Becker's Hospital Review

15 CMO / CARE DELIVERY then the cost will be passed on as higher prices for patients. If higher salaries occur only in unionized hospitals, those hospitals will become less competitive with non- unionized hospitals in their market that may offer more competitive prices. "is is really about markets and the cards a hospital holds," Dr. Bai said. ough higher labor costs are expected to trickle down on some level to consumers in the coming years, those increases will not necessarily correlate directly to higher care costs. "Historically, we haven't seen a direct correlation between healthcare labor costs and increases to consumers," Tim Nanof, vice president of government affairs and policy at the American Nurses Association, told Becker's. "When an input to the methodology of payment and cost increases, it could have an impact on the system, but it isn't a direct correlation. "If nursing labor costs increased by, let's say 11%, that doesn't necessarily correlate to an 11% increase in costs to consumers at the hospital, and it certainly also doesn't mean that Medicare or private insurers or others are going to pay an additional amount either for the cost of care that's there." Union activity in healthcare in 2023 was oen about much more than pay, especially for nurses. Workplace safety, staffing levels and other work environment issues are also key drivers emboldening nurses to demand more from their employers. "If we can improve the work environment, it might be a way to stabilize labor costs as well," Mr. Nanof said. Managing cost shis Rising care costs as a result of higher labor costs will ultimately depend on a health system's ability to manage all of its expenses effectively. Rather than faulting nurses and other clinicians for the rising cost of care, leaders should focus on improving efficiency across their organizations to mitigate the level of increase that gets passed down, former system executives and nurse union leaders say. "It's laughable to talk about rising consumer prices as a result of a nurse getting a raise," Renée Saldaña, a spokesperson for SEIU- UHW, told Becker's. "Hospitals could be reinvesting into their workforce without making cuts elsewhere or raising premiums through payers." Costs could go up significantly, but "that's assuming you're not doing anything else" to reduce them, Mr. Klasko said. When it comes to cost control, now is the time for health systems to look carefully at where to integrate or consolidate, reassess return on investment on different programs that show up on profit and loss statements, and consider ways to repurpose brick-and- mortar facilities as more care moves outside hospital walls. "To make up for higher labor costs, hospitals oen try to shed services that aren't making a lot of money and refocus on the ones that are," which organizations should be careful in doing so as not to create access barriers for patients within their communities, John Silver, PhD, RN, a healthcare policy expert, told Becker's. Managing these factors successfully will require leaders to get comfortable acknowledging that inefficiencies — perhaps many of them — exist within their organizations. "e easy thing is to blame the nurses and the unions" — a position that absolves organizations from taking accountability and strategic action, Mr. Klasko said. "e smart health systems will look and say, 'By definition, we are an inefficient organization, so how can we still provide quality care and make some of those appropriate cost shiing [decisions] that aren't going to affect quality and aren't going to affect burnout?" Public sentiment is generally in nurses' favor when it comes to higher pay. Among Democrats and Republicans, 59% believe nurses are underpaid, while only 11% say the same about physicians. Such findings suggest consumers may have some level of tolerability for a bump in healthcare costs, if they had information and resources to clearly lay out if and how they are picking up the tab for hospitals' cost shiing. Getting to a place where consumers can truly "shop" and make more cost-effective decisions on where to seek care will require more clarity on why there are cost differentiations between one facility and another, and how nurse staffing and quality fit into the equation. "at level of transparency is important from both a quality as well as a cost perspective," Mr. Nanof said. Higher nursing labor costs may also be offset through enhanced efficiency and patient outcomes, studies suggest. Research has linked higher RN staffing levels with stronger hospital financial performance in more competitive markets. Staffing models and technology Moving forward, having everyone in the healthcare delivery ecosystem working at the top of their license will become increasingly important in improving nurse satisfaction and maximizing efficiency. Right now, there are sporadic examples of health systems embracing models that incorporate more licensed practical nurses and patient care techs to elevate bedside RNs, for example, though it is not yet a standard. "It's important to have healthcare staff operating at their highest level of capacity to get that really good value to the healthcare consumer, and to the hospital system and employer," Mr. Nanof said. "at means allowing nurse practitioners and RNs to do everything that is within their scope of practice, and be focusing really at the top of that so that at each level, you're getting the maximum amount of value for those professionals." A few years ahead, there will not be a world in which hospital and health systems' strategies to maximize efficiency within staffing models and manage costs leave out technology, Mr. Klasko said. In his work at General Catalyst, he sees many advancements worth being optimistic about, including collaborative robots and artificial intelligence models that can support front-line clinicians with tasks that fall below what they are licensed to do, such as follow-up calls with patients. "e ability to make 100 calls an hour to seniors to see how they're doing has a transformative opportunity where nurses can then be doing more" of what they're licensed to do, he said. "e more that you can employ these collaborative robots or superstaff AI, we can have a rediscussion around 'what is the right staffing model,'" Mr. Klasko said. "Because then what [nurses can be focused on] is really just directly taking care of patients. at, I think, will create different numbers, happier nurses, and will end up being less expensive. To me, that's the optimistic piece." n

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