Understanding the Challenges Hospitals are Facing

Understanding the Challenges Hospitals are Facing

By Lauren P. Trumbo, Chief Financial Officer, Methodist Hospitals.

Throughout the last two years, hospitals faced challenges similar to those faced by any other industry – supply chain strains and staffing shortages being the most critical. However, while other industries could allow bare shelves, limit quantities purchased, cut their services due to lack of staff, or provide no product at all, hospitals could not take these steps. Hospitals, beacons of hope for patients, families, and communities, had to remain open to provide care every second of every day, seven days a week, 52 weeks a year.

Everyone felt the supply chain strains as China halted manufacturing and California’s ports were unable to unload ships quickly enough due to self-inflicted regulatory issues. However, hospitals nationwide experienced an especially intense, day-in, day-out scramble: to maintain inventory counts, to keep a watchful eye on back-ordered items with no firm delivery dates, and to figure out how to deliver critical inventory to patient-care departments in the face of supply shortages. Health care workers were under unprecedented stress as they did their best to meet high patient expectations while working long hours away from their families wearing increased PPE (personal protection equipment) and short of normal supplies.

As the pandemic dragged on, chronic nursing shortages reached crisis levels as nurses experienced burnout, left the profession for other fields or retirement, or took more lucrative agency nurse assignments. The massive movement of nurses from hospital employment to contract work for nursing agencies at significantly increased wages has left hospitals in a desperate situation. Forced to pay four to five times more for the contract nurses needed to staff their inpatient units, hospitals today face unsustainable financial pressures.

How can hospitals continue to survive with these unprecedented challenges? Hospitals cannot simply raise prices, as other industries are free to do. Healthcare reimbursement is complex, and raising prices does not result in higher revenue because reimbursement comes from contract-negotiated payments from insurance companies, and from Medicare and Medicaid payments.

There are three ways that hospitals will survive: diversity in supply chain, better work-life balance for employees, and use of technology to relieve pandemic pain points. Since every industry is trying to figure out how to improve in these areas, hospitals that improve more quickly than their peers will fare better in the long run and will survive.

Supply chain diversity will be key to ensuring the hospitals can provide patient care supplies and avoid a repeat of the heightened stress levels of the last two years. The challenge will be to find manufacturers in the Western Hemisphere to reduce supply chain reliance on suppliers in Asia.

Work-life balance, whether it is self-scheduling for the hourly employee or work from home for non-clinical employees, will be critical. The “great resignation” has had significant impact on the health care industry. The pool of healthcare workers is shrinking. For hospitals to reverse this trend and remain the beacons of hope that they are, it will be imperative to embrace the new workplace concepts arising in this endemic world. Putting scheduling tools into employees’ hands shifts the power to the employee and will enhance employee engagement and retention. In the same way that healthcare has moved towards a value-based payment model for reimbursement over the past decade, salaried employees will need to be shifted towards a value-based work concept – pay for their value, not for the hours they sit behind a desk.

New and improved technology will continue to reduce the pandemic strains. This may or may not happen overnight, but it is coming. Technology such as robot blood draws will alleviate phlebotomist pandemic pain points, hospitals-at-home will keep non-intensive critical patients at home rather than in a hospital bed, remote patient monitoring will keep patients out of the emergency departments, and robotic wellness visits will reduce your physician clinic visits.

Through pandemic, endemic, and beyond, the hospital of the future will remain a beacon of hope for families and communities. When you need care, our hospitals will be waiting and ready, because we are home to America’s healthcare heroes.

Category Features, Health