Nursing shortage puts patient health - and the hospital's bottom line - at risk.

Removing hurdles to a more effective recruitment and hiring process

​By Iman Abuzeid, M.D.

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There is a crisis in the U.S. healthcare system, one that puts patient lives at risk and threatens financial viability for hospitals across the country. It doesn’t appear to be slowing down anytime soon. The problem is a shortage of registered nurses (RNs) and nurse practitioners (NPs) with nearly 200,000 vacant positions at any given time.(1)

The shortage’s impact on patient care is substantial. As hospitals work to fill vacancies, existing staff are forced to work long hours and take extra shifts. But this approach brings problems of its own. Several studies show a direct correlation between the number of hours RNs work with the quality of patient care. Some of those findings include:

• Significant association between mortality and exposure to below-target staffing or high-turnover shifts.(2)
• Correlation between fatigue and a high patient-to-nurse ratio to the instance of medication errors.(3)
• 50% of respondents to a national survey said their nursing units were working more hours than ideal for providing the best patient care, 49% said they work in “crisis mode, trying to do too much too quickly,” and 65% reported they used “more agency/temporary staff than is best for patient care.”(4)
• Direct correlation between nurses working shifts of more than 13 hours and patient dissatisfaction with the quality of their care.(5)
• Increased readmissions, costing an estimated $26 billion a year.(6,7)  

 
In a time when one out of every ten deaths in the U.S. can be attributed to medical errors, it is essential to address the underlying causes of the shortage quickly.(8)
 
Impact on revenue and costs
The cost of RN turnover on large acute care hospitals is estimated to be as high as $6.4 million.(9) A 300 to 500 bed hospital stands to lose nearly $90,000 a day when understaffed, and the cost to replace a single RN is up to 1.3 times their salary.(10,11) The impact on patient care from the shortage can add an additional financial threat: more than $3.8 billion was paid out in wrongful death lawsuits in 2017 alone.(12) The cost of overtime and reliance on expensive temporary workers and travel nurses continues to drive costs up, to the point where almost 50% of a hospital's revenue is spent on labor costs alone.(10)
 
Without adequate numbers of qualified registered nurses, hospitals may have to temporarily close – or even shut down – patient care units and other areas requiring nursing care, further reducing revenue streams and eroding cash flow.
 
By increasing the number of registered nurses, hospitals can save nearly $3 billion in the form of reduced hospital stays related to adverse patient events and readmissions.(6)
 
How we got here
There are three primary factors in the current shortage, each complex in and of itself. Together, they have created the perfect storm.

• Insufficient candidate pool. There are approximately three million nurses in the U.S. today. However, nearly 700,000 are expected to leave the workforce by 2024, adding additional pressure to the existing shortage.(13,14) Filling these vacancies won’t be easy as nursing schools across the country are experiencing a shortage of teachers and available classes. More than 56,000 qualified applicants – some already working in the field – were turned away by schools in 2017. (13)

 

• Inefficient recruiting and onboarding processes. Many hospitals rely on online job posting sites such as Indeed, LinkedIn and Monster. But this method is slow and ineffective with a hire-rate of just 0.2%. A typical hospital recruiter would need to screen 500 online applicants a week to hire just one person. Even a hospital’s own job board typically results in a mere 2.6% hire rate to applicants screened. While best practice for the hiring process is less than 25 days, the national average is 82 days, with some areas like the San Francisco Bay Area even higher.(15)

 

• Turnover. The best practice rate for turnover in the healthcare industry is below 6%, but the national average is 17% - 19%.(16) Nearly 43% of newly licensed hospital-based nurses leave their job in the first three years, and 33.5% leave within the first two.(17) For millennials, the turnover is even faster.(18) Hard mental and physical labor, long hours, and short staffing are among the top reasons cited for leaving. Nurses working ten or more hours per shift are 2.5 times more likely to report intension of leaving the hospital than those working shorter shifts.(19)

 
Implications of an aging population
By the year 2030 one in every five U.S. residents will be age 65 or older. The same group will account for 22% of the population by 2050.(20) This is a significant factor in the nursing shortage as aging adults generally need more care; 80% have at least one chronic condition and 77% at least two. The top conditions – heart disease, cancer, stroke, and diabetes – typically require the higher level of care that RNs provide.(21) If not addressed, the nursing shortage could have devastating consequences for the nation’s senior population for years to come.
 
The physician connection
The highest quality physicians want to work at hospitals with the best reputation for quality care. Temporary or agency staff aren’t as familiar with a hospital’s protocols, which can lead to subpar care and slower response times. This can frustrate the best physicians who expect a higher level of competence, driving them to seek other, better staffed hospitals. When quality physicians leave, it can negatively impact outcomes, reimbursements, and patient satisfaction scores.  
 
Success story
A large healthcare system in the Western U.S. needed a way to streamline and shorten their recruiting and hiring process. The hospital chose to partner with Incredible Health. Using its proprietary screening process, Incredible Health was able to more efficiently sort through thousands of candidate data points to identify the best matches for the hospital and the nurse. The results were quick and substantial, and the hospital shortened its recruiting and hiring process from 70 days to less than 30. Other achievements include:

• New nurses hired within the first few days, including trauma coordinators and ER supervisors
• 10% of open positions filled
• 50% reduction in cost to hire
• 30 minutes to set up new team members

 
Today, 60% of Northern California hospitals use Incredible Health to help find their registered nurses.
 
The time to act is now
Hospitals and health systems already feel increased revenue pressure from declining reimbursements and growing patient payment responsibility. The nursing shortage only exacerbates their pain, and it is likely to get worse as the population ages. Leveraging technology to streamline and the shorten the recruiting and hiring process can ensure hospitals are able to provide the best quality care by the best quality nurses for years to come.
 
 
Sources
1 https://www.careerbuilder.com/share/aboutus/pressreleasesdetail.aspx?sd=12%2F3%2F2015&id=pr924&ed=12%2F31%2F2015
2 https://www.nejm.org/doi/full/10.1056/NEJMsa1001025
3 https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3885144/
4 https://www.ahrq.gov/sites/default/files/wysiwyg/professionals/quality-patient-safety/patientsafetyculture/hospital/2016/2016_hospitalsops_report_pt1.pdf
5 https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3608421/
6 http://ana.aristotle.com/SitePages/safestaffing.aspx
7 https://www.congress.gov/115/bills/hr5052/BILLS-115hr5052ih.pdf
8https://www.hopkinsmedicine.org/news/media/releases/study_suggests_medical_errors_now_third_leading_cause_of_death_in_the_us
9 https://www.rwjf.org/en/library/articles-and-news/2014/09/nearly-one-in-five-new-nurses-leave-first-job-within-a-year--acc.html
10 2016 Barclays US Healthcare Facilities Outlook Report
11https://www.ncsbn.org/Blegen_and_Spector_Newly_Licensed_RN_Retention_Hospital_and_Nurse_Characteristics.pdf
12 https://www.diederichhealthcare.com/the-standard/2017-medical-malpractice-payout-analysis/
13 http://money.cnn.com/2018/04/30/news/economy/nursing-school-rejections/index.html
14 https://www.theatlantic.com/health/archive/2016/02/nursing-shortage/459741/
15 https://www.incrediblehq.com/employers_howitworks.html
16 https://www.emergingrnleader.com/wp-content/uploads/2017/09/NationalHealthcareRNRetentionReport2017.pdf
17 https://www.beckershospitalreview.com/human-capital-and-risk/infographic-what-s-the-cost-of-nurse-turnover.html
18 https://www.advisory.com/daily-briefing/2017/09/14/millennial-nursing
19 https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3608421/
20 https://www.census.gov/newsroom/press-releases/2018/cb18-41-population-projections.html
21 https://www.ncoa.org/news/resources-for-reporters/get-the-facts/healthy-aging-facts/