Hospital Workers Are Down, Costs Up

November 12, 2002 ( - Labor shortages are up 12% this year in hospitals across the country, according to a new survey by Buck Consultants.

Two-thirds of all health care systems are experiencing a labor shortage this year, up from 55% a year ago.   Additionally, hospitals report 50% of all vacancies are for six months or more and account for many key positions, such as nursing, radiology, and pharmacy.  

Forty-three percent of all hospitals have had to downsize this year.   This figure is up from 25% from a year ago as cost containment is cited by 75% as a key issue.  

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To contain costs, hospitals report utilizing pay for performance and annual incentives as retention tools, with 33% increasing variable compensation levels the past two years to link rewards more closely to performance.  

The more quantifiable performance measurements are now composed of a patient satisfaction factor of 80%, up 30% from last year.   Other measured factors include more traditional income and revenue targets.

Health care systems are exploring other options for cost containment as well:

  • 76% are redesigning business processes or integrating computer systems
  • 71% are increasing marketing activities, up from 55% last year
  • 43% are increasing employee contributions to insurance plans, including higher co-pays and deductibles
  • 33% are outsourcing laundry service, up from 15% last year.

The survey revealed underutilized areas that may help hospitals cut cost and reduce turnover, among them:

  • Only 50% use the internet as a recruiting tool
  • Only 38% use achievement/spot awards
  • Only 14% use retention awards in critical areas

The survey was completed with information from more than 200 hospitals nationwide.   More information on Buck Consultants Corp, a subsidiary of Mellon Financial can be found at .