Bounties and bonuses leave small hospitals behind in staffing wars

Already strained by the COVID-19 pandemic, hospitals across the country are desperate to staff their facilities as the highly transmissible variant of omicron spreads.

This article was published on Monday, February 7, 2022 in Kaiser Health News.

By Bram Sable Smith

A recent lawsuit by a Wisconsin health system that temporarily barred seven workers from starting new jobs at another health system has raised eyebrows, including those of Brock Slabach, director of operations for the National Rural Health Association.

“To me, that signifies the desperation that hospital leaders face trying to staff their hospitals,” Slabach said.

His concern is for small facilities that do not have the resources to be competitive.

Already strained by the COVID-19 pandemic, hospitals across the country are desperate to staff their facilities as the highly transmissible variant of omicron spreads. Governors of states such as Massachusetts and Wisconsin have deployed the National Guard to help hospitals fight the outbreak. Six Cleveland hospitals ran a full-page ad in the Sunday Plain Dealer with a singular appeal to the community, “Help.” CoxHealth is part of Missouri’s medical systems to ask its office staff to help on the front lines.

With no end to the crisis in sight, hospitals began to attract workers from other facilities to meet the needs. In South Dakota, Monument Health offered signing bonuses of up to $40,000 to experienced nurses who would commit to the health care system for two years. Job offers for nurses in Maine and Virginia include signing bonuses of $20,000. Montana is offering healthcare workers up to $12,500 in moving expenses to relocate within the state.

The squeeze in the labor market is not just affecting health care. People are being lured into teaching and military jobs with $20,000 signing bonuses, while construction and trucking companies are looking for workers everywhere, even among the ranks of their competitors.

But in the life-or-death realm of medical care, those kinds of bounties turned an already stressful situation into one that Slabach called “almost combustible.” Smaller facilities — especially rural ones that have struggled for years to stay afloat — find it difficult, if not impossible, to compete for healthcare workers in this job market. If a hospital is unable to maintain safe staffing levels, it could be forced to reduce services or possibly close, a devastating blow to patients and the economies of those communities. Nineteen rural hospitals closed in 2020 alone.

In Pilot Knob, Missouri, Iron County Medical Center CEO Joshua Gilmore said staffing costs at his 15-bed rural hospital jumped 15% to 20% during the pandemic after granting raises at all levels to nurses and nursing assistants. It is also offering $10,000 signing bonuses to fill three nursing positions.

Those are big expenses for such a small facility, especially during a pandemic when spending on supplies like masks and other personal protective equipment has also increased. The hospital received just under $5 million in federal COVID relief, without which it likely would have closed, Gilmore said.

Gilmore said he lost nurses to traveling nursing jobs that could pay $10,000 a week. The typical salary for a nurse at the Gilmore facility is about $70,000 a year, he said. The hospital’s personnel costs could have increased even more if it had hired more traveling nurses. Not only are their pay rates too expensive, he said, but his hospital lacks an intensive care unit — the area most often manned by temporary nurses.

Two hundred miles west in Springfield, Missouri, CoxHealth has invested in training and retaining healthcare workers for years, according to Andy Hedgpeth, its vice president of human resources. These efforts included increasing class sizes at the affiliated nursing school from 250 to 400 students per year. Still, the health care system spent $25.5 million last year to give raises to 6,500 employees in a bid to retain workers.

“What we’re seeing right now is the amplification of a critical shortage across the country,” Hedgpeth said. “The solution is to develop the workforce and show individuals that they can have stable careers in their community.”

When hospitals spend money to hire travel nurses, it often ruffles the feathers of staff nurses, many of whom are already fighting for better working conditions. Hospitals are also losing workers to the very agencies they depend on for help.

In La Crosse, Wis., travel nursing agency Dedicated Nursing Associates placed a billboard near a Gundersen Health System facility advertising the agency’s pay: $91 per hour for registered nurses, $69 for licensed practical nurses and $41 for certified practical nurses. Neither Gundersen nor Dedicated Nursing Associates responded to requests for comment.

Shane Johnson got into nursing after being laid off from MU Healthcare in Columbia, Missouri, as part of the pandemic cutbacks in May 2020. He said it was hard to see himself returning to staff at a hospital given the better salary and flexibility that the temporary assignments allow him. A six-week contract in Chicago allowed him to earn as much in two days as he would have earned in two weeks at his previous job. A 15-week contract in Louisville, Kentucky allowed him to be closer to his family. His current job with recruitment platform CareRev allows him to choose his assignments on a shift basis while continuing to receive health insurance and pension benefits.

“The question all these nurses are asking is, if they can afford these crisis salaries right now, why can’t they pay us more to do the work we were doing?” says Johnson.

The travel nursing industry has caught the attention of lawmakers. Some states are considering legislation that would cap the pay of traveling nurses. At the federal level, more than 200 members of Congress have asked the White House’s coronavirus response team coordinator to investigate possible “anti-competitive activity.”

Even in such a competitive hiring environment, Wisconsin’s lawsuit filed Jan. 20 is a new frontier in staffing battles. ThedaCare, a regional health system in Wisconsin’s Fox Valley, has filed a temporary injunction to try to stop three of its nurses and four of its technicians – all employees at will – from leaving and joining competitor Ascension Wisconsin until so that ThedaCare can find replacement workers. A judge temporarily barred these healthcare workers from starting their new jobs before ruling ThedaCare could not force the employees to stay.

Spat is just a small piece of “a much bigger problem,” according to Tim Size, executive director of the Rural Wisconsin Health Cooperative. Without intervention, he said, staffing shortages currently attributed to the pandemic could become the new normal.

For example, Size said, a 2021 report from the Wisconsin Council on Medical Education and Workforce predicts the state could be short of nearly 16,000 nurses by 2035. Even if the reality is only half as bad that the projection, Size said, of a shortage of 8,000 nurses in Wisconsin dwarfs the shortages currently being experienced by the pandemic.

“We need to make a much more substantial investment in our nursing schools,” Size said.

One missed opportunity, according to Slabach, was the National Healthcare Workforce Commission created in 2010 by the Affordable Care Act but never funded by Congress. The commission would have been tasked with measuring the scale of the challenges of the health workforce and proposing solutions, but it never met.

“We need to mobilize all the resources we have to figure out how we’re going to solve this problem, and that starts with a systems approach,” Slabach said. “We can’t just get away with bonuses and bonuses.”

In the shorter term, Gilmore said, smaller hospitals like his could use more federal support. The $5 million received by the Iron County Medical Center was essential, Gilmore said, but has already been spent. Now his facility is dealing with the omicron surge and is still reeling from the delta wave over the summer.

“I call my congressman and let him know we need help,” Gilmore said. “We can’t do this on our own.”

Bram Sable-Smith: [email protected], @besables

Kaiser Health News is a national health policy information service that is part of the nonpartisan Henry J. Kaiser Family Foundation.

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