At this stage of the pandemic, community hospital leaders are navigating new issues even as they continue to face familiar struggles. Currently, labor shortages and increasing staffing costs are two of the most significant challenges. 

Labor shortages, long predicted by demographers, have been accelerated by the pandemic. The shortage is creating cost strains due to increased reliance on contract staff and staffing agencies. Inflation and low unemployment rates have further increased the need to pay higher wages to attract staff. Hospitals in smaller communities are particularly challenged because these areas have a smaller untapped labor pool.

At the same time, community hospitals continue to navigate more familiar financial and operational challenges. In this climate, it’s more important than ever for leaders to rebuild and move forward. 

1. Short- and long-term labor planning: Now is the time to reduce staff strain and maximize efficiency with productivity management. Engage department leaders to establish realistic staffing ratios and monitor actual levels on a daily or even shift-by-shift basis. At the same time, work to maintain employee morale with employee engagement programs. Also keep an eye on the future by implementing long-term plans to reduce the reliance on contract labor through partnerships with educational institutions to build a future pipeline of potential employees.  
2. Track and improve financial performance: Early in the pandemic, hospitals struggled to understand, apply for and track federal, state and local assistance programs. Today, proactive leaders are focused on building an adequate cash cushion to weather unforeseen challenges ahead. Daily monitoring and communication of volume data, revenue and other financial metrics with internal leaders helps to improve employee buy-in. Financial challenges may even point out opportunities to improve operational efficiency and patient care. Hospitals that are good stewards of their resources will be in a more secure position for the future.
3. Foster communication and community appreciation: As front-line workers grow weary, the need for strong leadership is more important than ever. Rally community support and cast a clear vision for the future. It’s important for staff to understand that you support their efforts, welcome their feedback and have a well-conceived improvement plan. Some hospitals are using government assistance funds to provide financial incentives for staff at a time when optimism is in short supply.
   
4. Engage in political advocacy: It’s vital that state and local leaders understand the situation for hospitals and healthcare providers. Use your current relationships in addition to organization and association memberships to advocate for your hospital. Share regular updates about increasing costs, staffing shortages and other challenges with political leaders to illustrate the situation and offer input on what support is needed at the government level.
   
5. Invest in technology: One of the beneficial aspects of the pandemic was the acceleration of telehealth acceptance and reimbursement. This option provides an affordable means to alleviate traditional provider constraints typical of small towns and rural areas. Consider telehealth initiatives as a means to expand hospital services and reach your entire market service area.

Community hospital leaders who take decisive action now will see financial and operational improvements that will provide long-term stability for the future.

By Michael Morgan, SVP Strategic Analysis February 15, 2022 Financial Performance, Critical Access and Rural Hospitals