Becker's Clinical Quality & Infection Control

11 PATIENT & CAREGIVER EXPERIENCE Noncompete ban complicates hospital staffing issues: Fitch By Alan Condon T he Federal Trade Commission's final rule banning noncompete clauses could hit nonprofit hospitals with more staffing complications at a time when they are still adapting to the upward reset of wages and have only begun to rein in labor costs, according to a May 2 report by Fitch Ratings. e FTC said in its rule that nonprofit organizations are not "categorically beyond" its jurisdiction and that it assesses whether an entity or its members derive a profit. Employees of a physician group that work a nonprofit hospital would fall under the commission's jurisdiction and would be subject to the noncompete ban, according to the FTC. e elimination of noncompetes complicates an already challenging labor environment for nonprofit hospitals. "One potential benefit is the improvement in labor supply and enhancement of the labor and physician recruiting pool. On the other hand, the rule could place further upward pressure on wages and potentially introduce operating volatility if there were increased healthcare staff turnover," Fitch said in a May 2 report. "is may be especially true for smaller or rural [nonprofit] hospitals, which may struggle to keep staffing at adequate service levels without ramping up costs. No immediate rating impact is expected, and the effects of the FTC rule, if upheld in court, would not be felt until 2025." Combined with other developments — such as California's minimum wage laws, state minimum nurse staffing ratio requirements and increased federal and state scrutiny of hospital M&As — the rule could maintain pressure on the hospital sector. e American Medical Association estimates that between 35% and 45% of physicians are bound by noncompete clauses. While staffing shortages and the use of contract labor for most health systems has dropped from the peaks of 2022, most hospitals continue to be challenged by staffing shortages, according to Fitch. Job openings remain high at 7.8% as of February compared with the 4.2% average rate from 2010 to 2019. Nonprofit hospitals have tempered wage growth while growing payrolls. As of March, hospital payrolls have increased for 27 successive months, resulting in payrolls that are 5.3% above the levels immediately prior to the pandemic, compared with 4.2% for the broader private sector, according to Fitch. "Healthcare providers' success in attracting and retaining permanent staff is key to reducing expenses and improving operating margins. A look at [nonprofit] hospital performance medians for hospitals with a FYE in 1H23 showed personnel costs slightly decreased to 55.4% of total operating revenues from 55.7% for the same cohort a year prior," according to Fitch. "We expect this metric to improve further in our full year FY 2023 medians, reflecting improvement in labor supply." e rule would go into effect 120 days following publication in the Federal Register on April 30, but lawsuits challenging the noncompete ban have already begun to roll in and implementation is likely to be delayed as it is litigated. n AdventHealth's strategy to lower staff turnover By Laura Dyrda T erry Shaw, president and CEO of Altamonte Springs, Fla.-based AdventHealth, has been focused on replenishing the system's workforce and leadership pipeline over the last few years. "Workforce retention continues to challenge our industry, which is why we continue to be relentlessly focused on team member retention and recruitment," he told Becker's. The health system, which has 95,000 team members, has a multi-pronged strategy for upskilling and training the workforce. AdventHealth developed the Leadership Institute to instill the system's values while training up the next generation of leaders. AdventHealth has made particular progress with reducing nurse turnover under the leadership of Trish Celano, MSN, RN, senior vice president and associate chief clinical officer and chief nursing officer. Her philosophy of "use less, lose less, hire more" helped the system drop nurse turnover from 31% to 18.9%. The strategy aims to support registered nurses to work at the top of their license through team models and bringing on more licensed practical nurses and patient care techs to deploy team-based care models. The system also launched nursing clinical ladders systemwide, and strengthened relationships with around 100 schools to bring in their recent graduates. In addition to the Leadership Institute, Mr. Shaw said AdventHealth offers education assistance, clinical ladder initiatives and opportunities to grow the talent pool through AdventHealth University and partnerships with post-secondary institutions. The health system is also refining benefits and compensation to stay competitive. The results? "We're seeing our workforce turnover rates continue to decrease and top decile performance in employee engagement," said Mr. Shaw. n

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