Have you ever tried to measure how much your RN vacancies cost your hospital?
For nearly a decade the healthcare industry has been battling an ongoing shortage of nurses following the exit of many retirees in the Great Recession coupled with the increasing demand due to the sheer size of the Baby Boomer generation. The cost of these vacancies has been significant and due to COVID-19 today has been exposed to the public.
The vast care continuum requires Registered Nurses not only in hospitals but in Skilled Nursing, Home Health, Occupational Health, Managed Care, schools and many other places. Sadly, for every RN opening, a dearth of expenses and lost revenue is created from 3 primary "hard cost" areas:
- Premium Pay of Current Staff - We often think of premium pay through the lens of overtime, yet often overlook the result that burnout and fatigue cause. While it is nice to throw extra shifts around here and there; relying on overtime instead of reducing vacancy rates to less than 7% is not a viable option
- Agency and/or Traveler Usage - The bane of many healthcare operators existence is the use of 3rd party nurses. Not because they are inherently bad, but because so many in the industry allowed their organizations to become overly dependent on this particular resource. On average, hospital executives would like to see only 6.1% of their staff as travelers, yet reported 11.1% of staff as travelers. Meant to be a stop-gap, it has become far too regular in many hospitals creating a host of additional challenges for your employees including engagement & satisfaction. (Bon Secours Mercy Health Agency Reduction Case Study)
- Patient Diversion - Diversion is bad for everyone. Hospitals lose out on potential income, but more importantly, vital seconds and minutes could be the difference in life & death for patients. More than 40% of ambulance patients are admitted following an emergency department arrival. This correlation is both a large revenue source for a hospital, but also a massively important tool in saving patient's lives.
These hard costs are quantifiable, but data that goes missing often is the additional "softer" costs such as poor patient experience and a poor employee experience causing additional revenue losses and additional expenses from hiring more nurses. According to one study, conservative estimates that a disengaged nurse cost up to $22,000 in lost revenue. The average turnover rate runs in the mid-teens and the average cost of turnover conservatively is $36,900!
At endevis, our goal is to help you scale recruitment to rapidly reduce vacancies. We have done this with more than 25 healthcare companies over the last decade including notable hospital systems such as Bon Secours Mercy Health, Tenet Health, Cleveland Clinic, and Christus Health System.
You are not alone! Many systems across the country are fighting the same battle each day and we are here to help you succeed. Check out our free book to reduce turnover and increase engagement: Drama Free Teams in Healthcare