MY TURN: From crisis to crisis with no loss of enthusiasm
| August 6, 2022 1:00 AM
For more than two years, Kootenai Health has been in a state of crisis management; first with the COVID-19 pandemic response, then (and still) with a health care labor shortage and now with related financial recovery. The idea of moving from one challenge to the next without loss of enthusiasm has been attributed to both Abraham Lincoln and Winston Churchill. Both leaders were famous for plain language and inspiring encouragement through difficult times.
Our time for plain language is now. In spite of our history of strong financial performance, Kootenai Health, like most mid-sized to large hospitals in the nation, is facing financial losses like none we have experienced before. The problem stems from our national labor shortage. Too many hospitals are competing for too few qualified employees. Idaho alone has 9,000 unfilled health care worker positions. Currently, Kootenai Health has 620 job openings. Contract workers — traveling nurses — have been the only available solution, but they are extremely expensive. Kootenai Health has been spending an additional $5.5 million to $7.5 million EACH MONTH on contract labor alone. Prior to the pandemic, contract labor expenses averaged less than $4 million per year. Clearly, the current rate is unsustainable.
Kootenai Health leaders have been working on a variety of strategies that will move us through this crisis and keep us on the path toward achieving our mission and vision. The first step is to reduce our use of contract labor. Here’s how that will look.
In order to recover, we must stop the financial losses driven by contract workers. The cost of travelers is unsustainable. We must fill jobs that are currently staffed by travelers with employees. To do this, we need to make the positions staffed by travelers more appealing so we can recruit and retain employees in these roles.
Effective July 31, employees in units and roles that have a high number of contract workers will receive competitive pay increases. These increases will put pay for these key positions above or on-par with other regional hospitals across the board. Even with the additional cost of these pay increases, reducing contractors in these areas will save Kootenai Health between $4 million and $5 million every month. While we wish we could give every employee a wage increase, this is a very targeted initiative aimed specifically at reducing nurse travelers in hard-to-fill positions and getting us through this crisis. We will continue to evaluate compensation, position by position, through our “work force of the future” strategies and our ongoing market compensation process.
Many other initiatives are in progress as well, from labor and operating expense reductions to income and revenue opportunities and unique, one-time earnings. For the remainder of 2022, Kootenai Health needs to identify and implement $35 million to $40 million in savings and increased revenue. The recovery strategies already identified will not be easy to do and they will require everyone’s participation. That being said, we have good reason for hope.
Even through the challenges of the pandemic, labor shortage and financial losses, Kootenai Health has never lost sight of its mission or vision. In fact, even through the pandemic, Kootenai Health achieved Magnet redesignation for nursing excellence, was named a Gallup Exceptional Workplace and received recognition from the National MS Society as a Center for Comprehensive MS Care. In spite of the current crisis, we will take the steps needed to stabilize operations and recover financially. We will continue to make progress on our strategic plan and we will continue to provide exceptional patient care.
The same enthusiasm that produced our proud history of success and brought us through the pandemic will carry us through this challenge. We will enthusiastically work as one connected team continuing to build on our legacy of being an exceptional health care organization.
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Jon Ness is the CEO of Kootenai Health.