The healthcare industry is facing a severe nursing shortage, and the impact of this crisis is being felt across the board. The shortage affects health systems in many ways, but one of the most significant impacts is operating budgets. As health systems struggle to maintain staffing levels, they rely on expensive agency contracts and travel nurses, contributing to budget instability. At the same time, labor costs continue to rise, making it challenging to maintain a balanced budget.
This article will explore the major expense areas contributing to budget instability and introduce ShiftMed as a workforce technology solution. By adopting innovative technologies like ShiftMed, health systems can achieve operating budget stability and provide high-quality patient care while reducing expenses.
The Leading Causes of Budget Instability
Travel Nurse Contracts
Travel nurse contracts are a common staffing solution for healthcare facilities facing staffing gaps due to nursing shortages. Travel nurses are licensed RNs who work temporarily for a specific period, usually 13 weeks or more, in different healthcare facilities nationwide. These contracts are inflexible, expensive, and can cost up to 50% more than the salary of a staff nurse.
The high cost of travel nurse contracts can significantly impact healthcare facilities' operating budgets. The expenses associated with travel nursing include hourly wages, overtime, housing, travel, and licensing fees, which can quickly add up. These expenses make it challenging for facilities to maintain a balanced budget, and the reliance on travel nurses can create an ongoing cycle of financial instability.
To achieve operating budget stability, healthcare facilities must explore alternative cost-effective staffing solutions that provide high-quality patient care. One such solution is adopting innovative workforce technology like ShiftMed. By eliminating the reliance on travel nurse contracts and agencies, ShiftMed can help healthcare facilities reduce staffing costs while improving the quality of care for patients.
Staffing Agency Fees
Staffing agencies are another common staffing solution for healthcare facilities facing gaps. Staffing agencies provide temporary staffing solutions, allowing facilities to fill staffing gaps quickly. However, these agencies have high fees that can significantly impact operating budgets. Staffing agencies charge fees for their services, ranging from 25-100% of the hourly wage of the temporary staff. This means the hourly rate paid to temporary staff is higher than that paid to full-time staff.
The high cost of agency fees makes it challenging for healthcare facilities to maintain a balanced budget, and the reliance on agencies can create ongoing budget instability. Furthermore, staffing agencies often have limited access to a pool of available and qualified candidates. This can result in healthcare facilities settling for less qualified candidates, negatively impacting patient outcomes.
To achieve operating budget stability, healthcare facilities must explore innovative staffing solutions that can help reduce staffing agency fees and provide high-quality patient care. ShiftMed provides a cost-effective and reliable alternative to staffing agencies, eliminating the high fees associated with staffing agencies and delivering qualified nurses to facilities. By leveraging innovative workforce technology like ShiftMed, healthcare facilities can reduce staffing costs and improve the quality of care for patients.
Lack of Visibility into Labor Costs
One of the leading causes of budget instability in healthcare is a lack of visibility. Without a clear understanding of labor costs, healthcare facilities cannot effectively manage staffing levels, accurately budget for labor costs, or identify areas where cost savings can be made. There are several potential reasons for the lack of visibility into labor costs in healthcare.
First, many healthcare facilities rely on outdated manual processes for tracking labor costs, making it challenging to obtain real-time data on labor costs. Second, healthcare facilities often have multiple staffing sources, making it difficult to consolidate data from various sources to obtain an accurate picture of labor costs.
Without a clear understanding of labor costs, healthcare facilities may be overstaffed or understaffed, leading to inefficient use of resources and increased labor costs. Inaccurate labor cost estimates can also make it difficult to identify areas where cost savings can be made, leading to ongoing budget instability.
To achieve operating budget stability, healthcare facilities must invest in technology that provides real-time visibility into labor costs. With ShiftMed's Internal Resource Management technology, healthcare facilities can centralize staff data, obtain real-time data on labor costs, and make data-driven staffing decisions. This can lead to cost containment, increased efficiency, and operating budget stability.
Retention
Retention is a significant challenge for healthcare facilities, and employee turnover can significantly impact operating budgets. Employee turnover is costly and can result in increased staffing costs, decreased productivity, and decreased patient satisfaction.
The impact of retention on operating budgets can be significant. The cost of replacing an employee can range from 50% to 200% of their salary. These costs include recruitment, training, lost productivity, and increased staffing costs during the transition period. Additionally, high employee turnover can lead to staffing gaps, often requiring expensive staffing solutions such as travel nurses or staffing agencies, contributing to budget instability.
Improving retention rates in healthcare requires a multifaceted approach that addresses factors contributing to turnover, such as job stress, inadequate staffing levels, and lack of support. Some strategies for improving retention rates include providing opportunities for professional development, offering competitive salaries and benefits, improving working conditions, and offering flexible scheduling options.
Furthermore, innovative workforce technology like ShiftMed can help healthcare facilities improve retention rates by providing access to a pool of qualified, credentialed nurses and reducing the need for travel nurses and staffing agencies. ShiftMed can help healthcare facilities reduce turnover, improve retention rates, and achieve operating budget stability by providing a reliable and cost-effective staffing solution.
Overtime Expenses
Overtime expenses can have a significant impact on operating budgets in healthcare. Overtime occurs when staffers work beyond their scheduled hours, resulting in higher hourly wages, increased labor costs, and decreased productivity.
There are several potential reasons for overtime expenses in healthcare. One of the primary reasons is understaffing due to nursing shortage. When facilities are understaffed, employees may be required to work overtime to meet patient care needs. Poor scheduling practices, such as inefficient use of resources, can also contribute to overtime expenses.
To reduce overtime expenses, facilities need to address the root causes. One strategy is to invest in innovative workforce technology, like ShiftMed, which can help facilities maintain appropriate staffing levels, eliminate staffing gaps, and reduce overtime. Additionally, improving scheduling practices, such as flexible scheduling options, can reduce overtime expenses.
Revolutionizing Healthcare Staffing: The ShiftMed Advantage
ShiftMed is a workforce technology solution that offers innovative tools and solutions for healthcare staffing challenges. By providing access to a pool of over 350,000 credentialed RNs, LPNs, CNAs, GNAs, and STNAs, ShiftMed can help address budget instability in healthcare. Here are some of the solutions that ShiftMed offers
Cost-Effective Staffing Solutions
ShiftMed provides a cost-effective staffing solution by offering local, credentialed nurses at nearly half the cost of travel nursing rates. With over 350,000 W-2 employees, healthcare facilities can reduce their reliance on expensive travel nurses and staffing agencies, contributing to operating budget stability.
Real-Time Visibility into Labor Costs
ShiftMed's Internal Resource Management technology provides real-time visibility into labor costs, allowing healthcare facilities to make data-driven staffing decisions. By consolidating staff data and open shifts, facilities can accurately budget for labor costs and identify areas where cost savings can be made.
Improved Retention Rates
ShiftMed can improve retention rates by offering non-monetary incentives, like Guaranteed Shifts®, Uber Health rides, and more, that can be leveraged for the workforce. Additionally, by providing access to a pool of qualified, credentialed nurses, ShiftMed can reduce the need for travel nurses and staffing agencies, contributing to improved retention rates.
Partner with ShiftMed for Optimal Budget Stability
Budget instability is a major challenge facing healthcare facilities and health systems today. This article has explored several leading causes of budget instability, including travel nurse contracts, staffing agency fees, lack of visibility into labor costs, retention challenges, and overtime expenses. To achieve operating budget stability, healthcare facilities must invest in innovative staffing solutions, such as workforce technology like ShiftMed.
By providing cost-effective solutions, real-time visibility into labor costs, improved retention rates, and other innovative tools, ShiftMed is revolutionizing healthcare staffing. Healthcare facilities and health systems are encouraged to partner with ShiftMed and other workforce technology solutions to achieve operating budget stability and provide high-quality patient care.