More than two years into the COVID-19 pandemic, the U.S. economy continues to face a long list of challenges. Right near the top of the list – or maybe even at the top of the list – is a workforce shortage.
The healthcare industry, without question, has been uniquely impacted by the pandemic. Hospitals have been hammered by employee turnover and continue to feel the effects of a staffing shortage across virtually every layer of their organization.
Baker Tilly principal David Gregory recently spoke about this important issue at InterGrowth 2022, an annual dealmaking conference in the middle market hosted by the Association of Corporate Growth (ACG).
“I think we can officially say that we’ve got a crisis in terms of our healthcare workforce,” Gregory said.
Gregory cautioned the crowd that the healthcare workforce shortage is not simply a nursing issue. That myth, he noted, is perpetuated by the media and others who are not immersed in the industry.
In fact, there are a million doctors in this country and roughly one-third of them will retire in the next 10 years . So, within the next 5-to-7 years, the healthcare industry already will be facing a legitimate shortage of physicians. Yet, the issue runs even deeper.
There are 3 million nurses in the U.S., but many more will be needed over the next decade. Also, pharmacies, labs and healthcare administrative teams are facing a staffing dilemma as well. The issue, in fairness, existed before the pandemic began. But like so many aspects of our society, the staffing problems in the healthcare industry were exacerbated by the pandemic.
Obviously, COVID-19 created a unique situation for hospitals, but the reality is that it still only took a matter of weeks before hospital CFOs in New York City were forced into duty pushing stretchers and cleaning rooms. So, this dilemma was never that far away, to begin with.
Looking forward, Gregory stressed that the healthcare industry must start to work smarter, more creatively and with more of an eye on innovation. There will be shortages in key areas. At this point, hospitals need to just accept that fact as they prepare for a pivotal stretch in the history of the industry.
Traditional models of staffing in healthcare are out the window, he continued. Healthcare professionals need to increase their usage of predictive analytics, using the available data to create better staffing models. Additionally, hospitals need to get people working at the top of their licenses; in other words, they need to get everybody in the hospital doing the work that they’re most qualified to do.
Hospitals also can consider outside-the-box programs such as hospital at home, a program in which patients are evaluated at a hospital and then taken back home to receive inpatient care and recover. Currently, only about 5% of hospitals in the U.S. are taking advantage of this program .
Reflecting on the value of programs like hospital at home, Gregory noted that “hospitals are the most expensive hotels in the world.” He pointed out that even if 5% of patients could recover from home instead of occupying valuable hospital beds, it could make a big difference in terms of costs and, in particular, in terms of staffing.
Outside-the-box ideas in the healthcare industry – pharmacogenomics and the use of clinical algorithms are two others – are not going to solve the staffing crisis. But they certainly can help. And at this moment in time, hospitals need to consider all unconventional ideas, staffing strategies and available resources to minimize the impact of the staffing shortage and give the healthcare industry as a whole a better chance of success over the next decade – and beyond.
From a private equity standpoint, the industry’s recent focus on care delivery has not resulted in a more efficient system and in fact has resulted in more inefficiencies driven by investors’ financial goals . From our perspective, the private equity community needs to re-focus on approaches, interventions and business models designed to put less stress on the delivery system like personalized medicine, remote monitoring, smart technologies and models that integrate medical and behavioral health.
For more information on this topic, or to learn how Baker Tilly specialists can help, contact our team.
Source  Doctor shortages are here—and they’ll get worse if we don’t act fast, April 2022
Source  AAMC Report Reinforces Mounting Physician Shortage, June 2021
Source  Acute Hospital Care at Home Resources, June 2022
Source  American Hospital Association, 2022
Source  COVID-19 and Private Equity Investment in Health Care Delivery, March 2021