Health Care Trends: Staffing Issues Critical
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(First in an occasional series on Long Term Care staffing concerns)

The national economy has been robust. Over the past decade, we've seen explosive changes in the nation's healthcare system. Both of these factors have dramatically impacted how the Long Term Care industry manages staffing. We are at a critical crossroads - and it is projected to get harder long before it gets any easier.

Care giving personnel are at the heart of Long Term Care. They are the conduit through which elder care moves from concept to reality. However, numerous economic factors have had a direct impact on the ability to recruit and retain both entry-level and professional nursing personnel. Certified Nursing Assistants and Nursing Assistant recruits now more than ever have opportunities offering better compensation, less stressful and difficult work regimens and better upgrading potential. Within this broad industry, there is competition through specialty providers, who can operate successfully under lesser-regulated or higher margin systems, and staffing agencies, where higher wages are offered in lieu of stable employment. Outside of this specific industry sector, employers can offer more when not constrained by the reimbursement realities faced under the new LTC reimbursement system, PPS. Either way, opportunities abound for LTC personnel to chose other options. In each and every case they lose a valued employee, they lose a portion of our the most valuable piece of their business - the people who care for customers. No challenge they face more directly threatens their ability to deliver on the promise of quality care.

What are the statistics? Nationally, the unemployment rate is below 5%. In Pennsylvania, typical of the Mid Atlantic and Northeast parts of the country, the rate has fallen to 4.5%, the lowest it has been since the 1960's. County unemployment rates, in certain counties we operate in New Hampshire, Massachusetts, Pennsylvania, New Jersey, Maryland and Florida range from 2.5% to 3%. Allowing for frictional unemployment and other factors, these numbers document full employment - a saturated workforce with more jobs in demand than available workers.

Professional staff, RN's and LPN's, have become scarce as a combination of the same economic realities, coupled with the rapid expansion for specialty roles for nurses, the rising acuity in hospitals, ambulatory surgery and home care and the industry-wide reengineering paradigm.

The following table projects the growing gap for BSN's alone:

The 7th Report to Congress: Status of Health Care Personnel in the U.S. projected a dramatic shift in the availability and need for nursing personnel between 1990 and 2020. The greatest need will be in baccalaureate prepared RN's. According to the report, more than 1 million BSN nurses will be needed, but less than 600,000 will be available. That's a little more than half!

An article published in July, 1997 by the National Association for Health Care Recruitment, warned us:

"Prepare yourself for a nursing shortage the likes of which you never experienced. Unlike the 1980's when there was a quantitative deficit in the availability of nurses, we now face a nursing shortage defined not only be quantity but by quality as well. This nursing shortage, this time around, therefore not only challenges recruiters to compete for scarce resources, but also challenges the RN's to gain the skills and knowledge to enter the marketplace of the next century."

Where have all the nurses gone? Some are in pharmaceutical research, others are in sales, and many have taken non-nursing jobs that offer weekends free and relative job stability. These nurses have left the profession and aren't coming back; they are the visible results of downsizing and reengineering.

We also face a nursing shortage because fewer and fewer replacements are entering the pipeline each year. Admissions are down at nursing schools as traditional nursing no longer presents itself as a viable career choice. Many schools have closed.

As we move deeper into this national dilemma, recruitment techniques which have worked in the past are proving not to be as effective. Remember, the nursing shortage of the 21st Century isn't just about quantity, it's also about quality. If we assume that quality divided by cost equals value (Q/C=V), then at a given cost unit per nurse, as quality increases, so does the value of the services that they provide. Therefore, the quality investment we make in our current nursing workforce enhances our ability to compete effectively in the market driven health care system. The solution isn't to just compete for resources, the solution is primarily to cultivate new talent. But we can't do that if we can't hang on to our own people, especially if the people we lose are among our best employees.

In turn, an increase in cost decreases value. Remember the hidden cost of turnover. Various estimates place the cost of recruitment of a CNA at between $1,000 and $2,000; training an NA from an entry-level recruitment pool at between $2,500-$6,000 (depending on the level of support services required); and the cost to recruit a replacement RN or LPN at between $3,000 and $4,000, when and where you can find them.

Now is the time for all of us in management to "step up to the plate" and think creatively to deal with this changing marketplace. We know we have both quantitative and qualitative nursing issues to face in staffing. We have financial issues. But the message is to "retrain and retain" the staff we have...and we aren't going to find replacements easily, at any cost.

Michael D. Van Stine

(Michael is President and CEO of WorkForce21, a consulting and advocacy organization for workforce issues.)