Hospitals reduce services over staffing concerns

Memorial Hospital of Carbon County lost five labor and delivery nurses to travel jobs during the COVID-19 pandemic. For a department made up of just 12 people, the impact was immense.

The hospital turned to contract workers and paid three to four times as much for nurses to fill vacancies so the maternity department could operate.

“It’s not something that could be budgeted for in advance. It really caught us. We saw a dramatic impact on our finances,” said Stephanie Hinkle, the Rawlins, Wyoming-based hospital’s marketing and communications director.

After four months of relaying heavily on travel nurses, the rural hospital’s board of trustees made a tough call, Hinkle said. “From January to April, we saw such a dramatic change in cash position. For the good of the entire organization, and for us to continue to exist as an organization, something had to take place,” Hinkle said. 

The board announced Memorial Hospital would halt labor and delivery services in June.

“This was an incredibly difficult and emotional decision,” board chair Rod Waeckerlin said in a news release issued in April. “Unfortunately, as a result of the pandemic, MHCC has lost a number of nursing staff, forcing a reliance on traveling nurses and creating a financial imbalance operationally.”

Hospitals like Memorial Hospital have felt compelled to temporarily or permanently cut services or to consolidate departments because of staff shortages. Although travel workers can fill in for short periods, hospitals executives don’t see them as financially viable over time. 

Ellis Medicine in Schenectady, New York, announced it would pause admissions to its adolescent inpatient mental health unit over staffing in May. “It’s been frustrating. The challenging situation we are in—as a healthcare provider and together as a community—is related to the national healthcare staffing crisis. This crisis wasn’t caused by COVID, but the ripple effects of the pandemic certainly complicate it,” Ellis Medicine President and CEO Paul Milton wrote in an open letter at the time. 

This year has been the worst financially for hospitals since the pandemic, according to research by healthcare consultancy Kaufman Hall. Nationally, operating margins were -0.98% in July, the seventh negative month in a row, the firm found. The median change in operating margins was -63.9% compared to the a year before. 

The losses stemmed from falling patient demand, the high cost of temporary employees and the end of federal pandemic relief funding streams, said Erik Swanson, senior vice president of data and analytics at Kaufman Hall. “Hospitals are sort of facing it alone at this point and, ultimately, they’re in a tough position,” he said. 

Contract labor as a percentage of total workforce expenses increased from 2% in 2019 to 10% in 2022, and the contract nurse wage rose from $64 to $150 per hour, according to Kaufman Hall. Healthcare hiring has escalating since mid-2020, but hospital employment remains 36% below where it was in January 2020, according to the Bureau of Labor Statistics. 

Many health systems are scaling back services and figuring out creative ways to continue providing care, said Therese Fitzpatrick, a senior vice president at Kaufman Hall. “They’re becoming much more deliberate and nuanced about providing the right level of care in the right location,” she said. 

For example, some health systems without enough operating room employees are moving surgeries from hospitals to ambulatory surgery centers, Fitzpatrick said. Others are shifting workloads and relying more on support staff to reduce the need for contract workers, she said. 

University Hospitals in Cleveland has openings for about 900 registered nurses, which is about 10% of its nursing workforce and a significantly higher vacancy rate than usual. “We have shortages everywhere in almost every role,” Hinchey said.

The health system announced in July that it would stop offering inpatient, emergency, radiology and some ambulatory services at its Bedford and Richmond Heights locations and would direct patients to other sites. At the time, University Hospitals reported its highest-ever number of unfilled jobs and could not provide a full array of services. University Hospitals retained about 90% of the 500 Bedford and Richmond Heights employees affected by the changes, according to the not-for-profit company.

“We have to have a couple of things that stay top of mind always. That includes quality and safety. What comes along with that is some very difficult and hard decisions,” said Michelle Hereford, chief nursing executive.

The health system first reduced the number of inpatient beds at the two hospitals and stopped surgeries at one site last October because of inadequate staffing. “What we saw over time was that shortage got bigger and bigger, and it got harder and harder to find even contract labor,” said Dr. Paul Hinchey, president of University Hospitals Community Delivery Network. Offering services at those two facilities when the same care was available at hospitals a few miles away became impractical, he said.  

Healthcare safety organization ECRI identified worker shorfalls as the top patient safety concern this year in a report published in March “We know when there are staff shortages, it impacts patients throughout their entire care process,” said Shannon Davila, associate director of ECRI’s safety solutions program. “Certainly, there is a risk to the patient if healthcare organizations are forced to cut services.”

Health systems must weigh the risks and benefits that reducing services creates. While understaffing could be a threat to patient safety, so, too, could lack of access, Davila said. “It can’t just be a quick decision. They have to think about the risk to the staff, the finances of the organization and the risk to the patient.”