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Healthcare Predictions for 2023: Hard Choices and Working Smarter

Every December, between shopping for gifts and finalizing open enrollment selections, we check in with our expert healthcare friends to learn what forces will shape the industry next year.

We asked four broad questions to veteran advisors across legal, operations, innovation, digital, strategy, patient experience, marketing and more. Big takes: More of the very Hard Choices healthcare leaders are already navigating…and being ever smarter with the limited resources that remain. Welcome to 2023.

Read through it all, or click on the headshots below to skip right to each expert’s insight.

Questions for the Experts

  1. What’s the primary force that will influence healthcare next year?
  2. What big change will result from that force’s activity?
  3. What topics, trends and opportunities are hot for healthcare provider organizations in 2023? What’s cooled off?
  4. How does the public feel about healthcare provider organizations today? Do people trust, appreciate and support their hospitals and health systems?

High Level Themes

We asked intentionally broad questions to give each expert latitude to answer based on their own perspective and professional expertise. The diversity of perspective and nuance among responses was clear. And yet, there was dramatic overlap in the themes highlighted by each panelist. That triangulation – seeing similar answers from, say a transaction attorney and a digital expert – points directly to the themes healthcare providers will want to focus on in the new year. Here are those themes.

Note: In January, we’ll share findings from our 5th national survey of healthcare consumer perceptions, touching on many of the themes identified here.

Primary Forces

Workforce Crisis

The persistent shortage of healthcare workers was a universal theme. The issue is acute across the care continuum, but particularly challenging at the level of primary care – where pent-up demand is highest and the where the patient journey typically starts.

Green circle with a white dollar sign symbol in the middle

Financial Headwinds

Full stop. Lower incomes and shrinking margins, along with reduced investment returns, either lead to every other issue or make solving them difficult.

Results of the Force

Hard Choices

Provider organizations will have to evaluate every investment and partnership. Tradeoffs loom. Health equity and workforce support are necessary – how do resources for those priorities get allocated? It will be a year of frank talk and tough decisions with a fierce need for clear and transparent communication from leadership.

Yellow lightbulb icon with navy blue detailing

Smarter, Not Harder

After making hard choices comes taking action on them. Provider organizations can’t cut their way to success. They also need to “actively create what’s next.” That means no favoritism towards legacy solutions and openness to those delivering the highest impact at lower cost. Even if there’s an initial investment in time, money and training.

New Relationships

Or better ones for provider organizations. Whether through M&A, joint ventures or with payers. Though opinions vary on the likely pace of M&A activity in 2023, our panel agrees that mergers, acquisitions and partnerships will continue to make headlines as provider organizations seek the most efficient and sustainable path forward. Financial challenges will also push more productive conversations between providers and payers, perhaps spilling over into collaborative innovation. (One can hope!)

Opportunities

Digital

The challenges present an opportunity for transformation of tools and overarching digital strategies. It’s far more than telehealth – which is necessary and no longer a differentiator. Transformation means everything from saving money by reallocating print resources to digital marketing, to allowing patients greater access to their PHI through technology, to evaluating patient usage of mobile apps and improving ADA accessibility on web properties.

A hand icon holding an orange heart

Health Equity

It’s part of the patient experience, it’s part of supporting the healthcare workforce, it’s part of fulfilling the mission to care for the whole person. And now, it’s also a business and regulatory imperative with ratings and credentialling agencies using equity as a metric.

The Patient Experience

This runs the gamut from the tangible – useable digital tools – to the conceptual – full transparency. Patients are looking for convenience to make accessing healthcare easier and more consumerized, ways to expand the front door of primary care, and clarity about how things work in healthcare and what they cost.

Mental Health

The mental health crisis – for the public and for healthcare workers – had been a topic of conversation for years before soaring into view during the pandemic. The issue of addressing people’s needs in a holistic way so they can live well and be productive – and be happy while doing it –remains in 2023.

Trust

People like and trust those who deliver care. While they value the role of hospitals and health systems – especially since the pandemic – the highest praise goes to caregivers themselves. However, our experts noted that some people don’t – or would prefer not to – think about their local hospital. And there’s also a just-under-the-surface skepticism about transparency and accessibility efforts, as well as lingering suspicion from days of rampant COVID-19 misinformation. That flashes a yellow light to provider organizations, and should compel them to frequently ask themselves the question, “Is what we’re doing operationally and conveying publicly truly representative of a patient’s experience at our system?”

Panelist Answers

Want to learn more about the details of each theme referenced above? Here are the responses provided by each panelist.

Jennifer O’Meara

SENIOR DIGITAL STRATEGIST

Eruptr

What is the primary force that will act on healthcare next year?

Workforce and Inflation. The first thing people do when costs rise is put off caring for their own health. Additionally, with all facets of healthcare struggling to keep up with demand, staffing will continue to be one of the most important challenges to tackle.

What big change will result from that force’s activity?

In terms of staffing, I hope to see better pay and working conditions along with an increase in young people going into the medical fields due to the demand and opportunity for a solid career trajectory. But the U.S. needs to make it a financially viable career path, especially for PCPs, OBs, etc. One major concern regarding staffing is people – who already put off care due to COVID and may be behind in receiving simple wellness checks – not being seen in a timely manner. Additionally, the continued struggle for people to find PCPs who are accepting new patients.

What topics, trends and opportunities are hot in 2023. What’s cooled off?

Transparency for patients regarding health records and costs, especially with institutions potentially charging money for sending messages to doctors via patient portals in the coming year. No more excuses for not being able to provide information about cost of procedures. Make that information readily available to patients via patient portals – especially if you are going to start charging to simply answer a patient’s question.

In terms of what’s cooled off, telehealth – it’s expected and offered by everyone and no longer a differentiator. Now, it’s about how you improve upon the experience and make it easier for patients of all ages to receive care remotely.

How does the public feel about healthcare provider organizations today?

There is certainly increased trust and respect for the work of hospitals, health systems and the medical field in general. But I think patients, aka consumers, are increasingly frustrated by a system that makes it incredibly difficult to find and receive the care they need in a timely manner along with a complete lack of transparency when it comes to costs for procedures and services. The insurance companies blame the health systems, and the health systems blame the insurance companies, and patients and clinical providers are stuck in the middle. This is something marketers need to especially keep in mind when it comes to communications and marketing materials: Is what you’re conveying truly representative of a patient’s experience at your system?

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Jordan Shields

PARTNER

Juniper Advisory

What is the primary force that will act on healthcare next year?

Inflation, workforce challenges and investment losses dominated 2022. Along with recovering from the pandemic’s impacts on operations, these forces are leading well-positioned hospital systems of all sizes to seek increased scale providing operational, financial and clinical efficiency. Hospital transactions, which have been down since 2019, are roaring back in 2023 as organizations prioritize patient care, quality and access over historic governance structures.

What big change will result from that force’s activity?

The fragmentation of the American hospital system bears significant responsibility for its high costs and middling quality. Consolidation leads to more profitable hospital systems with higher quality and better patient outcomes. Scale benefits can take time to materialize, especially when the consolidation is the result of a weak organization that delayed partnering as long as possible, but improved quality will be the result of this trend towards larger, more efficient hospital systems.

What topics, trends and opportunities are hot in 2023. What’s cooled off?

Multi-region transactions will be a hot topic in 2023. For example, as Advocate and Atrium stated in their merger communications, the Midwest and the MidAtlantic are now adjacent healthcare markets. While the scale benefits of hospital transactions can include in-market clinical and referral synergies, those tend to be secondary to the market-independent structural synergies of best practices, corporate finance, population health infrastructure, purchasing and other synergies. However, to fully realize those benefits, organizations typically need to undergo structural and ownership change, indicating that loose affiliations and other “dip-the-toe-in” partnerships are likely to cool off in 2023.

How does the public feel about healthcare provider organizations today?

People are expecting more from their hospital systems. While they trust, appreciate and support their care teams, they are increasingly skeptical of the organizations for which those clinicians work. Layer in front-line labor challenges and patients directly shouldering an increasing share of the healthcare dollar and the frustration becomes palpable. However, the industry remains filled with folks who entered healthcare to help others. Organizations that can build environments where those folks want to work will be successful going forward.

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Mike Cole

Mike Cole

MANAGING DIRECTOR

Alvarez & Marsal

What is the primary force that will act on healthcare next year?

Inflationary pressures (including the cost and access to capital) coupled with skilled labor shortages should be the predominant headwind in 2023. Our practice diligences healthcare services in a broad swath of sectors – big and small – and these trends, unfortunately, continue to worsen as we enter the new year. Perhaps in a distant second is the likely increased regulatory focus that usually accompanies a split Congress.

What big change will result from that force’s activity?

Unfortunately, there is likely to be some distress followed by restructurings – both in and outside of court. Those acquirers whose balance sheet and operations allow are going to have some compelling M&A opportunities.

What topics, trends and opportunities are hot in 2023. What’s cooled off?

The M&A landscape has cooled from a record 2021 and hot 2022 (through Q3). That said, healthcare M&A is nothing if not resilient and, as we know, recession resistant. The march towards value care and innovation through healthcare consumerism are also poised to make some big leaps in 2023 with ‘real’ capital lining up to advance their efforts.

How does the public feel about healthcare provider organizations today?

The public values and trusts their physicians and care teams, including their local hospitals. I think there are other players in the healthcare ecosystem that are less trusted, and there are going to be some questions brought to the forefront about how the pandemic was handled in connection with the aforementioned divided Congress. That could exacerbate the shaky footing.

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Bob Wilson

Bob Wilson

PARTNER

Nelson Mullins

What is the primary force that will act on healthcare next year?

If picking just one thing, it would be a continuing workforce crisis for all our healthcare clients, particularly hospitals and health systems. We simply don’t have enough front-line healthcare providers to meet the demand.

What big change will result from that force’s activity?

The shortage is causing crippling labor costs, and there’s no significant mitigation of this problem on the horizon. In addition to stripping hospital margins, workforce shortages in key areas will likely continue to drive a shift towards access through digital healthcare platforms.

What topics, trends and opportunities are hot in 2023. What’s cooled off?

Again, there should be an uptick in telehealth services and remote patient monitoring. There are some very innovative solutions available that could continue to change the way healthcare is delivered.

Also, expect new rules related to HIPAA and information blocking – healthcare data privacy and security will continue to be huge.

On a different note, it’s tough to ignore what looks to be a continuing crisis in mental health – more people are being impacted, and it’s a continuing need that must be addressed.

Finally, I see a continued trend toward more non-traditional companies getting into healthcare.

How does the public feel about healthcare provider organizations today?

Our client hospitals and health systems have rallied public support well in the COVID era and have burnished their reputations as critical community assets.  This could be one of the major lasting impacts of COVID – additional well-deserved respect is accorded our local healthcare systems and, in particular, our community healthcare providers.

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Emily Evans

Emily Evans

SECTOR HEAD, HEALTH POLICY

Hedgeye Risk Management

What is the primary force that will act on healthcare next year?

Workforce development and labor shortages. It is underappreciated how durable the labor disruption will be. Healthcare has not faced a shortage of resources in 50 years and, as such, has not been forced to make hard choices and/or innovate its way into less dependency on human capital.

What big change will result from that force’s activity?

It will vary between non-profit and for-profit or, perhaps more accurately, between health systems that are prepared for and actively engaged in cost control, including healthcare’s most significant input, labor. The only answer, ultimately, will be innovation – particularly that which saves time. In the near term, there are likely to be reductions in service lines, backlogs of cases and even reduced access. Ongoing labor disputes are also likely.

What topics, trends and opportunities are hot in 2023. What’s cooled off?

The most important trend we see that will aggravate labor and workforce issues is payer conflict. That will probably lead to more health system consolidation, about which the FTC will have fewer arrows in their quiver than they would like. Ultimately, health systems that control their markets will be price setters, and that is the direction many will head.

How does the public feel about healthcare provider organizations today?

The public generally supports their doctors and, to a certain extent, the dominant hospital in their region. However, that trust is eroded by a lack of transparency on price and, often, quality. Payer conflicts with employer plans are going to drive even more people into high deductible plans where price really matters as most people become cash payers.

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Regan Chris

Chris Regan

MANAGING DIRECTOR AND PARTNERSHIPS CO-LEADER

Chartis

Robert York

Rob York

DIRECTOR AND PARTNERSHIPS CO-LEADER

Chartis

What is the primary force that will act on healthcare next year?

Workforce/labor in every way imaginable – cost structure, retention, burnout, training/development, pipeline, staffing models – has to be put at the top of the list right now. This was mentioned in last year’s predictions for 2022 and it carries forward into 2023.

Another force to highlight is the ever-expanding world of partnerships and M&A activity beyond traditional hospital-to-hospital transactions. Hospital transactions are still a big part of the landscape as we move into 2023, but we are seeing a wider variety of joint ventures and other arrangements in areas such as ambulatory access, digital health, high-reliability care, health equity and payer/health plan products. Our clients are investing heavily in partnerships that fortify their presence across the ambulatory ecosystem surrounding their hospitals.

What big change will result from that force’s activity?

One anticipated change from workforce challenges will be the continued evolution of new care delivery arrangements including alternative sites and care models. The advancement of digital and key strategies such as Hospital at Home are part of the solution.

We will continue to see health systems focus on building scale and capabilities outside of the traditional hospital component of the healthcare ecosystem. They will not be short of options and partners in this effort, but the challenging economy and limitations to accessing capital will determine how extensively and quickly many organizations collaborate.

What topics, trends and opportunities are hot in 2023. What’s cooled off?

All of the areas mentioned above will continue to be hot throughout 2023. In addition, health equity, digital health and programs/models that truly integrate care financing and delivery (especially with managed governmental payer lives) will continue to be top of mind in 2023.

In general, opportunities that are capital intensive and have a long time to market or realization of value have cooled off.

How does the public feel about healthcare provider organizations today?

In many ways, the pandemic has fortified the trust that patients have for their providers and health systems. There is considerable admiration for all that providers have done to help us through the pandemic. At the same time, as traditional aspects of inpatient care melt to ambulatory settings and as ambulatory care melts to virtual and at-home settings, the need to expand the health system footprint to offer easy access across the continuum of care is greater than ever.

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Marquise Stillwell

Marquise Stillwell

FOUNDER & PRINCIPAL

Openbox

What is the primary force that will act on healthcare next year?

Digital transformation, which will include affordability and accessibility, particularly with underserved and rural communities.

What big change will result from that force’s activity?

It would help to close the digital divide. If we can start to think about better broadband access for the most vulnerable, we begin to close that divide. This would also allow more access to high-speed internet for educational and entrepreneurial uses.

What topics, trends and opportunities are hot in 2023. What’s cooled off?

The trend of care centers specializing in wellness has cooled off. A lot of them never differentiated themselves enough to make strong strides in the marketplace. My hope is that we get back to basics. I don’t need fancy couches and cappuccinos in the waiting room, I just need good, affordable healthcare.

How does the public feel about healthcare provider organizations today?

There’s a lack of trust. I think COVID really exposed the misalignment of info. We’re at a place now where we don’t necessarily know which source to trust. But we’re now dealing with fear-driven policies that are forcing individuals and families to make tough decisions. We need people-centered policies that support healthy outcomes for all.

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James Cervantes

James Cervantes

SENIOR VICE PRESIDENT

Jarrard Inc.

What is the primary force that will act on healthcare next year?

The workforce is the primary force that will drive healthcare next year. The needs of physicians, nurses and employees should serve as the North Star for all healthcare systems if they want to weather the financial headwinds and be successful. Without a healthy healthcare workforce, there’s no ability to deliver care. There’s no ability to realize and drive innovation. There’s no way to create healthier communities and improve the healthcare system.

What big change will result from that force’s activity?

It’s not one big change that will solve the workforce issue. Rather it will require HR, Operations, Communications and other areas working together to create a culture where people want to stay and where top talent wants to come to work. There’s a real need for health systems to solve for burnout, address recruitment and turnover issues, find ways to unlock the full potential of the resources they have and create a culture that is rooted in inclusivity and belonging. Not to mention, a reimagined strategy for how they communicate and connect with their workforce. These are the changes that need to happen to build a sustainable workforce and will be the most important work for healthcare organizations next year.

What topics, trends and opportunities are hot in 2023. What’s cooled off?

Beyond the workforce, there will be a heightened focus on financial improvement initiatives, including labor and non-labor expenses, patient access and acquisition and health equity. In a sea of strategic priorities, health equity has not been at the top of that list. But with this year’s release of CMS’s framework for health equity and US News & World Report’s unveiling their health equity methodology – not to mention the healthcare disparities and inequities that were illuminated and worsened by the COVID-19 pandemic – it will be interesting to see if health systems finally address this issue and start investing in it.

How does the public feel about healthcare provider organizations today?

Honestly, I don’t think the average patient or consumer pays a lot of attention to their local hospital or health system. Especially if they don’t have ongoing healthcare needs. Sure, they trust their provider. But beyond that, how often are they thinking about and engaging with their clinician’s organization? I would wager very little. I think people also view the healthcare system as wildly inefficient, costly and confusing. If we truly want to improve the health of communities and solve some of the underlying causes of our unhealthy nation, provider organizations need to be collaborating with their communities and addressing social determinants of health. Maybe then, patients and consumers will start to see hospitals and health systems in a more positive, visible light – as a place that helps you be well and takes care of you when you’re sick.

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Kerrin Slattery

Kerrin Slattery

PARTNER

McDermott Will & Emery

What is the primary force that will act on healthcare next year?

“Financial headwinds” will be the primary force and continue to exert outsized pressure on healthcare in 2023. These headwinds, which collectively include things like increased labor costs, inflation, access to capital, reimbursement, and so on, make it challenging for health systems and other industry players to execute on more strategic and innovative strategies.  Notwithstanding that, collective demand for improved performance across the industry remains high, which will require health industry players to evaluate their portfolios, geographies and partnerships to enable improved ability to provide accessible, high-quality care to the patients and communities they serve.

What big change will result from that force’s activity?

With every challenge comes an opportunity, so these financial pressures are motivating organizations to move more quickly on strategies across the care continuum. This pressure will hopefully result in innovations to address a lot of pain points providers are currently experiencing, from labor force to patient experience to cost management. We’ll see a lot of healthcare organizations looking beyond their own four walls to outside collaborators to harness the power of their own data, work more efficiently and develop solutions that “work smarter, not harder.”

What topics, trends and opportunities are hot in 2023. What’s cooled off?

Even as the economy presents challenges, expect healthcare mergers and acquisitions to continue in the year ahead. For those in the position to buy, this opens the door to acquiring distressed assets or consolidating with others. For others, portfolio reassessment will result in divestitures or joint ventures of assets that organizations no longer feel compelled to wholly own and operate.

What has not cooled off is the conversation about workforce wellness, as providers and staff remain stretched. That conversation should continue as there is no substitute for nurses, doctors and those on the front lines in caring for the population, even when that care is becoming more virtual in some instances.

How does the public feel about healthcare provider organizations today?

We’ve certainly learned over the past several years that healthcare workers and healthcare organizations are essential. While patients may have trust in their individual providers and maybe even their local hospital or health system, there is great dissatisfaction with the incredibly complicated puzzle of providers, payers, pharmaceuticals and the sources of healthcare funding. The increased focus on well-care and not sick-care will enable different engagement between consumers and the health care system, which raises the prospect of a healthier health system for all.

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Jesse Neil

Jesse Neil

PARTNER

Waller

What is the primary force that will act on healthcare next year?

Workforce/labor will continue as a singular challenge for healthcare systems and providers. It adversely impacts access to care, quality of care and financial well-being of organizations. Many hospital systems will still not be able to open all their licensed beds due to the inability to staff them.

What big change will result from that force’s activity?

Within the sizeable group of hospitals that already operated at single-digit or negative margins, many will seek to consolidate with other systems or dramatically restructure. I’m optimistic that for hospital systems that have proactive and engaged leadership, this dynamic will lead to innovation in delivery models and technology – perhaps even in collaboration with payers and employers.

What topics, trends and opportunities are hot in 2023. What’s cooled off?

Payers, providers and investors continue to focus on delivery models and technology that allows healthcare to be delivered at home or otherwise outside the hospital or physician office. Consumerism and “bending the cost curve” will drive this trend through 2023 and beyond. Provider organizations will increasingly assume financial risk, and payers will continue to build out provider-side capabilities. Ironically, dedication to outcome-based reimbursement models such as improved clinical outcomes, preventative care targets or reduction in medical errors, seems to have stalled a bit and isn’t perceived as a solution to the near-term existential threats providers face.

How does the public feel about healthcare provider organizations today?

I can honestly report that I have seen unprecedented community support for and goodwill towards their local hospitals, health systems and providers. This is particularly true for hospitals and health systems that are transparent about industry challenges and aggressively engaged to tackle them. In my experience, community stakeholders want to be part of the team and the discussion.

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Expert Quotes

Rex Burgdorfer

Rex Burgdorfer

PARTNER

Juniper Advisory

What is the primary force that will act on healthcare next year?

Our health system M&A clients are most concerned with achieving financial sustainability and addressing quality-of-care issues in the face of organizational stress. These forces have caused a significant increase in parties considering transactions.

What big change will result from that force’s activity?

We sampled ~15 health systems that our team is working with around the country in evaluating M&A opportunities.  Two-thirds are hospitals seeking a larger partner.  One-third are larger systems pursuing growth. 20% are local government-sponsored, 20% faith-based, and 60% secular. Local Governments are the category most likely to undergo change in the coming years.

What topics, trends and opportunities are hot in 2023. What’s cooled off?

The high degree of variance in the regulatory environment from state to state cannot be overstated. Our bankers are working on transactions in 13 states and involve 35 hospitals. The difference in pace and stance toward business in markets like California, Illinois and New York is vastly different from states like Alabama, Georgia, and Kansas. That has a bearing on partnerships motivated by a desire to construct new facilities or pursue vertical integration.

How does the public feel about healthcare provider organizations today?

Many of the independent hospitals we are working with are seeking partnerships that address community relations, transparency and patient experience. The role of foundations has taken on greater importance. Nonprofit acquirors are now more commercially skilled and are utilizing structures that create meaningful proceeds to further support health needs in the community. Some of these resources are filling a void that exists in lower acuity, non-hospital settings.

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Pete Lawson

CEO

Lawson & Associates

What is the primary force that will act on healthcare next year?

Significant operating income losses coupled with declining investment returns will force hospitals and health systems to reduce non-corporate initiatives and staffing.  Over the last few years significant effort has been placed on health equity efforts, so health systems will need to reconcile the costs of those endeavors with increased salary demands by clinicians.

What big change will result from that force’s activity?

Significant and strategic communication resources will be needed for public and internal communications should health systems trim back social initiatives. It’s easier to initiate on these than retreat. Threading the needle will require outside communication assistance.

What topics, trends and opportunities are hot in 2023. What’s cooled off?

Quality parameters will become a priority for antitrust regulators looking at mergers and collaborations. Health systems will need to match quality measurement variables to insurance company models long before requesting mergers. Health systems will also need to reach across the aisle to insurers to start building trust early rather than ending up in what are too often combative negotiations.

How does the public feel about healthcare provider organizations today?

As both a current, long-term patient and a healthcare executive I respect both sides of the equation. Patients trust the health system as long as their care team is supportive. When healthcare workers are negative towards a health system – in public or private – then the public’s opinion will turn. It’s one thing to address public protests, but more difficult to assess and manage are private bedside discussions between caregivers and patients. That’s where the focus needs to be both short and long term.

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Up close headshot of a smiling woman with curly, brunette hair dressed in a blazer in front of a blurred background

Abby McNeil

VICE PRESIDENT & REGIONAL HEALTH SYSTEMS PRACTICE LEAD

Jarrard Inc

What is the primary force that will act on healthcare next year?

Ongoing financial constraints caused by inflation, rising costs of labor, etc.

What big change will result from that force’s activity?

We hunkered down and got through the pandemic but have emerged with seemingly more intractable issues to face. Something has to give: Providers can’t just grind through or cut their way out of financial challenges. Healthcare no longer has the luxury of maintaining the status quo, doubling down on what’s always been done or wasting precious time overly focused on what competitors (or Amazon) are doing. In 2023, healthcare providers should focus as much energy and as many resources as they can muster in creating what’s next, getting clear on what they do best and carving out a brand position and strategies that are laser-focused on who they want to be and leaving behind who they’re not.

We all need to continue investing in the transparent conversations that started in 2020. After all, there’s a reason that the consumer brands that invested in communications in 2020 and 2021 increased in value by an average of 43% during that time.

What topics, trends and opportunities are hot in 2023. What’s cooled off?

What’s hot: Responses to all the tough forces at play, such as…

  1. How to invest increasingly limited resources – I heard a healthcare leader ask, “If I have $1, do I invest it in compensation or wellness/ engagement?”
  2. Patient acquisition – How do providers get more patients who can pay?
  3. Access – Can we actually get patients in the door?
  4. Marcom structure and staffing – How many people do marketing and comms teams need and in what roles? Are they focused on the right priorities?
  5. Health equity, especially now that it’s required. How do providers translate nice, fuzzy statements into actual progress with limited budgets?

How does the public feel about healthcare provider organizations today?

People don’t think about hospitals and health systems unless they have to. People “in the real world” are busy with their own lives, struggles and priorities. Most only think about provider organizations when they need care. They may think about provider organizations as they consider their skyrocketing insurance premiums, but otherwise most would prefer to think about the hospital only when they need it…which they hope is not often.

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Special Report: Recruitment Starts with Retention

“Mom, today I found out how I can own my own store.”

Was that the first thing you said as a teenager coming home after your first day of your first job slinging guacamole at a fast-food restaurant? Nope? Wasn’t for us either.

But that did happen to a teen whose orientation at Chipotle included a pathway to go from line crew to store manager to franchisee. And what a profound lesson for healthcare organizations struggling with staffing, said Dan Collard, co-founder of Healthcare Plus Solutions Group, who recently shared the story with us.

As Collard sees it: Recruitment starts with retention when companies give employees a reason to stay and grow.

Healthcare’s persistent workforce shortage is one of the industry’s most daunting issues right now. Everything’s on the table: large sign-on bonuses, retention bonuses, raises as everyone competes to staff up, whatever it takes. Many, especially rural hospitals, are barely hanging on. A few numbers to illustrate the point:

BY THE NUMBERS

96

Rural hospitals having difficulty filling nursing roles

11

Increase in salaries and benefits reported by HCA in 2021

54%

Rural hospitals significantly increased reliance on travel nurses

75

Nurse leaders citing employee emotional health as key concern

We all know the problem illustrated by those numbers. But how did it get so complicated?

Social context. The great resignation is affecting every facet of the workforce, with retention of hourly employees particularly tenuous.

Damsky

Expectations for greater pay, better benefits, improved work-life balance, career development opportunities and a desire for a better connection with employers are leading employees to push for change and/or leave their position in pursuit of it. Nurses, techs and shared services employees are expressing those same expectations but with the added layer of the intensity of their work.

Different process. “How people are going about getting talent has evolved as nursing recruitment has been empowered by technology. That’s making it more costly and more competitive,” said Pamela Damsky, director and Performance Practice co-lead at Chartis.

Jung

Jeffrey Jung, engagement manager at Chartis, pointed to the rapid rise of placement firms and “matchmaking technologies” that help connect provider organizations with talent. Jung said the matchmaking software can increase the speed at which a nurse can be placed and make better matches on the front end to boost retention. “It’s cheaper than just using placement firms because of the technology, but the overall cost is increasing because there are so many more applicants being hired,” he said.

Jennifer O’Meara, senior digital strategist at digital marketing firm Eruptr,

O’Meara

said the recruitment campaigns her firm ran online before COVID-19 tended to be “as needed” and focused on RN recruitment. Now though, Eruptr is involved in comprehensive recruitment campaigns that run constantly across platforms. Budgets, she said, “are double and triple what we were running previously, and it’s not just SEM, it’s Facebook, it’s Instagram, it’s display ads, it’s YouTube… it’s everything.”

More competition. Atop increased cost due to shifting talent acquisition processes is the pressure to raise compensation through bonuses and higher salaries to compete with other organizations in the market for a smaller and, perhaps, more selective talent pool. Hospitals are vying for the same nurses and trying to fend off the travel firms. At the same time, nurses and other staff have far more options, with outpatient clinics and health services companies delivering outstanding care and offering attractive careers.

Frayed relationships. The pandemic has accelerated a breakdown between title bands. Leaders are working to keep the whole operation running, staff are keeping things clean and caring for patients, managers are liaising between the two. Nurses aren’t happy. They’re being asked to do more with less. The LinkedIn post from nurse Kelly Fassold illustrates it well. Fassold compellingly expresses the anger many nurses feel towards administration, regulators, hospital groups and anyone else trying to codify salary caps – or even just discuss nurse compensation. The relationship between administration and staff is broken, and nurses feel like they are – or actually are – on the outside looking in as discussions about their value take place. It understandably leads to the sentiment of being both disrespected and undervalued. “You’ve left us out of the conversation and you don’t understand what we do so how can you tell us what we’re worth?”

Surviving then solving the nursing shortage

The healthcare staffing crisis isn’t intractable, but it’s not going to be solved in the short term. Right now, healthcare execs and HR teams are doing whatever is necessary to have just enough staff on shift to deliver care. Whatever it takes. That only adds to the unsustainable feedback loop and the feeling that we’re in the middle of a land grab, making it that much harder to plan for the long term. But plan we must. In fact, we must redesign the whole thing.

To do that, we have to establish the environment for long-term change to take root. First, a few thoughts on the tactics hospitals and health systems can employ.

Current Tactics for Recruitment & Retention

Hospitals and health systems are activating a variety of strategies to staunch the bleeding of the workforce crisis. We’ve curated a list of short and long-term interventions in force today and arranged them by feasibility for different types of provider organizations. After all, very few health systems have the financial wherewithal to buy a nursing school the way HCA did with Galen College of Nursing nearly three years ago.

Remember that nursing challenges arise indirectly as well when other areas of the organization break down. Take environmental services. When that department is understaffed, nurses end up with additional responsibilities because who else will change the linens? It’s more rocks in the nurses’ backpack.

Collard referenced a health system that was struggling with retention among environmental services and other support staff. Leadership changed the employee onboarding process so that, instead of following up with new techs after 30 and 90 days, those conversations happened on days one and two. That kept new hires engaged and allowed managers to uncover questions and problems instantly rather than letting them fester, improving the likelihood that the individual would stick around.

Again, wise to stay vigilant on the indirect disruptions that spill over onto nurses and address them promptly.

Building a culture of retention

Our experts agree there’s no easy solution, and the hard, sustainable solutions involve completely rethinking how we deliver care. But then they cite something that absolutely can be accomplished: building a culture that makes people want to stay. And when people stick around, you save on acquisition and training costs, maintain workforce stability and naturally gain advocates who may recruit others.

But O’Meara cautioned: “If you have to talk so much about culture and sell people on it when recruiting, do you really have a good culture to begin with? Is that culture reflected once you get past the advertising and the recruiters who make you feel so great about everything? Is it reflected once a new hire gets into the clinical setting?”

When you look up “employee retention” on stock photography sites, this is a lot of what you’ll find. But this represents a “what not to do” approach.

Professional development

Collard

Back to guacamole. After telling the story of the young man’s first day at Chipotle, Collard drew the contrast with healthcare organizations. “On Day One, we’re more interested in getting people set up with their password for the electronic medical record and showing them which gloves to wear,” he said.

In the push to get people working on their floor as quickly as possible, there are so many priorities to check off the orientation list that nothing is a priority. In contrast, Collard asked rhetorically, what if hospitals were more like Chipotle? “What would it be like if we began to engage our clinical staff on the day they started?” He mentioned research findings that indicate nearly four of five millennials will take a job with lower pay if it’s a job they feel connected with and that provides them a clear career path. It’s not always about the money. (Although yes, the Chipotle post below does feature the money along with the career trajectory.)

Jung emphasized this point, too, but with less avocado and red onion. Before COVID-19 there was less enthusiasm for bringing in a new graduate “because they require so much hands-on involvement,” as he put it. That hesitancy to hire novice nurses and techs is changing, and what’s becoming important now for retention in a smaller labor pool is giving people a clear pathway to move and grow.

Carter

A specific example of this in healthcare comes from Dawn Carter, a veteran healthcare strategist and founding member of the Rural Healthcare Initiative. She said that from the moment they initially consider a healthcare career throughout their time with an organization, people need to see how they can grow in their job or grow into another one. Hospitals that are already helping finance additional technical/educational investments have a massive leg up – they should do everything to make those opportunities known.

Carter cited a speaker from the 2022 South Carolina Hospital Association meeting who suggested hospitals ensure that high school students understand the low-cost path to a high-paying job. Someone paying two years of technical college tuition and coming out of it with an RN can enter the market making $60,000, but there’s the potential for $200,000+ by pursuing a CRNA.

Another example? Take the entry-level hospital employees working in “central sterile” cleaning surgical equipment. The skill level is such that they could work at an Amazon warehouse for more money and skip the dirty equipment. Hospitals, Jung said, can and should create a defined career ladder for techs. Many techs are in nursing school, and if you create those relationships and provide the opportunities, they’ll eventually want to come back or continue employment when they graduate, he said. “It’s the difference between a very transactional, ‘We need you here’ and a relational, ‘We’re going to invest in you – and we’d love for you to go back to school,’” he said.

Nurse-manager relationships

Go back to that LinkedIn post above. The post, and several comments below it, are built on the idea that unless someone has done the job they can’t know what it’s worth. It’s a push against salary caps, but it also reveals the significant gap between the suits and the scrubs. And it’s a fair point. The system is broken, staff see their census and patient acuity steadily increasing and the message many hear from managers and administration is a combination of, “Keep going,” and, “We can’t give you what you want.”

But again, sometimes what people want isn’t necessarily money. “We need to be sure we have salaries that match the market, but it’s more than dollars,” Damsky said. “It’s also treating nurses with respect and meeting their needs and creating an environment where they want to be.”

Carter highlighted the desperate need for leaders to spend time with staff, having heartfelt conversations about what they’re experiencing and humbly – not defensively – discussing leadership’s position on the issues and the various imperatives they’re balancing.

Sometimes it’s effective for managers and executives to share their own stories. We’ve heard from clients whose leadership spoke during town hall meetings about their toughest moments during the pandemic. Showing that level of vulnerability was powerful and helped dampen some of the tension that had been building.

Note that these conversations shouldn’t be used as distractions from or substitutes for practical interventions. They should be a supplement, a way to both solicit helpful information about what staff need and to demonstrate that the organization is working towards a collective solution.

Leadership development

Over the past couple of years, particularly during the omicron surge, we’ve seen an increase in non-clinical staff stepping in to help fill gaps. There are stories of managers running to get blankets, leaders helping empty trash. It’s certainly not happening everywhere or all the time, but more frequently than ever before.

That’s all well and good…but interestingly, our experts noted that it’s not necessarily the best thing. Plugging holes is an important crisis response and it’s great for showing staff that leadership is engaged, willing to do whatever it takes. Even so, there are drawbacks. “Leaders have been rolling up their sleeves and diving in,” Collard noted. “If I’m in that position, it means I’m spending less time leading and more time doing on the unit.”

Reconsidering Compensation

NOT EVERYONE WANTS TO BE A TRAVEL NURSE

— Nurse A 🖤🩺 (@Nurse_Lyss) February 5, 2022

We reference compensation throughout this piece and noted that it’s not always about the money. Two reasons for that:

  • First, the key thing organizations should be providing people with is an environment that attracts them and keeps them engaged. Which, again, isn’t to say that our industry shouldn’t be taking a long hard look at financial compensation.
  • Second, the current money isn’t sustainable – for anyone, but especially rural and independent facilities. The key is remembering that different people want different things, and any given organization can highlight the things it offers that will be attractive to someone, if not everyone.

 

According to Eruptr’s Jennifer O’Meara, hospitals in bigger cities with more competitive markets are relying more on bonuses and the financial incentives, while rural facilities and systems lacking competition but without the financial wherewithal are focusing on the intangibles. Think quality and cost of living. She said that in many recruitment campaigns there’s less emphasis on the standard “great culture” line and “a big push in online campaigns and in discussions about how making this move can be better for your quality of life.”

Cessna

Joel Cessna, Eruptr’s vice president of sales pointed out another example of alternative compensation for rural locations and those that can’t compete financially: creative benefits packages. For example, five weeks of vacation vs. three. “That’s a critical thing nurses are looking for, especially when you think about the exhaustion and burnout today,” he said.

Organizations need to find ways to get leadership out of staffing and back into leading, while equipping them to lead effectively. It’s the management version of practicing at the top of one’s license. It doesn’t mean someone never steps in to do something that isn’t in their job description. It means they’re doing their best so that they can help those in their care and on their team do their best.

“Leadership development becomes really important,” said Damsky. “It’s the thing that falls by the wayside because who has time for it?” There’s a cost when leadership development is put on the back burner and, conversely, a clear benefit when it’s maintained. Damsky mentioned a client who tracks employee engagement against their organizational development work. “They ask questions like, ‘Does my manager make me feel valued?’ and track that against staff turnover. They’re looking for negative correlation,” she said.

Helping staff feel valued involves moving leader rounding beyond checklists and perfunctory appearances. Collard said that it’s training leaders and giving them the space to have relationship-centric conversations. He said, “So when a leader says, ‘How are you doing?’ it means, ‘I’m not just asking, I’m really interested. It’s just me and you right now. How are you? What do you need?’” Collard cited a large medical center where a high-caliber ER nurse quit suddenly. When the team did some digging, they found out she hadn’t left for an agency to make more money. Instead, there were things at home affecting her ability to stay at the hospitals. Per Collard, the nurse executive said, “Oh my gosh, if we’d only known, we could have done something to help her!”

Eventually, healthcare provider organizations will be able to shift some of the focus from the crisis of filling shifts to the long-term structural change that will make staffing far easier. Many had laid such groundwork pre-COVID. And there is an array of remarkable health services companies rolling out software and innovative care models to solve the problem. Artificial intelligence, remote nursing, hospital at home, standardizing meal prep across a system, automated revenue cycle – everything that will put nurses and staff in a position to do what they do best and offload much of the rest.

We’re not there yet, but the foundation is in place and the frame is starting to take shape. In the meantime, provider organizations must step back to ensure that even as they continue the necessary scramble to fill shifts, they’re laying the groundwork. That means giving everyone in the organization permission and practical support to keep going. Starting on Day One.

A Note on Nursing Labor

Nurses unions have been talking about staffing levels and compensation for years. Now, the conversation has come to them. Hospital advocacy groups could push back saying that it didn’t make sense to implement rigid staffing requirements; organizations of different types and sizes and locations needed flexibility. But on the heels of the pandemic, staffing has become a core concern, both among the public and healthcare workers – a point proven by the most recent Jarrard Inc. national survey.

47

The public citing staffing shortages as a top concern

64

Healthcare workers citing staffing shortages as a top concern

In addition, the business side has come to the forefront, and with it a rising skepticism among nurses and staff about the intentions of their employers. Some feel organizations are holding patient care over nurses’ heads while, in the background, pushing the business forward. The response is essentially: “We can’t be the only ones carrying the weight of our mission. If you expect us to be the only mission-driven people, we’ll go travel or organize and strike.” In addition, the employee-manager relationship is starting to ring hollow. Historically, a core argument against organizing is that a union only adds complexity, getting in the way of those direct conversations. But more and more nurses are feeling – or recognizing – that they don’t actually have that relationship and their voice isn’t valued. In that case, they’re not giving anything up by bringing in a third party.

There’s no easy fix for provider organizations. The solution is long term – doing the slow, hard work of engaging employees, giving them a real voice in conversations and training leadership to lead effectively. Before making any statement about valuing nurses’ input or taking any action to ostensibly boost engagement, ask whether the move represents a true, long-term commitment or is simply lip service, an attempt at a quick fix. Worried about organized labor? Give people a way to not need that third party.

Questions about employee engagement? We can help.

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Special Report: Payers and Providers Square Off

“They” can be a powerful weapon.

It can conjure the other side, the opponent, the adversary against whom “we” are fighting. That word is being bandied about between providers and payers in the escalating feud over the high cost of healthcare. And it suggests that behind closed doors, negotiations between those two parties are getting nastier as the cost of healthcare comes back into focus.

Case in point: “That doesn’t mean they’re not going to try to use this,” said USC healthcare professor Glenn Melnick earlier this year while suggesting hospitals are abusing COVID-19 relief funds. His apparent purpose was to assign blame and set providers as the adversary.

Scanning headlines, it’s obvious that the intense public spotlight pointed at hospitals pre-pandemic has returned (remember surprise billing and hospitals suing patients?). Talk of healthcare heroes is ebbing way, with chatter flowing about the evils of consolidation and health systems driving the cost of care while focusing on profits over patients. Hospitals are being framed as “Them.” Unfortunately, the newsworthy stories about poor billing practices, limited access or other non-consumer-friendly behaviors are self-inflicted wounds by specific hospitals that create opportunities for other actors to paint with a broad brush, undermine providers’ positions and cast doubt about their motivations.

Meanwhile, the insurance industry is working to remake its image from a poorly understood and disliked group to the torch-bearers for patient-centric care. “We.” “Us.” It’s even rebranded its trade association to “AHIP” and is using broader messaging to get away from the focus on insurance. All of this appears to be part of an orchestrated campaign, that’s quite frankly, a savvy PR move.

Delta Survey Says: People Are Angry, Patients Are Nervous

Orange text that reads "The Quick Think" over a kaleidoscope-patterned background

New Jarrard Inc. Poll: Six Insights into What Healthcare Consumers Are Thinking

(4-minute read)

As the Delta variant raged hot this week and hospitals began to curtail services, we asked 1,200 US adults about their thoughts and feelings about the pandemic*. Here’s what stood out:

  • Nearly three in 10 people say the current COVID-19 situation has them less likely to seek in-person care.
  • Telehealth is sounding better to many, with more than four in 10 saying today’s environment makes them more likely to go that route.
  • About half of those who aren’t vaccinated are dug in to their position. In fact, they’re so dug in that many of them say they’d leave their jobs rather than comply with an employer mandate.
  • Sixty percent of the people who are vaccinated harbor some ill will towards those who aren’t.

Several questions continue threads we’ve been pulling in our various consumer surveys over the past 16 months. In each, we want to understand people’s feelings of safety in different settings. (See findings from last April, August and this January.)

Here’s the latest healthcare consumer intelligence:

In-person care has some people nervous. We asked consumers if the current COVID-19 situation has changed the way they’ll seek non-emergency care – in person and via telehealth. Twenty-eight percent said they’re less likely to pursue in-person care. A smaller proportion is actually more likely to seek in-person care. (Yeah, we don’t get that either. Maybe they think wait times will be shorter?) But, the largest shift is in the wrong direction – a tough situation for providers who had a taste of returning volumes this year and now may be facing the need to scale back services due to the latest surge.

Does the current COVID-19 situation affect the likelihood you’ll seek non-emergency medical care in person?

Bar chart representing individuals' levels of comfort in-person

On the other hand, it looks like providers can expect an uptick in patients seeking remote appointments, as 44 percent said the current situation makes them more likely to pursue the virtual route. It’s a great reminder that telehealth needs to stay front and center. Marcom teams should play a strategic and tactical role here, helping shape public perceptions of safety, comfort, convenience and different options for care. It pays to keep patients abreast of any changes along the entire care process – from scheduling to arrival to checkout and billing.

People feel a bit safer in public places now vs. January and continue to feel safer in medical settings over other locations. We’ve been asking this question for the past year. Overall, people’s feelings of safety are up roughly one point from eight months ago, based on our 10-point scale with higher meaning safer. It’s something, but not a lot to bank on.

On a scale of one to 10, how safe do you feel going into…

Horizontal stacked bar graph representing individuals' feelings of safety

Vaccines and masks help allay fear. Many providers are already taking valuable safety approaches that their patients appreciate. But we wanted to dig deeper into respondents who are iffy about their feelings of safety in medical settings.

Asked what factors might help them feel better about in-person care (for non-emergencies), one of the top signals that cohort is looking for is a vaccine mandate.

We’re well-aware that many hospitals are struggling with the decision to implement mandates for employees. It’s a tough call. Still, in the public’s eye, mandates are vital to ensuring their comfort in your facility. Almost eight in 10 respondents in our January poll said that vaccinations should be required for healthcare workers – and this remains a consistent theme. So if you’ve got one in place, make sure you let the people know.

Other top factors in increasing feelings of safety were:

  • Isolation of infectious diseases in separate facilities
  • Masking requirements for everyone in the facility

Vaccine resistance is hard-baked for a small but notable percentage of respondents. Almost 70 percent of respondents said they were either fully or partially vaccinated, perfectly in line with CDC data out this week. We asked the remaining percentage about things that might help move them towards vaccination. For about four in 10 – or 13 percent of all respondents – the answer is, pretty much nothing. In fact, we asked if an employer mandate would increase their likelihood and phrased the options as “Yes – I’d do it to keep my job,” “No – I’d leave my job,” and “unsure.” Forty-six percent of the unvaccinated said they’d leave their job rather than comply with a mandate.

For providers, that unfortunate finding is a reminder to spend time and resources where you can make change happen, because there are corners of the community where you can’t.

Would you be more willing to receive a COVID-19 vaccine if…

Stacked bar graph representing what changed individuals' minds on getting the vaccine

Those who are vaccinated aren’t thrilled with those who didn’t get the jab. No surprise, our country is divided. Sixty percent of the vaccinated said they’ve become angrier at those who aren’t since news hit of the Delta variant surge. That anger extends to the medical community, including the doctors and nurses caring for those patients who made the choice – sometimes loudly – to avoid vaccination. Each day, these professionals see the accusations and misinformation. Then they come to work to deal with the avoidable consequences of it all.

Marcom leaders need to continue keeping open lines of communication with staff, keep support resources in place and simply be aware that it’s happening.

Have reports of the Delta variant changed your opinion of those who choose not to get vaccinated?

Bar graph with navy bar representing 51% "I'm more upset," orange bar representing 10% "Wasn't upset but am now," green bar representing 17% "I'm less upset," and light blue bar representing 23% "I'm not upset"

People think the worst is behind us…barely. On a brighter note, a slight plurality – 39 percent – said that they think we’re on the right side of this pandemic. Wishful thinking? TBD. Let’s hope they’re right.

Do you believe the worst of COVID-19 is behind or ahead of us?

Donut chart with green color representing 30% "unsure," orange color representing 39% "behind us," and navy color representing 31% "ahead of us"

*Online poll of US adults ages 25 and up, fielded Wednesday, August 4

Gender: 53% M / 47% F

Ethnicity: 67% white / 13% Black / 12% Latino/Hispanic / 4% Asian

This piece was originally published over the weekend in our Sunday newsletter. Fill out the form for full survey results.