Hospitals and their nurses are still feeling the shockwave effects from the height of the COVID pandemic, specifically the increased nurse turnover rate. In 2020 and 2021, many nurses retired or left the profession to pursue different careers, and the nation was left with an influx of COVID patients and a shortage of nurses. Other nurses left their home hospitals to travel, increasing an already persistent problem. Two years later, we’re still facing an extreme nursing shortage and hospitals are paying the price.
From 2019 to 2020 the percentage change in regional nurse turnover increased 2.8% bringing the total to 18.7%. Each percent change could cost the average hospital an additional $270,800 a year. Due to the pandemic, some hospitals lose $3.6m – $6.5 million a year in just turnover costs. These costs can significantly impact hospital margins and need to be dealt with appropriately to recover costs for the hospital.
When labor is in short supply, hospitals will authorize overtime and increase travel staff usage. Over the past few years, travel nursing has been especially lucrative due to the pandemic, some nursing packages reaching up to $10,000 a week. To offset the increased labor expenses, hospitals are looking to decrease their supplemental staffing when patient volume dies down. Hiring full-time nurses makes more financial sense for most hospitals, but current labor demand forces most hospitals into more costly approaches.
The Great Resignation
2021-2022 is being referred to as the Great Resignation, the American workforce quitting their jobs in search of more pay, appreciation, and flexibility, among other things. According to the American Medical Association, the healthcare industry should expect the high nurse turnover rate to stay for a while, citing not feeling valued, burnout, anxiety, and COVID-19–related anxiety/depression as reasons that medical staff are leaving the field. They found that 1 in 5 doctors and 2 in 5 nurses plan to leave their current position within two years. A group of hospital CEOs ranked their number one concern from 2021, and 94% of the surveyed CEOs said a deficit of registered nurses was their most pressing concern. This surpassed ‘financial challenges’ which has been the top concern for hospital CEOs since 2004.
The Great Resignation comes at a time when nurses have admitted to fighting burnout for several years now. Since the pandemic, nursing vacancies skyrocketed as many nurses left their hospitals to pursue travel positions motivated by demand, wage increases, and hopes to alleviate burnout. Travel nurses are incredibly valuable to hospitals, but unfortunately, temporary staffing is an unsustainable solution to a much bigger problem. It’s estimated that for every 20 travel nurses cut, a hospital could save $3,084,000. Hospitals end up paying more in hourly wages for travel nurses who are less familiar with the locality and other staff members, which can result in decreased patient satisfaction. Unfortunately, the lack of full time staff isn’t giving hospitals many options. Many are choosing to pay travel nurses, sometimes upwards of $4,000 per week, in order to meet their staff-to-patient ratios and provide quality care to their patients.
Amid the staffing crisis, hospitals are choosing to outsource in an attempt to counter their nurse turnover rate. Outsourcing is a good option for organizations that may be short on RNs, and need to increase their revenue or efficiency. In-house billing and coding can be expensive. A hypothetical, error-free internal billing staff of two is estimated to cost ~$90,000 per year. Depending on your area and staffing practices, this could easily be more.
Outsourcing with a quality revenue integrity partner reduces your risk of making costly errors. A recent study by the Medical Group Management Association found that switching from in-house billing and coding to outsourcing with a third party saw a 59% decrease in denied claims. When you outsource your billing and coding department, you’re hiring an experienced team that comes with years of clinical expertise, ample resources, and a perfected workflow. They are also continually trained on the ever-changing billing and coding regulations to keep your procedures up to date.
Outsourcing gives your health system the flexibility to redirect your staff to other areas of the organization to do what they do best.
How Advent Can Help
Advent Health Partners has 10+ years of clinical experience from registered nurses, credentialed coders, and business analysts. Additionally, our Revenue Integrity Consulting provides your team with analytics and data-driven strategies. Advent’s reviewers step into your existing workflow, ready to start immediately. Our team becomes an extension of yours, reducing administrative burden and increasing revenue.