Healthcare, long known for costly and time-consuming recruiting cycles, is seeing those factors increasing exponentially, with senior level roles taking on average well over half a year to fill.

Sector job openings are at historic highs this year and are currently the highest of any industry. Meanwhile, the healthcare unemployment rate has fallen and is now the second lowest of all sectors, resulting in a significant labor supply/demand imbalance.

Healthcare recruiting teams find themselves pushed to their limits, both in terms of demand, as well as in lack of staffing for their own teams to deal with what has gone beyond a surge and entered into the realm of status quo.

COVID has a double-whammy effect on revenue cycle teams as staff availability is limited by illness, isolation requirements, and vaccine mandates, while COVID also drives volatility in claims and work volumes for these same teams making it especially challenging for health systems and hospitals to adequately staff their revenue cycle operations.

According to survey data from AKASA, a healthcare AI-tech company with focuses on revenue management for health systems, time to fill and costs are spiking across all levels:

• Entry-level revenue cycle talent (0-5 years): On average, costs $2,167 for recruitment and takes 84 days to fill vacant roles.
• Mid-level revenue cycle talent (6-10 years): On average, costs $3,581 for recruitment and takes 153 days to fill vacant roles.
• Senior-level revenue cycle talent (10+ years): On average, costs $5,699 for recruitment and takes 207 days to fill vacant roles.

Of note, the complete cost to recruit is likely higher as healthcare leaders often don’t have a full line of sight into the total cost of recruitment managed by marketing and HR as well as the costs associated with training and onboarding new staff.

“The complexity of healthcare has always made staffing a challenge, but the pandemic is now making adequate staffing an impossibility,” said Malinka Walaliyadde, co-founder and CEO of AKASA. “Health systems simply can’t get the staff they need to get all the work done. So we have to change the way we work. We need to eliminate repetitive tasks and leverage our minimal staff to work on only the most cognitively complex activities.”

Healthcare employees are leaving their jobs for other reasons beyond the Great Resignation. In the wake of the Federal Vaccine Mandate, 12% of healthcare workers say they’ll retire early or leave for jobs not covered by the mandate. Coupled with the 18% of healthcare workers that have already left their jobs in the past year, turnover within the healthcare workforce is acute.

Longer hours, increased pressure to be more productive, and a sense of providing a decent patient financial experience in this environment are significantly challenging for teams. This combination increases the likelihood of morale issues and burnout while preventing teams from adapting quickly in the face of a rapidly shifting work environment.

Surging Costs Caused by Lack of Supply

Through September 2021, hospital employment had decreased by 93,000 since the start of the pandemic, according to data from the Bureau of Labor Statistics. The reduction in September alone was 8,100.

The drop in supply has sparked a surge in wages as hospitals scramble to fill essential positions. Clinical labor costs have increased by an average of 8% per patient day compared with 2019, amounting to $17 million in additional annual expenses for a 500-bed hospital, according to data from PINC AI, a platform of Premier Inc.

“From a financial performance perspective, labor costs continue to be our biggest challenge,” said Nancy Hoffman, executive director of financial operations analytics with St. Louis-based Mercy health system. She said the organization’s contract labor expense has been nearly triple the historical rate in recent months, “and it continues to climb.”

The rise in staffing costs is not expected to subside anytime soon. Hospitals and nursing facilities need to maintain sufficient nursing staff to address COVID-19 cases and care for an aging population. In response, they are turning to more expensive contract nursing to fill personnel gaps. Staffing issues are more of a challenge for smaller, rural hospitals that are generally less able to compete for nurses or pay for overtime, traveling nurses and premium pay relative to their larger, more urban peers. Furthermore, relatively new competition for non-clinical staff from non-healthcare companies, particularly in the service industries, is compounding an already challenging staffing situation.