort as well. But at least 29% have expressed an intention to leave their jobs to avoid direct patient care, according to McKinsey. Around 15% intend to leave the industry to take up alternative careers.
Dwindling workforce of Registered Nurses
The median age of the nursing workforce is 46 years, according to the American Association of Colleges of Nursing. More than 25% will retire in the next 5 years or sooner. The gap is widening because the incoming workforce is not catching up fast enough. Employers are showing a strong preference for nurses with advanced degrees, according to an AACN survey. However, the education system is unable to meet this demand, partially because they are unable to find adequate number of qualified nurses to function as teaching staff.
Evolving demand in the healthcare sector
US government agencies estimate that over 203,000 new positions will be created for registered nurses by 2031. In addition to accounting for normal population growth, the rising average age of the US population will also cause an increase in demand for healthcare services, especially nursing services. People aged above 65 are three times more likely to require a hospital stay, and twice as likely to consult with doctors. Longevity in human life leads to a greater need for specialized healthcare support for older individuals, increasing the workload of the already pressured staff.
And the demand is not just growing, it is evolving to be of a more advanced nature. It is evident that Registered Nurses are taking on many diagnostic and treatment responsibilities that were once handled directly by specialized doctors. In turn, tasks like patients’ daily care and administrative documentation which are conventionally handled by Nurses are handed over to the next level of staff with lesser credentialing requirements
Cost pressures on the healthcare system
The shortage of nursing staff forces hospitals and practices to seek alternative staffing solutions. This includes hiring temporary staff at a higher cost than in the normal case. However, due to varying regulations, strict credentialing requirements and laws across various states, the talent pool is severely restricted. Traveling nurses draw a higher pay than regular staff nurses, and this attracts more qualified nurses to this career option. Pay may vary based on regional demand and labor regulations, and the variety in exposure will further drive up these numbers. Nursing talent agencies also gain higher revenues for meeting the growing demand, pegged at around 15 to 20% gross margins. But the cost increase to hospitals and provider organizations need to be offset at some point in the chain.
Negative impact on patient experience
Patients are the end consumers of healthcare services, which means every single link of the value chain has an impact on their experience. Nurses have a significantly larger exposure to patients than doctors – both in terms of time spent and the nature of duties. The shortage of nurses directly affects the care received by patients, and increase their waiting period for each encounter. Lack of availability of healthcare support in medical emergencies will greatly upset the patient-provider equation. The fact that nurses are overworked and possibly burnt out could often lead to distractions, lack of clarity in diagnosis and treatment and even inadequate behavior. Temporary staff needn’t have an emotional connection even with regular patients. But most significantly, the higher cost of staffing typically gets passed on to the patients (and/or their payer contracts) and drive up medical bills in an already expensive healthcare culture.
Efficient operations and Revenue Cycle Management
The healthcare industry is facing a perfect storm of headwinds, which impacts the key stakeholders financially, professionally, mentally and reputationally. At this point it is important to ensure that the healthcare system is kept running at optimal efficiency and productivity. The strategic adoption of technology into the healthcare operation, such as Electronic Health Records and predictive analytics platforms is a robust foundation. Outsourcing the revenue cycle to specialized partners also allows providers to free themselves from the administrative burden and distractions. At the same time, professional management of the revenue cycle ensures that providers are assured of optimally realizing the revenue due to them.
Addressing the staffing crisis in the US healthcare sector requires a comprehensive approach. Three distinct focus areas may be considered:
- Improving working conditions and equipment for current workforce
- Expanding the workforce using remote supplementary talent
- Outsourcing key processes to enhance efficiency and productivity
- Strategic technology for streamlining operations
Swift action is required on all four counts to ensure that the US healthcare system doesn’t fall into an even more complicated state than it is currently in. Innovation and timely investment are key drivers for any viable solution.
