Watching the list
By Donna Ecclestone, Associate Director, Physician Integration/ Onboarding, Duke University Medical Center, Durham, NC
Who’s the latest on the list? That’s the question on the minds of healthcare leaders across the country. They want to know the newest members on the growing list of hospitals and health systems announcing layoffs. Unfortunately, no one seems to be immune regardless of size or location.
In the Nov. 12 issue of Modern Healthcare, David Dranove, professor of health industry management at the Kellogg School of Management in Evanston, Ill. stated, "Hospitals are labor-intensive. And if we are going to see cost cutting in hospitals, the first place to look is in labor.”
The American Hospital Association states that the number of organizations implementing labor cuts will continue to grow, especially with the two percent across-the-board cuts in Medicare payments enacted through sequestration. Other catalysts include new reimbursement policies, aging populations, consumerism, and a national slowdown in healthcare spending due to higher out of pocket costs. With these mounting pressures, hospitals and health care settings are being forced to streamline their financial resources.
The figures are frightening. National data from the Bureau of Labor Statistics show that the average monthly hospital hiring is down 81 percent compared to 2012. In fact, the healthcare sector as a whole actually shed jobs in September – a historical turn.
How does this news affect our industry? When our mission is focused on recruiting the best candidates for our organizations, will the funding be available to support our recruitment efforts? Will the hospital be able to supply staff members for new providers to allow them to be successful? Also, let’s not forget reputation and image. Does having your organization plastered in news articles because of an announcement of staff reductions affect a potential physician’s interest? And what about our recruitment departments’ staffing, structure and expenses? How could these changes affect how we operate?
ASPR Past President, Brett Walker, Director of Physician Recruitment at Indiana University Health, has experienced significant changes within his organization over the past few years. Indiana University Health and Indiana University School of Medicine created a new academic multi-specialty group, Indiana University Health, which is the largest system in the state. Recent changes due to the Affordable Care Act, declining inpatient volumes, and increased market competition forced Indiana University Health to leverage system resources, implement economies of scales, and create a leaner, more efficient organization. Changes include new justification protocols implemented for all positions where all new hires must now be reviewed and approved by labor management.
Unfortunately, global staff cuts were implemented as well. Walker’s office was not immune, which meant that each remaining recruiter in his department had to take on more searches. Additionally, since his department’s recruitment budget is globally funded, it was significantly reduced. To offset this reduction, Walker introduced new reimbursement guidelines for recruitment expenses. For instance, there is now a limit on the number of people Walker’s office will cover at recruitment dinners. Each department must supplement the difference for any guests over the allowance. Walker’s department is also seeing an increase in advanced practice provider recruitment, requiring recruiters to forge closer relationships with Human Resources on those opportunities. This could be a trend other organizations in our industry experience in the future.
Fortunately, the recent news of cuts has not affected the volume of candidates, or their interest in Indiana University Health. Walker contributes this consistency in recruitment to the organization’s reputation as a leader in healthcare and its strong brand. In fact, the cuts may be viewed in a positive light. By creating a leaner organization, Indiana University Health will be positioned for future success when the dust settles.
Let’s face it - every organization is going to feel the hit of policy changes. This is a period of transition for everyone in healthcare. In-house physician recruitment professionals need to adopt and promote best practices and be part of the solution. Maximize, centralize and economize. Work smart. Be good stewards of system resources. Do more with less. Be process driven and detail oriented. These are all themes we have learned through our fellowship programs and at our annual conferences. Now it is important to educate others and put these themes into action for there are leaner times ahead.
Carlson, Joe (2013, November 12). Job losses from cost-cutting likely to continue, though ACA may not be to blame. Modern Healthcare.
Leonard, Kimberly (2013, September 20). Is Obamacare to blame for hospital layoffs? USNews. Retrieved from http://health.usnews.com/health-news/hospital-of-tomorrow/articles/2013/09/20/is-obamacare-to-blame-for-hospital-layoffs-is-obamacare-to-blame-for-hospital-layoffs