Rae Woods (00:14):
From Advisory Board, we're bringing you a radio advisory, your weekly download on how to untangle healthcare's most pressing challenges. My name is Rachel Woods. You can call me Rae. It feels like just yesterday that workforce challenges were the biggest challenge facing the healthcare industry. And I know, I know many of the pandemic related anxieties around staffing have gotten better, but that doesn't mean we're completely out of the woods.

(00:40):
In fact, I'm a little worried that we've become numb to the rate of burnout, of moral injury, of workplace violence, looming retirements, the growing gap between staff experience and the complexity of patients and so much more. In an era where margins are razor-thin and frankly, the workforce is often the biggest line item, health systems are looking for opportunities to right size or to defend their headcount, and that's why so many are turning to numbers. They're using staffing ratios or using benchmarks as the standard to decide whether or not they need more cuts or more hires, but that doesn't actually tell the whole story. If we're going to address the root cause, challenges in the workforce, we have to take a more holistic view, and that's why in this week's episode, I've invited Advisory Board nursing expert Ali Knight to break down the state of the workforce five years after the COVID-19 pandemic. And later I've invited Optum Advisory workforce management experts, Sherilynn Quist and Anne Schmidt to talk about their work in addressing the blocking and tackling of workforce challenges within hospitals. Ali, welcome back to Radio Advisory.

Ali Knight (01:51):
Hey Rae, thanks for having me.

Rae Woods (01:56):
I want to say from the start, thank you for being a nurse. You play a very important role in this conversation because you've actually lived many of the challenges that we're going to be talking about.

Ali Knight (02:05):
I have, yes.

Rae Woods (02:07):
And it wasn't too long ago that nursing actually represented one of the biggest, in fact, the biggest up at night challenge in healthcare. We were talking about nursing shortages, we were talking about the cost of contract labor. Suddenly nursing became a C-suite level issue. My question for you is where are we today, five years after the onset of the pandemic?

Ali Knight (02:33):
So first I have to say, I can't believe we are five years after the start of the pandemic. Somebody referred to it as a half a decade later, and that was just shocking to me. But from the peak of COVID, and within the last five years, things are starting to look a little bit better. There's some glimmers of hope from a pure number's perspective. We're seeing turnover and vacancy rates continue to fall from their peak a couple of years ago. But the reality is they're still above the pre-pandemic levels. And when we look at turnover, specifically at the bedside, nurses, CNAs, the support roles, that's where we're continuing to still see the highest rates of turnover. So the bedside, while improved, still remains a major priority for health systems.

Rae Woods (03:18):
It sounds like the supply problem has mostly gotten better. I want to ask you though about the dollars. We know that labor is a huge, huge cost. It takes a lot of money to have the workforce in place and to manage things like turnover and vacancies. So if I'm just thinking about the financial picture, where do we stand today?

Ali Knight (03:39):
So we're seeing agency spend decrease, which is providing some relief on labor pressures or labor costs. But overall, there's still a lot of pressure on the margin, pressure on that bottom line. And when there's pressure on the bottom line, there's pressure on labor cost. So we will see that continue.

Rae Woods (03:56):
I want to say from the outset here, that there was a tendency to want to forget COVID-19 and all of the pressures and problems of the pandemic. So if you're listening to this episode, please do not use that as an excuse to stop and turn this off, because what you're hearing from Ali is that while yes, supply is getting better, turnover is getting better, maybe reliance on agency labor is getting better, that doesn't mean we've solved all of the workforce challenges that hit a peak during the COVID era. And I'm recognizing that there are some competing pressures here. On the one hand, there is of course, downward pressure to reduce labor costs. Right. Margins is being squeezed, and there's always going to be pressure on labor costs. But I have to believe there's also pressure in the other direction where the workforce itself and workforce leaders are trying to maintain the right staff and the right experience level so that they're protecting their nurses and protecting their workforce. And to me, these two things are clashing. How are health systems addressing that?

Ali Knight (04:58):
Yeah, so you're right, Rae, there is, clash is probably a stronger word than I would use, but I would say there's a delicate balance right now between the financial pressures and the experience and supply of the nursing workforce. So we are still continuing to hear concerns from many organizations about staffing and staffing levels. And it's not just the pure numbers that they're concerned about. It is that we have instability yet in the support roles, which drives nursing satisfaction and really enables them to complete their work for patient care. We're also seeing an experience gap with our nurses in that many of the nurses that left the workforce within the last few years were the experienced nurses who have chosen early retirement or pursued different roles. And so we have a younger, less experienced workforce than what we have historically had.

Rae Woods (05:56):
And this is why we can't just talk about supply period. We have to take a more holistic, more expanded view when we look at the workforce. And what makes me worried, Ali, is that when I talk to executives who frankly don't oversee, say the nursing workforce, and they're really just focused on that bottom line, oftentimes they run to numbers alone to just ask, do we have the right number of people in place? And I think what you're going to tell me is that benchmarking alone isn't going to solve all of our workforce problems.

Ali Knight (06:28):
Yes, benchmarking is one piece of a bigger picture. So when we think about benchmarks, broadly speaking, they're targets, it's an assessment of how the industry is performing on X, Y, and Z measures.

Rae Woods (06:42):
And it's you need this many nurses for this many patients.

Ali Knight (06:45):
It can be this many nurses for this many patients, it could be turnover, it can be vacancy, it could be number of hours per patient day. There's a variety of ways that healthcare looks at benchmarks specifically.

Rae Woods (06:59):
I often take the skeptic role on this podcast, and I have to imagine that one of the reasons why benchmarks aren't showing the whole picture is that they're just one tool in the tool belt. And I'm imagining they can be used to justify either of those pressures that I mentioned, meaning the C-suite, or maybe the finance team is using benchmarks to say, actually we're overstaffed. I am going to use that number to defend cuts. I can also imagine that nursing leaders listening to this episode could use benchmarks in the opposite direction, right? No, no, no. We can't go below benchmark because I need to make sure that I have the right staff for safety reasons. They're not the most effective tool for either end to either right size or protect the workforce. We actually have to look at the root cause challenges.

Ali Knight (07:47):
That's correct, Rae. Benchmarks need to be looked at in combination with things like availability of support, staff, experience of your nurses, the complexity of your patients, sometimes even the layout of your organization or your unit. So benchmarks will give you a starting point, they give you a direction, but they're not going to give you a final answer or a final target.

Rae Woods (08:14):
I want to argue with myself a little bit here and make sure that I'm being careful. I actually want to understand how these benchmarks are set, who they're set by, and what value that they're bringing when we talk about shoring up the workforce.

Ali Knight (08:28):
So benchmarks are set in a variety of different ways, and the data points come from all sorts of different sources. What they provide us is a really good snapshot into what's happening across the industry. So they become an amazing comparative tool for us to see how as an organization we're operating in comparison to others across the industry. What's so hard is that there's not a single standard of a benchmark across the industry.

Rae Woods (08:59):
And I think I'm actually conflating benchmarks and staffing ratios. Help me understand the difference between those two.

Ali Knight (09:07):
So benchmarks are a broad term that really can apply to a variety of different aspects of staffing. It could be turnover, it could be vacancy, it could be hours per patient day, it could be hours per unit of service. Your ratios are specifically the number of nurses or the number of patients one nurse can care for. So it's a very specific nurse to patient ratio or CNA to patient ratio, caregiver to patient versus benchmarking, which is generally a broader category.

Rae Woods (09:41):
I got it. And I'm thinking about what I hear in the news or read in the headlines right now. And what I'm actually hearing, I think is more about staffing ratio. So a union that is setting a new, or advocating for a new staffing ratios, or maybe we see states or the federal government trying to pass certain laws to mandate and protect a patient to staff ratio. Whereas what you're talking about is all the ways that we can look at data that's impacting the workforce as a whole.

Ali Knight (10:07):
That is correct, Rae.

Rae Woods (10:09):
Ali, you've done such a good job setting the stage for where the workforce is. And what I'm hearing from you is two things. First, we can't just assume that we've gotten past the worst problems from the pandemic. We need to continue to focus on supporting the workforce while recognizing that margins are razor-thin and we can only support the workforce and support our margin if we're using every tool in our toolbox and not just focusing narrowly on something like staffing ratios, which is why I want to bring in experts that are actually working on the ground at the hip with health systems and providers to make their workforce as efficient as possible. So to do that, I'm inviting Optum Advisory workforce management experts, Sherilynn Quist, and Anne Schmidt. Hey, Sherilynn. Hey, Anne.

Anne Schmidt (10:55):
Hi, Rae.

Sherilynn Quist (10:56):
Hey, Rae.

Rae Woods (10:58):
Anne, I should say that you are also a nurse and have switched gears, and now you're an expert trying to help nurses and help workforce leaders more broadly. Tell me more about what you do.

Anne Schmidt (11:10):
That's correct, Rae. I'm a director for Optum Advisory. I lead care variation reduction, and I also support the workforce work stream. By background, I'm a nurse, nurse practitioner, have over 30 years in the industry and spent a decade in the C-suite.

Sherilynn Quist (11:26):
And I'm Sherilynn. My background is in workforce management. I have spent 25 years in hospital operations with over 15 of those years focusing on workforce management and consulting.

Rae Woods (11:41):
And I want to talk about some of the problems that you're seeing pop up within hospitals and health systems as they've tried to address these workforce and margin challenges. Who is actually the one who's picking up their phone and calling you, and what problem are they actually trying to solve?

Sherilynn Quist (11:59):
Generally, it is the CFO that will pick up the phone and give us a call. And it's typically because of margin troubles, right? Some folks come in with a skewed perception of their situation. They may think their hospital is unique or different from other hospitals around the country. And these executives really want an understanding of how they're operating. Can they do better? Where are the challenges that they need to focus on?

Rae Woods (12:32):
So what I'm hearing you say is that you're not necessarily getting an explicit phone call saying, "Hey, Sherilynn, I need to save some money. Please help me fire some staff."

Sherilynn Quist (12:43):
Not necessarily, Rae.

Anne Schmidt (12:44):
If you look at the workforce, they're grappling with issues like high turnover, inefficiencies in care delivery, or difficulty in aligning workforce strategies with financial goals. So when we talk with the CEOs, CFOs, CNOs, the C-suite in general, their aim is to really identify sustainable solutions that enhance workforce engagement and performance that ultimately support organizational financial health.

Rae Woods (13:20):
Let's switch gears to a different perspective. What do the people on the ground, let's say nurses, what's their first thought when you and Sherilynn are rolling up at their doors? Do they have a sense of that kind of holistic vision and view of the problem you're trying to bring in?

Anne Schmidt (13:36):
Not necessarily. No. I think there's a lot of anxiety. They might worry that we're coming in and there's going to be major disruption or we're going to implement changes without fully understanding the situation. But that's really not the case. Our approach is centered on collaboration, and we want to develop tailored solutions so that that can reflect the organization's unique challenges and strengths.

Rae Woods (14:03):
And I think it's important to recognize that while there might be this anxiety, to use your words from boots on the ground, frontline nurses and clinical staff, a lot of the workforce leaders, in particular nursing leaders, they're feeling the same squeeze and pressures that the CFO or the CEO have identified when they call you. They want to make the most of their workforce while managing their margin. And it sounds like you're in the position of actually trying to make everyone happy. How do you actually approach identifying and then ultimately managing the change that you're going to enforce at an organization, especially when these anxieties are high?

Sherilynn Quist (14:42):
Wonderful question, which is exactly why Anne and I work together on this. So we bring both the financial and the clinical perspective to the table. We're there for a purpose, and that's to see if the organization has the right people in the right place at the right time, right? We understand the unique role that clinicians have and always, always bring that perspective of the clinical team.

Rae Woods (15:12):
I have to imagine that trust is really, really important to establish here to avoid the idea that, hey, we're bringing in some consultants. Somebody is going to get fired. What are you actually doing when you come on site to identify the biggest areas of opportunity?

Sherilynn Quist (15:28):
Well, we talked about benchmarking before, which I know Ali had a lot, we had a lot of thoughts on. But from our perspective, benchmarking is the place to start, right? It's the only thing that we have to really understand what are other hospitals doing out there in the industry? So we do start with benchmarking.

Rae Woods (15:49):
And what kind of data are you looking for when you're starting with benchmarks to assess an organization's performance?

Sherilynn Quist (15:55):
We typically look at hours per unit of service. What we're trying to do in our work is align staffing with the volumes. And as we continue to look at the labor expense side of things, we're looking at are you staffed appropriately according to the volumes that you have?

Rae Woods (16:19):
And it sounds like you're taking a much more nuanced view of the data that we have.

Sherilynn Quist (16:24):
Absolutely. And again, it's just a baseline, right? It gives us an idea of where might we have opportunity? And then we take that opportunity and we dig a little bit deeper into that to understand what do those staffing ratios look like? What is the clinical makeup of the department?

Anne Schmidt (16:45):
And then we really start to sprinkle in the listening tour. And if we are engaged to go onsite, we'll prioritize gathering those perspectives across the organization. We have interviews with leaders, with frontline teams, other key stakeholders, understanding their pinch points, their challenges, and we go to the Gemba. We make real time observations of workflows. We shadow team members, we immerse ourselves in the day in the life experience of the staff. And this hands-on approach really helps us to gain invaluable insights into the processes and opportunities for the improvements where they might exist.

Rae Woods (17:28):
Yes. And let's talk about what those are. I love this approach to data and, right, data and the listening tour, data and the observations that you're doing. So outside of headcount, what are some of the root cause challenges that you identify? What are some of the elements that could have the biggest impact on workforce efficiency?

Anne Schmidt (17:48):
I think when we're on site, we're number one looking at the physical layout and the workflow design. So any efficient physical layouts can hinder the workflow significantly. So for instance, in one hospital we identified like the critical supplies that nurses need for high acuity units was at the opposite end of the floor. That's waste, that takes time with the back and forth. So we really reorganized some of the supply storage to allow nursing staff to spend more time with patients. If you look at technology utilization, sometimes existing technology is underutilized or it's misaligned with workflows. So it's really retraining the staff on EHR's capability, aligning more effectiveness with workflow. I could go on and on, but those are some of the examples that can help improve some of those workflow processes that allow for efficiencies, and then allow for some of those translation of the workforce being adjusted once those efficiencies are implemented and hardwired.

Rae Woods (20:37):
I have to admit, I'm a bit surprised that in a conversation about the workforce, you jump to physical design of a space. I kind of expected you to talk about technology, but I definitely wasn't expecting you to talk about physical design. What are some of the other root cause problems that you're identifying that others perhaps like me wouldn't think of when they're thinking about the workforce?

Anne Schmidt (20:58):
So two things come to mind. I think of patient flow and throughput. So bottlenecks and patient flow, discharging patients, those can create inefficiencies in the system. So for instance, in one hospital, we discovered that discharge planning wasn't initiated early enough during a patient's stay. So by discharge planning protocol that began on admission, we reduced the length of stay, we improved bed availability, and therefore we had the increased capacity to move throughput through. And we didn't need the additional nurses. But to your point, staff experience and skill mix matter, don't get me wrong. Certainly when you think about the experience nurse deficit that we have, the fact that new nurses are leaving the bedside, there is an increased propensity for the newer nurses on these busy units to be slowed down, and that can increase your error rate. So really looking at those mentorship models, pairing novice nurses with more experienced nurses, that can really improve efficiency in patient outcomes.

Rae Woods (22:08):
You're talking about best practices for managing a best in class workforce, period, which is not merely about having a right sized workforce. And I have to imagine back to your comment about the balance of the two of you, the financial and the clinical. And so far, the opportunities that you've named are ones that I'm betting nurses are actually pretty happy about. They want better clinical workflows, they want better technology to actually work with them and not against them. They don't want to have to take the 10 or 50 extra steps to get the drug or the device that they're constantly using. So let me ask you about a harder challenge. It is probably not easy when you go on site and you ultimately do find that a unit is overstaffed. So how do you approach some of those harder challenges that you'll ultimately identify, like needing to rightsize the workforce?

Sherilynn Quist (22:56):
Rae, it's interesting, it's not just about overstaffed, right, it's about the expense management altogether. So when we walk in on a unit, we want to understand not only the staffing ratios, but how much agency are they using, how much overtime are they using so that you get the picture, the overall picture of the unit itself in trying to understand how to manage those expenses down.

Rae Woods (23:30):
Wow, this is really interesting because you're saying, okay, I might be getting a call from the CEO or the CFO that says, I need help with my margin. And the first thing you're doing is saying, all right, let's make your existing workforce as efficient as possible with the physical layout, the workflow, and so on and so forth. But you're also saying that managing labor expenses is not merely bringing a number down.

Sherilynn Quist (23:56):
No, not necessarily. I will say one of the biggest issues that we find also is that your units, whether it be nursing or your procedural units, aren't taking a look at their staffing on a regular basis. So when we go in, we'll bring the tools that will help nurses, will help other procedural units take a look at staffing every four hours, tools like that, that help them understand what do my volumes look like? What does my staff look like? Am I managing this appropriately throughout the day? And it all backs up into how you schedule those resources as well. So there are tiny pieces of the puzzle all along the way that go into managing that staff. And people have to understand that all of those pieces work together.

Rae Woods (24:55):
And importantly, you're saying that managing workforce expenses does not have to come at the expense of staff, at least not if you're executing well.

Sherilynn Quist (25:04):
Right, exactly.

Rae Woods (25:05):
Does the C-suite understand that, or back to this balance of trust, do you also have to do some, frankly, education with the executive team in the same way that you would do for the frontline nurses and say, no, I am not here to just come in and be the big bad wolf and defend cuts?

Sherilynn Quist (25:23):
Oh, absolutely. We have to do education. And again, this is why we pull our clinical and financial teams together. I'll give you an example. We were working with a hospital in the Midwest and went through our exercise looking at benchmarking. And typically I will say the C-suite looks at nursing is going to be my biggest opportunity, right? Because that's where a lot of your dollars are. That's where your your highest paid assets are within the organization. In this particular organization, they were running well above the benchmark standards. The CNO was on her game, and we really had to have a discussion with the CFO, the CEO to help them understand that these units were running efficiently. So yes, there's education all around.

Rae Woods (26:21):
Have you ever had to go even a step further and say, I'm sorry, you're actually understaffed or under resources and you're there to tell the executive team that they need to actually spend more money?

Sherilynn Quist (26:32):
Yes. I mean, I think the interesting thing is we look at all of these units as a whole. Right. So typically when we're in a unit that we think may have less than, you're going to reallocate your staff. We were just working with a hospital in the Northeast that in their ED, we noticed some of their volume patterns. They weren't as effective as they could be because they didn't have the appropriate staff at the right time of the day. However, on their med surg unit, they had an abundant amount of staff. So reallocating some of those resources to meet the needs of the ED was where we went with that organization.

Rae Woods (27:19):
And this is why it is so important to take that holistic view that includes benchmarks, it includes the listening tour, it includes looking at multiple units at the same time, because that's how you're going to get a holistic view of an organization. And from your perspective, you're able to deliver quote, unquote bad news like you're under resourced in a way that minimizes the impact or changes for the organization that you're supporting.

Sherilynn Quist (27:45):
Correct. That's what we're going for.

Rae Woods (27:48):
I'm mindful of the fact that you Sherilynn and you Anne, represent two sides of a coin when it comes to trying to offer support for a very, very difficult problem. We've actually been talking about workforce issues long before the pandemic, and there are certainly no easy solutions, but expanding our aperture and looking at expense, and looking at efficiency, and all of this stuff can help us actually address some of the root causes that have existed for years. I want to give you a moment to speak directly to the health leaders who listen to Radio Advisory. What steps do you want them to take today to help them have as efficient of a workforce as possible while not just focusing on right sizing?

Sherilynn Quist (28:29):
Absolutely. Rae, I think the biggest thing that I would say is ensuring that labor management is part of the culture of the organization. I've been doing this for 20 years, and I keep coming back to executives letting them know the blocking and tackling of labor management is super important. So you've got to ensure that your managers have the right tools, that you're supporting them, that they have got the correct statistics. So ensuring that you've got a robust labor management program in addition to helping them understand how they get to these targets is where you need to go.

Anne Schmidt (29:19):
What I'd like to say first is that health system leaders really have a responsibility not only to make tough decisions about their workforce, but also to clearly articulate the why behind those decisions. It's really critical that leaders can explain how proper resource allocation and optimize workflows directly contribute to financial stability. And then there's three points I'd like to make. One is, first, change the narrative around the benchmarks. Benchmarks are guides, but they don't define the whole story. Second, recognize that the headcount isn't the only factor impacting success. You've got to look at those inefficient workflows, communication gaps, underutilized technology. Those are the solutions that will unlock your ability to add or reduce the staff. And then finally, at Optum, we want you to know that you don't have to face these challenges alone. We're here to help organizations identify their unique pain points and build those tailored solutions. This journey is not easy, but it's definitely worth taking.

Rae Woods (30:41):
Well, Anne, Sherilynn, thanks so much for coming on Radio Advisory.

Sherilynn Quist (30:46):
Thanks, Rae.

Anne Schmidt (30:46):
Thank you.

Rae Woods (30:52):
The biggest thing I learned from this episode is that data and benchmarks are an important part of the answer, but they're not the entire answer. Organizations need to take a more holistic view. Frankly they need to look beyond just labor to really understand how to build the right efficiencies in their workforce. And that takes a lot of trust from all sides. And remember, as always, we're here to help.

(31:44):
New episodes drop every Tuesday. If you like Radio Advisory, please share it with your networks, subscribe wherever you get your podcasts and leave a rating and a review. Radio Advisory is a production of Advisory Board. This episode was produced by me, Rae Woods, as well as Abby Burns, Chloe Bakst, and Atticus Raasch. It was edited by Katy Anderson with technical support provided by Dan Tayag, Chris Phelps, and Joe Shrum. Additional support was provided by Leanne Elston, Erin Collins, and Monica Westhead. We'll see you next week.