Providers need to understand what millennials and Gen Z are looking for from their workplace experience.
As healthcare's workforce changes, so too must hospital CEOs' approach to recruiting and retaining the clinical and non-clinical staff of tomorrow.
This month's HealthLeaders cover story explored the generational differences that are putting pressure on decision-makers to meet the needs of a diverse workforce.
Here are three tips to meeting those demands, especially of the youngest generations, from Crouse Health CEO and HealthLeaders Exchange member Seth Kronenberg, AdventHealth CEO Terry Shaw, and University Health CEO Ed Banos.
The HealthLeaders Exchange is an executive community for sharing ideas, solutions, and insights. Our exchange program hosts a CEO Exchange annually.
The company said its financial turmoil partly stems from Steward Health Care's own troubles.
The list of healthcare provider bankruptcies this year has now grown to include Miami-based CareMax.
A combination of factors, including increasing expenses and its relationship with Steward Health Care, led the organization to file for Chapter 11 bankruptcy, according to a filing with the U.S. Bankruptcy Court for the Northern District of Texas.
CareMax, which serves approximately 260,000 patients annually and employs around 1,100 employees across 46 clinical centers, listed debts of $693 million and assets of $390 million in the filing.
In the lead-up to bankruptcy, the company suffered a net loss of $683.3 million for 2023 before experiencing a loss of $170.6 million in its most recent earnings report for the second quarter.
As part of its restructuring process, CareMax will sell the Medicare Shared Savings Program portion of its management services organization to Revere Medical, formerly known as Rural Health Group and backed by private equity firm Kinderhook Industries.
Revere Medical also finalized the acquisition of Steward’s physician group, Stewardship Health, last month, signaling its interest in distressed assets.
Steward’s own bankruptcy influenced CareMax’s financial downturn, the company’s chief restructuring officer, Paul Rundell, outlined in the filing.
After acquiring Steward’s Medicare value-based care business in 2022, CareMax served as the exclusive value-based management services organization across Steward’s Medicare network. However, Steward filed a motion to reject its business relationship with CareMax this summer when it filed for chapter 11 bankruptcy.
Beyond Steward, CareMax struggled with swelling costs from leases, rising interest rates, changes in regulatory reimbursement, inflation, rising labor and operational costs, and high levels of medical utilization following the pandemic.
“This confluence of economic factors constrained CareMax’s ability to raise new capital as a crucial moment for the newly expanded enterprise, which left the Company with limited options to address its funded debt obligations,” Rundell said in the filing.
Several providers have felt the weight of the current financial climate and entered bankruptcy recently. CareMax competitor Cano Health filed in February after the Miami-based provider had difficulty generating profit from its Medicare Advantage business.
A recent report by Gibbins Advisors, however, showed that healthcare bankruptcies are in decline overall. Through the first six months of this year, the report tracked 29 filed bankruptcies, which followed 79 cases in total for 2023.
The drop in volume is driven by fewer cases involving middle-market companies with liabilities ranging from $10 million to $100 million, Gibbins stated.
It's incumbent on hospital leaders to address the concerns of all their employees to ensure a sustainable workforce.
For hospital and health systems CEOs, recruitment and retention efforts with the current workforce require more than a one-size-fits-all approach.
As many as five generations make up clinical and non-clinical staff at organizations, putting the onus on decision-makers to understand the various factors that are driving workers to switch jobs or exit the industry.
The youngest generation could see the biggest exodus in the near future, with 22% of Gen Z (ages 18-27) reporting they plan to leave healthcare within the next three years, according to a report by Soliant Health.
The number one reason Gen Z cited for departing healthcare is an unhealthy workplace environment and culture (14.1%), which was also the leading cause for surveyed workers ages 44-59 (20.6%) and 60-plus (23.7%).
High levels of job stress or burnout were other significant drivers for ages 44-59 and 60-plus, at 19.9% and 19.1% respectively, but less of a concern for Gen Z (9.4%).
Meanwhile, ages 28-43 cited high levels of job stress or burnout as their main issue (19.1%), followed closely by poor work-life balance (17%).
When it comes to reasons for choosing a job, salary and benefits were top of the list for all generations, with ages 44-59 (25.3%) and 60-plus (25.5%) ranking them highest.
Work-life balance was most important to ages 28-43 (21%), while career advancement opportunities were more relevant for ages 18-27 (15.9%).
One area that the youngest generation showed significantly more interest in was technology and tools available for the job, which, at 7.3%, was at least more than double any other age group.
The different preferences and motivators among generations means organizations need to expand their offerings to appeal to as many people in their workforce as possible.
Check out this month’s HealthLeaders cover story to learn how hospitals CEOs are fighting the multigenerational war within their own walls.
CEOs should prioritize an area that workers say is their top concern yet doesn't receive enough attention.
It’s not a secret that improving your workers’ wellbeing gives you a better chance at keeping them. However, there’s a disconnect between the type of wellbeing that employers are providing and the kind employees want more of.
Financial wellbeing was identified as the priority for workers surveyed by global advisory, broking, and solutions company WTW, despite it being the most underserved area by employers, highlighting the need for organizations to rethink the benefits they offer.
WTW fielded responses from 535 U.S. employees working at medium and large private sector companies in various industries from March to April 2024.
While two-thirds of workers (66%) said financial wellbeing is their top concern, it ranked the lowest for employer priorities (23%). More employers are focused on supporting mental (73%) and physical wellbeing (50%), which also matter to employees, but not nearly as much as financial wellbeing initiatives.
Nearly half of employees (48%) deal with moderate or major issues in at least two areas of their wellbeing and 41% report that their financial situation is the area of wellbeing they face the biggest challenges, according to a separate WTW survey on global benefits attitudes. By addressing what workers are seeking with their wellbeing, organizations can combat burnout and increase engagement, resulting in higher retention rates.
Some of the ways surveyed employers are striving to improve employee financial wellbeing are:
Offering navigation and decision support to help maximize programs in place
Offering coaching to help build financial resilience skills
Educating employees on the various financial issues they may face
Offering personalized financial decision support
Addressing affordability through a total reward lens, looking at health, risk and retirement benefits, as well as pay, and connecting their strategy to DEI goals
Though CEOs need to make up ground on financial wellbeing, many organizations are beginning to recognize the importance of the employee experience as an outcome of wellbeing strategy. More than a third of surveyed employers (37%) said they are looking to make wellbeing a foundational element of their human capital strategy in the next three years, compared with just 11% currently.
How wellbeing initiatives are communicated and linked to company culture can also be determining factors for success, which is why employers should continue to evaluate if they’re meeting the diverse needs of their workers and reaching as many employees as possible.
A new report by PitchBook highlights how privae equity dealmaking is faring across the industry.
Private equity’s activity in healthcare services in the third quarter was diminished.
An estimated 148 private equity deals were announced or closed in the quarter, a drop-off from the 185 deals in the second quarter, as investors turned their attention to other sectors, according to a PitchBook report.
Despite the downturn, which is on pace to result in a deal count for the year that is 15% below 2023 levels, the market data provider continued to stand by the prediction it made in the previous quarter that private equity investing in healthcare services hit a “turning point.”
“We are standing by that call, although we are still waiting for the resulting deal announcements as processes drag on and sponsors try to time the market,” Rebecca Springer, lead analyst for healthcare at PitchBook, wrote in the report.
Regulatory pressure and high interest rates, along with price differences between buyers and sellers, have cooled the market and brought down activity from the highs of 2021.
PitchBook anticipates investments to increase at the end of the year with dealmaking timelines extended, but noted that growing optimism among buyers and sellers in the second half of 2024 is being directed toward healthcare IT and pharma services.
Within healthcare services, areas that are seeing the most sponsor demand and interest, which include medspa and outpatient mental health, have a shortage of platform-scale assets, the report stated.
Two larger platform trades in applied behavioral analysis earlier this year should be a precursor for more deals there, while home-based care should still have some buzz.
Though investors have recently shied away from physician practice management companies, PitchBook expects to see the market pick up a bit partly due to regulatory concern stabilizing.
The report also said that the Medicare Advantage market drying up is causing struggles for value-based primary care assets, such as Cano Health and Clinical Care Medical Centers. The former filed for bankruptcy earlier this year while the latter followed suit in October.
The deal is expected to generate around $1.2 billion in revenue for Prospect, which adds a partner willing to invest in delivering care.
Astrana Health has had made its latest bid to add to its expanding portfolio.
The technology-driven company has entered into a definitive agreement to buy certain assets and businesses from Prospect Health System for $745 million to continue building out its integrated healthcare delivery platform.
Astrana will acquire Prospect Health Plan in California, Prospect Medical Groups in California, Texas, Arizona, and Rhode Island, management service organization Prospect Medical Systems, pharmacy asset RightRx, and Tustin, California-based Alta Newport Hospital, doing business as Foothill Regional Medical Center.
To fund the transaction, which is expected to close in the middle of 2025 if it passes regulatory approval, Astrana stated it will use cash on hand as well as a $1.1 million senior secured bridge commitment.
Astrana, which rebranded from Apollo Medical Holdings earlier this year, has been active in acquiring companies that fit its value-based care arrangements.
In October, the company close its deal for Collaborative Health Systems, a management services subsidiary of Centene.
The pieces of Prospect that Astrana is obtaining allow it to round out its care delivery and management service organization offerings, while bringing in Prospect’s approximately 610,000 members across Medicare Advantage, Medicaid, and commercial lines of business onto its platform.
“Prospect's established presence in key markets also opens new opportunities for Astrana, particularly in geographically adjacent Orange County, California, where we today have limited operations,” Brandon Sim, president and CEO of Astrana, said in a statement. “We believe this acquisition continues to solidify Astrana as our nation's leading healthcare delivery platform, enabling us to deliver technology-driven, longitudinal, and patient-centered care to an estimated combined 1.7 million members across the country."
In its third quarter earnings, Astrana reported total revenue of $478.7 million, which was up 37% from the $348.2 million reported in Q3 2023. Net income, meanwhile, was $16.1 million, down 27% from $22.1 million over the same period last year.
For Prospect, the transaction is expected to generate around $1.2 billion in revenue with expected adjusted EBITDA of $81 million for the 12 months ending December 31, according to the announcement.
Astrana said it will significantly invest in Prospect and its infrastructure to improve access and quality of care for local communities.
"We are excited at the opportunity to partner with Astrana to build a larger, stronger, and more coordinated care delivery network which we expect will benefit our communities by increasing access, quality, value, and efficiency,” Jim Brown, CEO of Prospect, said in a statement.
Making financially-sound decisions to fortify the workforce requires proactivity and discipline.
The financial toll of the workforce crisis facing healthcare is placing immense stress on the bottom lines of hospitals and health systems.
Labor costs are high and continue to rise as a result of recruitment and retention efforts to mitigate employee turnover, which continues to plague organizations in the current climate.
Executives spanning the C-suite got together in Washington, D.C. at the recent HealthLeaders Workforce Decision Makers Exchange to shares ideas on how to improve ROI with the workforce. Here’s what they said.
Taking risks with technology
Whether it’s AI or virtual nursing, leaders should be welcoming technology into the workplace to improve efficiency, attract talent, and combat burnout.
Investing in technology means pouring financial and operational resources into solutions without knowing for certain that the direct ROI will be there, especially in the short term, but organizations can’t afford to be risk-averse with battling workforce shortages.
The technology doesn’t even need to be outside-the-box. “We’re chasing bells and whistles” instead of trying to solve for areas like clinical and administrative burden, said Praveen Chopra, chief digital and information officer for Emplify Health.
Solutions like ambient listening tools to automate transcribing not only reduce time spent on tasks for clinicians, resulting in fresher workers, but allow for that extra time to be used more effectively instead of cramming in more time for patients.
Virtual nursing can also be a valuable investment to provide flexibility for nurses wanting more optionality.
Sharla Baenen, chief operating officer at Emplify Health, Bellin region, said that her organization wanted to use virtual nursing to become a destination workplace. However, measuring its impact wasn’t so clear. On the clinical side, Bellin focused on decreasing vacancy rates and the length of stay and saw that those targets were being met. From a workforce perspective, ROI can be quantified through recruitment and retention rates, and qualified through nurse engagement, which Baenen shared has gone up.
Regardless of the technology providers are considering though, clinicians should be involved from the get-go in the process of designing solutions that are easy to use and don’t require extensive training—another clinical and administrative burden. How clinicians are educated and re-educated on using technology can often make-or-break whether the juice is worth the financial squeeze.
Managing labor resources is critical for organizations right now with 40 cents of every dollar going towards labor, said Mike Marquardt, CFO of UVA Health System.
Leaders should look at a holistic approach to the workforce, with CFOs needing to partner with CMOs, CNOs, and COOs to get the right employees at the bedside. Hearing from those employees on how to create more efficiency and make their lives easier will also enable for greater engagement.
It’s incumbent on executives to set the tone for management and hold them accountable as well. That may involve creating more opportunities for training or education of managers, allowing them to be better equipped to allocate resources and put workers in the best position possible.
One of the primary ways organizations can be more cost-effective with staffing is by phasing out expensive contract labor, Marquardt stated. For example, traveling nurses, while instrumental for providers during the pandemic, aren’t delivering the bang for your buck to sustain a workforce. The focus should be on recruitment of new staff and retention of employees already in the building, which have clearer ROI.
By aligning workforce initiatives with strategic goals and optimizing labor expenses, organizations will be able to overcome staffing shortages while maintaining financial health.
See more coverage from the HealthLeaders Workforce Decision Makers Exchange here.
The HealthLeaders Exchange is an executive community for sharing ideas, solutions, and insights. Please join the community at our LinkedIn page.
Details on the acquisition have emerged after the two sides inked a definitive agreement.
The terms of General Catalyst’s purchase of Summa Health have finally been revealed.
The venture capital firm’s Health Assurance Transformation Corporation (HATCo) signed a definitive agreement to acquire the Ohio-based hospital operator for $485 million, the organizations announced, with the details outlining the conditions of the transaction.
General Catalyst first shared its plans to scoop up a health system to be a proving ground for new technology around a year ago at the HLTH conference. It then selected Summa in January, with HATCo CEO Marc Harrison saying the nonprofit’s size and status as an integrated delivery system made it the right fit for transformation.
In acquiring Summa for $485 million, HATCo will allow the system to wipe out its existing debt of $850 million when combined with its current cash, according to the announcement. The remaining cash will go towards funding a separately governed community foundation to support investment for community health in greater Akron region.
HATCo is also committing $350 million in capital funding over the first five years for routine purposes and investment in technologies, along with $200 million over the first seven years for strategic and transformative investments.
The injection of capital will be beneficial for Summa, which experienced an operating loss of $37 million for the first nine months of 2023 after suffering an operating loss of $39 million in 2022.
“As part of HATCo, Summa Health will be better positioned to build upon our existing strengths and capabilities while also benefiting from new opportunities and technology. Our goals are to expand access to care and improve the experience for our patients, providers and staff,” Summa president and CEO Cliff Deveny said in a statement. “This is only the beginning of our long-term journey together.”
Summa will need to transition from a nonprofit to a for-profit provider, potentially creating a regulatory hurdle. However, Harrison and Deveny said earlier this year that they don’t anticipate regulatory scrutiny being a “huge issue” as they worked with the Ohio Attorney General’s office and the Ohio Department of Insurance.
In the announcement of the definitive agreement, the organizations said they are submitting applications to authorities like the Ohio Attorney General, the Ohio Department of Insurance, and Federal Trade Commission to comply with the regulatory review process.
Hospital divestitures also shaped the for-profit health system’s finances, which included $5.1 billion in revenue.
Tenet Healthcare’s restructuring strategy is paying dividends on the bottom line.
The health system delivered a strong third quarter, driven by increased patient volume in its hospital and ambulatory businesses, while feeling the effects of a shifting portfolio after completing hospital divestitures.
For the quarter, Tenet reported a net profit of $472 million and revenue of $5.12 billion, which were both up from the respective figures of $101 million and $5.06 billion for the same period in 2023.
Tenet has sold several of its hospitals in recent years to place more focus on its ambulatory segment, made up of United Surgical Partners International (USPI) and its 520 ambulatory surgery centers and 24 surgical hospitals across 37 states.
Ambulatory revenue in the quarter grew by 21% year over year to $1.14 billion, with surgical business same-facility system-wide net patient revenues jumping 8.7% and net revenue per case increasing 7.6%.
Speaking to investors on an earnings call, Tenet chairman and CEO Saum Sutaria said: “Our transformed portfolio provides us with a high degree of capital and financial flexibility. We will continue to deploy capital to enhance growth in our industry-leading ambulatory surgical business through M&A and de novo development, increased capital spending to fuel organic growth and return excess capital to shareholders via share repurchase given that we believe our equity continues to trade at attractive multiples relative to the market.”
In its hospital segment, same-hospital net patient service revenue per adjusted admission increased 3.3% year over year, contributing to revenue of $3.98 billion. Revenue declined 3.4% from the third quarter in 2023 mainly due to hospital divestitures in the first quarter of this year.
Those first-quarter sales included nine hospitals: three South Carolina hospitals to Novant Health for $2.4 billion, four South California hospitals to UCI Health for $975 million, and two other California hospitals to Adventist Health for $550 million.
In October, Tenet also completed its sale of its 70% majority ownership interest in Brookwood Baptist Health, a five-hospital system based in Birmingham, Alabama.
“All of the sales that we have executed on have been at high multiples to reflect the operational improvements that we have made to each of these facilities over the last several years,” Sutaria said. “More importantly, as a result of these sales, our current hospital portfolio has an enhanced return profile, more attractive geographies for us and our business model, higher expected returns on invested capital that should result.”
Even after its divestitures, Tenet continues to benefit from many of its sold hospitals through the retention of its revenue cycle management subsidiary, Conifer.
However, the completed transaction of the Alabama hospitals caused Tenet to revise its 2024 revenue guidance to $20.6 billion to $20.8 billion, “$100 million lower at the midpoint versus our prior expectations,” Sutaria said.
It's crucial that organizations think beyond the standard recruitment and retention efforts.
The future of healthcare depends on the ability of hospital and health system executives to sustainably inject the industry with new talent.
That objective requires educating, recruiting, and retaining younger clinicians through a different approach than has typically been the case to ensure that staffing shortages aren’t too much to overcome.
Health system leaders recognize that while they may have as many as five generations working in their organizations, it’s the newer generations that are making up the bulk of their staff. Executives must consider what younger workers value to effectively recruit and retain them.
In recruitment, organizations will often have to sell themselves to newer candidates instead of the other way around. One of the ways providers can do that is by being quicker in their responses to job applications, which is a top factor for applicants accepting new positions. Streamlining processes and utilizing AI to speed up the application process can significantly improve hiring practices.
It’s also vital to have people who can speak the language of younger workers involved in the recruitment process. This can involve utilizing high performing bedside nurses to engage with candidates and share the culture of the organization, as well as their own experiences. Providers should also get creative with recruiting through social media such as TikTok to increase visibility among millennials and Gen Z.
After staff are on board, organizations should prioritize flexibility to retain workers. Newer generations want more work-life balance, which means traditional shifts and schedules may need altering. Implementing technology that can reduce clinical and administrative burden, like ambient listening, can also reduce burnout and employee turnover.
Pictured: Executives share strategies on the first day of the HealthLeaders Workforce Decision Makers Exchange.
Overcoming barriers to entry
On the physician side, health system executives are concerned about educating enough doctors to combat shortages.
The low rates at which medical schools accept applicants compared to the vast number that apply means that many potential physicians are left without a path to the profession. Medical schools, however, are hard to innovate, due to the number of regulations and restrictions involved.
Leaders would like to see policy changes on how medical schools and residency are funded, as well as a way to combine undergraduate and medical school together to offer greater opportunities.
In the meantime, the explosion of APPs has filled the void, but executives still need to figure out how to best optimize and capitalize on the talent of APPs. This could include using an APP counsel to help retain them, and creating executive positions to oversee them.
Stay tuned for more coverage of the Exchange as executives further discuss solutions for the workforce.
Are you a CEO or executive leader interested in attending an upcoming event? To inquire about attending the HealthLeaders Exchange event, email us at exchange@healthleadersmedia.com.
The HealthLeaders Exchange is an executive community for sharing ideas, solutions, and insights. Please join the community at the LinkedIn page.
