Episode Transcript
[00:00:01] Speaker A: Well, the impact is maybe short term. When you look at it from a financial perspective, we say, oh my goodness. But I do think in the long term, when you look at the cost of turnover, you look at the cost of when employees are not satisfied, there is a huge financial impact. And sometimes it's really hard to quantify because it's not an immediate viewpoint. But if you look at when you root cause, a lot of things that happen financially, a lot of it has to do with your culture and your organization's approach to it.
[00:00:29] Speaker B: Hello, and welcome to the Alvarez and Marcel Healthcare industry group Human Capital and Workforce Management podcast. In this podcast series, we discuss the human capital perspective of the healthcare industry. I'm Bianca Briola, leader of the healthcare, human capital and workforce management practice. And today I'm joined by three amazing CFO's Michelle Gui, CFO of Kootenai Healthy, Sharon Rogers, CFO of Johns Hopkins All Children's Hospital, and my colleague, a serial interim CFO and a managing director in our healthcare practice, Erin Eichorn. We have a very unique mix of CFO's here, different types of markets, different types of organizations, different types of challenges and successes. So I'm very eager to kind of hear the comparison and the contrast of your perspectives. Today's topic is one that I'm particularly interested in. We've had such massive shortages, rapid inflation, high agency utilization, greater union activity, and it's really created this perfect storm of workforce related financial pressures in the hospital and health system environment. So this podcast is really dedicated to talking about anything, workforce and human capital. And I try to have guests that, that can look at these issues from a different perspective. And the CFO perspective is one that's incredibly interesting. Right. And that's why you're here. I think that one of the questions that now everyone has weighing on their minds is, has this perfect storm started to clear? Is this. I really hate this phrase, the new normal, because I, you know, what does that mean? Should we expect more instability? And I really would like for you all to kind of share your perspective. So let's start. Sharon, one of the questions I have at Johns Hopkins, all children's hospital, are you seeing some relief at all? I think that most organizations have seen such a rapid increase in workforce expense.
[00:02:33] Speaker C: Relief is such a difficult word. The expenses are continuing to increase significantly, but I would say we're seeing about 12% or more overall expense growth a few years ago. This year, it's up about 9%. So while it's not necessarily relief or from where it used to be, at least it's not continuing to increase at the same rate as what it was. So just given who we are on this podcast, again, I don't want to use the word relief, but at least it's not continuing to to climb at the same rate. And given the significance of the budgets that we're managing, these are very large numbers. I don't know that they really are going to ever. I don't think they'll ever return to what they used to be, but at least it's not, again climbing at the same rate.
[00:03:30] Speaker D: Sharon, it would be nice if you could get a 12% increase from your payers.
[00:03:36] Speaker B: Yes, I don't think that's how it works. Erin.
[00:03:39] Speaker C: Let me know who can help me with negotiating that. Aaron?
[00:03:43] Speaker B: Yeah, that's a different podcast. Michelle, how about you? Have you seen some relief in your overall workforce expense?
[00:03:51] Speaker A: Yes, we've actually been very fortunate. The height of the pandemic, especially for us, coming out of the pandemic in 2022 was the worst financial year for us that we've ever experienced. Historically. We've been here over 50 some years now. So what we've seen is that we've actually had agency labor cost reduction in the last year by 74%, which has been, there's been a lot of effort on HR transformation. We started that in 2022, and it's really proofed out. We've seen some reduction in salary costs as well. Overall, about 11% reduction. And overall labor expense, total labor expense, including physician salaries. So reduction about 6%. So we've been very blessed in all the efforts on reducing our labor costs. But I wouldn't, as Sharon said, I wouldn't necessarily say relief, because we do know that there is continued pressure on salary expenses and increasing salary rates as we are trying to remain competitive within our market and nationally. As we all know, nursing shortages continue to impact us nationally as well as here locally within Kootenai health. And so we anticipate that those costs will only increase. But if we're looking at it just from the terms of the height of the pandemic, then it's definitely decreased.
[00:05:10] Speaker B: You know, you bring up a really interesting conundrum that we have, right. So we're trying to maintain staff engagement, keep our turnover down as much as possible, make sure that our patients are engaged and satisfied and give people a living wage. Right. It's to stay competitive, and yet we have this ever growing increase in workforce expense. I'm really interested in your traveler story, Michelle, and my hope is that we can get down to it a little bit later in our conversation, but can we talk more as a group about specific incentive programs that you all may have implemented during the pandemic? And are they sticking around? What do they look like? If you were able to sunset them, how was that process? So, Erin, I'd like to start with you. Just because you have a broad stroke of many organizations, can you talk more generally about some of the incentive programs that were implemented and where they are now trend wise?
[00:06:15] Speaker D: Sure. I think the three big things that were incentive programs that were offered are the sign on bonuses slash three month bonuses. That's one category. Tuition reimbursement and the like would be a second category. And then the third for non clinical folks has been the ability to work from home or more flexible. I've seen ideas contemplated in ways that never seen before of administrative finance, HR, payroll, like showing up to the office once every other week or even less frequently. But what's been happening over, I'd say, over the last six months is a lot of those are going away. The flex work, many areas are asking people to show up at the office more often. Tuition bonuses are seen trending downward and the sign on bonuses shrinking and who gets them and how often they get them seems to be changing as well. So I would say it's sort of a return to pre Covid in areas not exactly pre Covid yet, but definitely heading in that direction.
[00:07:17] Speaker B: Sharon, have you had any changes in your program?
[00:07:20] Speaker C: We've maintained many of the programs that we implemented during the pandemic. Many of the programs that we put in place have been heavily utilized by our team members. We do look at the data to see which programs we are receiving a solid return on investment, from which ones are no longer being utilized. And obviously look at the affordability of the programs. Continue to evaluate that on an ongoing basis, but vast majority of the programs that we have implemented have been sustained to this point.
[00:07:58] Speaker B: That's interesting. Michelle, have you had that same experience given your traveler reduction journey? Have you had to maintain or increase incentives to your regular employees?
[00:08:09] Speaker A: We have continued to keep our incentive programs alive, so to speak, as we've continued to recruit and retain, especially retaining staff and recruitment has been such a key issue and focus for us as we've especially wanted to reduce our contract labor expense. And so we have not essentially curtailed a lot of the incentive programs that we put into place. We believe that we're concerned about curtailing it too soon would be, would have the opposite effect of continuing to recruit and fill positions.
[00:08:42] Speaker B: You know, when we work with our clients, we typically say instead of adjusting comp, focus on these incentive programs because comp you can't unwind. Right. Like comp creep is going to happen if you keep on incenting with comp your base pay rather. But if you have a lot of these types of programs, it's very easy to lose track of them. So Sharon, I'm really excited to hear that you're monitoring them very tightly and looking at return on investment. Cause we do have some clients kind of a runaway train and it's really hard to keep track of. Now we have flex time. Now we have double flex time. Now we have double flex time weekend. Now we have double flex time. Charge nurse. Right. It just becomes so challenging to really understand what's going on in the organization, even though the incentive program tends to be the best way, the safest way to improve your compensation program. So I'm surprised that for the most part, Michelle and Sharon, that you have these programs. But I understand why I think that it highly is dependent on your recruitment strategy and where you are in retaining your employees. So I would love to hear a little bit more about what are some of the primary drivers related to employee compensation. So Michelle, you kind of alluded to you struggled getting nurses in the past, but that's been a little bit better. Now, what is kind of the current state that's driving your incentive program?
[00:10:09] Speaker A: Essentially we are, we're non union, which we're very proud of, but we do our market competitiveness and our market really is with a union, with organizations that have unions. And so we have to make sure that we're in line with, from a comp perspective with the unions and the union agreement, say, at the surrounding facilities in our market. So while we are in North Idaho, our market is eastern Washington and the comp rates are much higher in eastern Washington. So we do, we do ensure that we're staying at market rate between 95% to 98% of the market of eastern Washington. And so that's the factors that we want to make sure that we're able to attract talent. You know, we're a smaller town, about 70,000 people, but we're literally 20 minutes from Spokane. And so we have to make sure we're providing competent market rates for our employees.
[00:11:05] Speaker B: Sharon, you have a little bit of a different situation because is it more challenging to get peed specific staff?
[00:11:12] Speaker C: It can be more challenging. Similar to Michelle, data is really important for us to make sure we're approaching our decisions strategically. So like most organizations, we're also using market data to help inform our compensation. We're impacted both by national trends, things like shortages in respiratory therapy, that's impacting the entire industry. Well, for us, it can be even more difficult because it's not just overall respiratory therapists, but we need pediatric respiratory therapists. So it can get even more nuanced when you're looking for the pediatric version of the field that you are recruiting for. So our partnerships with the local schools become even more critical, and how we are developing and enhancing those partnerships becomes really important. And we have expanded upon those partnerships. So that has helped, and that's really helped us significantly. Another thing that has played a role is really just understanding from our employees what are the things that are important to them that helps influence compensation. So we survey pretty frequently, and we look at the results of our employee engagement survey. And because compensation can be influenced by benefits and other services, we get feedback from our team members. And that's really been helpful in understanding what other additional programs are having an influence on people's feelings about their compensation. So we'll use that survey data as a starting point for further kind of drilling down with our team members about compensation and then looking at things like retention and turnover in specific areas.
[00:13:06] Speaker D: Sharon, I find that fascinating. So the use of surveys to guide decisions, which I'm sure Michelle does that as well. So maybe this question back to Michelle, do you find the use of surveys to be helpful in making these kinds of determinations? Does Kootenai do surveys, are there differences maybe in how people respond? Maybe there's a question for Bianca, then talk about the interviewees turning around the questions. Do you find the difference in how people respond to surveys in a place like Florida versus Idaho?
[00:13:37] Speaker A: I can certainly respond for Kootenai, we absolutely use surveys as well. As Sharon mentioned, it's a key part of our ability to make sure that we're meeting the demands or the requests of what the employees are looking for as part of our comp model and employee satisfaction specifically. So we do regularly do pulse surveys to our employees and that actually we did a pretty large benefit survey last, at the end of last year, which informed our benefits package for our budget for this year. And so we do take into account the survey results and what employees are looking for, and in some cases they have been favorable to the employee, but not necessarily favorable financially for the organization. And that's one of the benefits that we implemented, which is the sick bank has had an interesting effect on our financials this year. So we're looking at that and monitoring how that's actually playing out.
[00:14:34] Speaker B: It's actually a really good segue into employee benefits overall, because I want to dig a little bit deeper, Michelle, into what you just said. What types of things are we hearing from employees through our one on ones rounding these surveys? Like, what is it that they want? I'm really interested, and we did a podcast, I think it was about a year ago, where we learned there were some generational differences, and there's significant shifts now. So less emphasis on retirement benefits, more emphasis on things like, I don't know, child care, pet insurance. These types of things are more valued. So, Michelle and Sharon, maybe, Sharon, you first. What are the things that they're asking for that you're having to make an investment in?
[00:15:17] Speaker C: Well, certainly our pet insurance is popular. We also instituted a new benefit with pediatric. It's a 24/7 telehealth, pediatric service benefit. So it's just an easier way to get telehealth care 24/7 for your, for your children. We've seen increased use of our tuition reimbursement programs. I think we have 150 more people who are using that now than who previously used it. You know, we've seen a mix in terms of people wanting to be on campus and work versus people wanting to be remote. I would say that varies. Overall, people are asking for more flexibility in terms of their work location. The desire for flexibility, I would say, is consistent. So it really varies. I think people want, they want the choice. They want choices, and then they want to be able to pick what they want versus just having their employer say, here are the things that you get. They kind of, it seems people want more of the menu, and then they want to be able to select the items that make sense for their lives.
[00:16:32] Speaker B: Yeah, it seems like we're back to the cafeteria plan of, you know, 20 years ago, 30 years ago. Things have come full circle. Michelle, is there anything else unique from what you're hearing from your employees?
[00:16:46] Speaker A: Many of the same things, but I think the biggest one, the two biggest ones were the cost of benefits, not passing on cost of benefits. And so that was one of the big things that came out where they wanted to have a reduction in benefit costs, which costs are increasing. So it has been difficult, but that we are having to report that we did not increase the cost of benefits to our employees for four years, years in a row, which they were very happy about. And then the other one is, we talked about the flexible schedules we have seen as well with the remote and wanting to be able to have the cafeteria planned, but ultimately they are looking for more part time. You know, we used to always, we went through that swing of moving away from part time to really ensuring that we have full time employees to maximize benefit expense. But that has changed where everybody really wants either part time or PRN work and they're not as committed to wanting to have full time work. Which is rather interesting that we found.
[00:17:45] Speaker B: Yeah, all this sounds really expensive though, don't you think, Aaron?
It seems like benefit expense is going up.
[00:17:53] Speaker D: Yeah, I think benefits expense being driven. What I'm seeing is two key areas. It's. One is the, I think the out of network utilization on the health benefits side, where the large integrated systems which offer a full array of services are able to drive by steering and by tiering the employees to utilize the health system for all their care. And I totally agree with what Michelle was saying. Cost of benefits is a huge topic for employees. If you're able to hold that for four years straight, that's incredible. That's a big win for employees. And one of the ways employers can do that is by driving utilization to be within the health system. But that becomes complicated. What if I'm only a pediatric system? I don't offer adult care. I only have adult care. I don't have pediatric care, I don't have subspecialty care. So that then informs strategy. Once you have 45, 10, 20,000 employees, it becomes important to design the health system in a way that can attract the employees for their own care and therefore you can save. You know, there's a huge opportunity for financial savings. The second is no different than the rest of the country's pharmacy costs. I mean, increased costs are being obviously borne by the employers and those that have access to 340 b. It's certainly an opportunity to drive that cost down. But again, it involves the employees seeking care. The other things. I totally agree with what Sharon and Michelle are saying. It's the same struggles everywhere. People want the cafeteria plan, the remote benefits, PRN and employment. It almost depends on the market and depends on the.
Every couple of years seems to shift.
[00:19:32] Speaker B: So one of my questions that I have for CFO's, do you feel like you're really getting the value now out of your benefits? So are you seeing these programs on well being and other health benefits are reducing turnover, increasing satisfaction? Or is it become like table stakes, cost of doing business and you have to do other things in order to keep employees engaged?
[00:19:57] Speaker C: I'll say overall, our employee engagement is continuing to increase and we were very proud of that. Our retention is continuing to increase. We are very proud of that.
All of the measures that we track, we're just very proud of our outcomes, our results, across just about everything that we track, we're proud. Our culture of our team members, the stories that we have of our patients, it's just extremely overwhelming. And so that's really hard to. It is really hard to quantify. And I know we're CFO's, so we are good at quantifying a number to where's the value? Right. So, you know, there are some things that we can look at to say, okay, are we really getting the value out of this one specific program or not? And there is a place in time to do that. Overall, when we look at retention rates, when we look at engagement rates, when we look at just the culture, do people feel like this is a good place to work? Those things being yes, and it's positive, then that is a good thing. So are there going to be things that you want to look at to say, are there opportunities to reduce expense? Yes, there will always be those items that you want to look at. The what can you do to reduce some expense? Continue to, you know, look at those things. But we just want to do that in a smart way so that we're not, you know, removing programs that are meaningful to people. And so we just want to make sure as we're doing that, we're looking at the data and taking away programs that employees are finding value in.
[00:21:48] Speaker B: Agreed. Unless it's a dire circumstance. And Erin, you're familiar with this, sometimes you have to cut programs that can be pretty impactful.
[00:21:57] Speaker D: I actually have a contrarian view on this.
[00:22:00] Speaker B: Oh, okay.
[00:22:01] Speaker D: Coming from a CFO perspective where I know Michelle, Sharon and I would all look at the numbers like Sharon mentioned, engagement rates and retention rates and turnover rates. I've also worked with Sharon at Eskenazi, where Sharon was the CFO there, and it's been named one of the top 100 or 150 best places to work for many years in a row. And I'm sure Sharon's putting that culture in place and I don't know at all. Children's, the vibe in the hallways. A place like Eskenazi and all children's is different than some of the other clients I have at a and M which have gotten to stages of distress. And when programs get cut, it's just a different way that it gets communicated and implemented in an Escanazi type of environment versus some of the other clients that some other clients that I've had. So sure it's all about the numbers and the first one to be about the numbers. But there's an element of this, Bianca, which you can't quantify. When people enjoy working somewhere, what that delivers for the system, what value that provides and how engaged they are, it's not necessarily quantifiable. Michelle, curious to your thoughts on that.
[00:23:10] Speaker A: I completely agree. I think that how you communicate to employees and providers and, you know, your broader community has material impact in how they perceive or receive that information. So I think that being open about the why is super important and creates trust, especially when you give them all the information. Sometimes it's hard to give them all the information because we, some things we need to keep close to our chest for very good reasons. But ultimately, if we engage with the employees and they are happy about the environment they work in, they're willing to do a lot of things and make a lot of sacrifices for the organization they work with.
[00:23:50] Speaker B: I must have a fever because I can't believe I just heard three CFO's talk about how culture matters, even if there isn't financial value to it. But that's a testament to the three CFO's that we have on the panel. I think that you all are very special leaders and that you see the benefit of these investments even though it doesn't necessarily hit the black and white on paper. So thanks for this perspective. I'm really encouraging to see.
[00:24:15] Speaker A: Bianca, it will go black and white on paper. I mean, I will tell you in the long run, while we, we don't, well, the impact is maybe short term. When you look at it from a financial perspective, we say, oh my goodness. But I do think in the long term, when you look at the cost of turnover, you look at the cost of when employees are not satisfied, there is a huge financial impact. And as Erin said, sometimes it's really hard to quantify because it's not an immediate viewpoint. But if you look at when you root cause a lot of things that happen financially, a lot of it has to do with your culture and your organization's approach to it.
[00:24:50] Speaker B: Okay, I understand.
So it really is about the long term impact then. So before we move on to travelers, because Michelle, you have an interesting traveler story. And Sharon, I want to talk about the traveler journey with you all as well. But can we talk a little bit more about PTO? Michelle, you mentioned something about time off and a lot of my corporate clients, healthcare corporate clients, they've moved to discretionary or unlimited PTO. I say unlimited with quotation marks, air quotes because all the research says that when you move to this discretionary or unlimited GTO program, paid time off program, it really results in employees using less time off because there isn't this sense of urgency. I have to use my bank. I have to use it or I lose it. Right. So people tend to use less time off. It's more challenging with shift workers, and right now in hospitals, it's a lot of shift workers. Have you changed your PTO policy, Michelle? Is that what you were alluding to?
[00:25:48] Speaker A: We didn't change our PTO policy, actually, we don't have the unlimited PTO plan. We've actually did a lot of analysis and surveys around that and we decided not to move in that direction. And there are many things we can go down the path of why that is. But what change we did make was the access to the PTO bank. So we have a long term sick bank and we also have a PTO bank. And so in order to access the long term sick bank, you had to use a certain amount of PTO first. And what we changed was that you didn't have to dip into your PTO bank. This was a huge, when we did the benefits survey last year, this was one of the number one thing that employees were really concerned about accessing their sick bank versus their PTO. And so we made a change and the employees have reported they're much more satisfied. But it's really a matter of, from a finance perspective, the balance sheet impact of the PTO versus the income statement. So that's been the change and shift from a financial perspective versus the employees experience, which has been a huge success and happier employees that they can access this bank earlier. But there is an impact between the balance sheet and the income tax.
[00:27:05] Speaker B: I can see how that could be impactful, but a huge satisfier. Right. And in the end, it may not be that big of a financial impact long term.
[00:27:13] Speaker A: No, it should work itself out and stabilize over time. Just the initial impact of the change.
[00:27:19] Speaker B: Right. But it's satisfying.
Okay, so let's move to a hot topic. So travelers. Travelers. Travelers. The healthcare industry saw traveler utilization just surge during the peak of our staffing shortages. We've recovered from that and I believe this podcast, we've covered this particular topic many times, but it's been a while and I want to check in, in the market and see what's going on with some loosening of the labor market, have you been able to realize some proportionate reductions in contract labor? And I say this with an asterisk because I'm a firm believer in a little bit of contract use is actually a good thing just because you need to maintain those relationships and keep line of communication in case there is another event and you can get access to those resources pretty quickly. But having spurious travelers or more travelers than you really need is obviously not a solution long term. So I'm really interested, Michelle. When I was at Kootenai, this was right before your time. I think Kootenay had a huge surge of traveler expense and now it sounds like that's not the case. And you've been able to almost transform the composition of the workers at Kootenai. Can you tell us a little bit about your journey and where you're at right now?
[00:28:38] Speaker A: Yes, absolutely. So when we started this journey, we didn't shut any services during the pandemic. We actually added more travelers to be able to take care of the patients that were coming in and that increased our cost exponentially. And so we realized that that was one of the biggest reasons we actually missed our financials in the year. Our revenues were increasing, obviously from the volumes we were able to have with the patients coming in, but our expenses were outpacing our revenue streams. So there was a lot of work. We had approximately 1000 employee turn. So we think about that. That's a fourth of your organization that has a turnover within a year with the great resignation, the pandemic, just a whole bunch of things. So it was very difficult for us and we knew that we needed to reduce our traveler expense very rapidly. And we've had many work streams about HR culture, engaging the rest of the leadership team and staff in helping to drive HR practices and improving HR practices. Time to hire. All of these things that have really, I mean, there's a whole presentation I can provide, but a lot of different initiatives on HR transformation and that has been the reason for our success. Without that work for the better part of a year and a half, we would not have experienced this. We saw a change in culture, we saw a change in process and just how we source candidates, how quickly we get them on board. Within seven days, we have time to hire from the time of posting to actually onboarding staff. So we've done a lot of work and our organization has been very focused on ensuring that we're recruiting and then also retaining staff.
[00:30:19] Speaker B: So I just, I need you to repeat something. What is your time to hire?
[00:30:24] Speaker A: Seven days.
[00:30:25] Speaker B: Oh my gosh. And that's from posting to like sign on the dotted line.
[00:30:30] Speaker A: That's posting to sign on the dotted line.
[00:30:33] Speaker B: Oh my that is phenomenal. I think we're going to get calls just about that. Wanting to know what you all did to reimagine the talent acquisition engine. That's just fantastic. Congratulations on that. It's a very different organization. I know that your workforce expense related to travelers was so significant.
To be able to turn that completely around is a huge accomplishment.
[00:30:56] Speaker D: Well, Sharon, Michelle, Michelle, just to, that's really phenomenal. Does talent acquisition actually have a pool of people ready before job even posts?
[00:31:06] Speaker A: So we have a talent acquisition team and we haven't actually increased, we haven't up staffed in the talent acquisition. What we did is we changed the process and we revamped completely reimagined the process and it's, before there were a lot of barriers on why we couldn't hire right away or what the, the hoops you have to go through. And we just said, okay, no barriers. What is it going to look like without any barriers? And then identifying the barriers in that process of seven, that was our goal was seven days from time to posting to actual signing the offer letter. And we just worked backwards on all of the issues in that process and we made it work. So, and expectations from leadership in terms of when they get something in notification, they have to get right on it and they have to interview the candidate within a day and schedule the candidate and interview within a day. So it's changed our way of looking at recruiting staff and that's a top priority for us.
[00:32:09] Speaker D: Do you have some pediatric respiratory therapist that you can send to Tampa?
[00:32:14] Speaker A: Yes. Well, there are some things that are.
[00:32:16] Speaker B: Really hard to, Sharon's looking, Sharon is looking. Well, just to finish the note about travelers, because, Sharon, you didn't have a lot of travelers from what I remember, and it seems like you have even fewer now. What were some of your strategies to get down to where you think is appropriate? Traveler utilization?
[00:32:36] Speaker C: Well, I am really proud of our transformation and Michelle, I might be one of those people calling you afterward to hear about your success. We actually, we're really proud of what we have accomplished. At our peak, we had 92 agency rns and so that was approaching over. It was almost 20% of our, of our team. And within a year we reduced that to less than ten. Today we have less than five travelers. And so we've been able to hire and retain our own for over a year. And so I'm really proud of the results that we've had. We were spending over two and a half million dollars a month. And now, and this is with all travelers, not just nursing now it's less than 400,000. We've had some really good results in nursing. Specifically, we increased our number of cohorts where we were training. We were able to double that number, and there were a lot of improvements that were made, I would say. I think the main thing that I like to highlight with our nursing team, their ability to both recruit and retain. They were ready to retain because the culture was good. We had to make a significant market correction. Kind of going back to one of the prior questions that you asked Bianca about looking at the data. We made a significant market correction, and. But making a market correction can only get you so far. Lots of organizations do that, but we've been able to retain the team member since doing that because we had a very healthy culture, and that doesn't just exist within nursing. That takes a healthy culture throughout the entire organization. So that's having very strong physician and nursing and all of the team members that interact together, having good relationships that exist throughout. And so we're proud of what we've been able to accomplish. And actually, yes. Next on the list is some plans around being. To being able to make some improvements around our respiratory therapy area.
[00:34:54] Speaker B: We'll make this your first recruitment advertisement for pediatric respiratory therapists.
[00:35:00] Speaker C: Yes, Erin.
[00:35:02] Speaker B: So you have an opportunity to work with several organizations that just had very high traveler expense, and it sounds like you implemented a little bit of a strategy to help them manage that expense retroactively. Can you tell us a little bit about that?
[00:35:17] Speaker D: Sure. So as the dust settled post pandemic, we had a number of clients who, larger clients who were spending two $300 million a year on contract labor. And in the chaotic months and really more than a year of the pandemic, we found that certain clients were overbilled or other mistakes happened with regard to the invoicing of those contract labor services. And we've been conducting an audit, a sample audit of those invoices, to see if there's opportunities. And we found not in everyone, some there, I would say in probably 70 30, 70% of the places that we've conducted these sample audits had opportunity, some of them small, some of them as large as 12%. So 12% of their spend was in error and being resolved through lawsuits and mediation and arbitration. The issues that we found are, in certain circumstances, we were billed for nurses who actually weren't there. They never showed up. There was a debate over a line in the contract with guaranteed hours means, we found, over billing. So nurses who were clocked into Kronos or whatever the timekeeping system was for 10 hours, and on the bill it said 20 hours. And again, I attribute this more to the chaos that was going on during the pandemic and the pop up nature of the contract labor agencies. So some of the more established ones didn't have this issue at all. It's more the newer ones that all of a sudden found themselves in this opportunity where there's, they're sourcing 1000 nurses. They never did that kind of volume in their life. And they're keeping track of this Excel spreadsheets and paper and submitting invoices. And mistakes happen, as we all know, in excel, you know, fat fingering and the like, things happen. But it also exposed in certain cases, poor practices and procedures, just controls that, you know, CFO Sharon and Michelle are used to and I'm used to in the industry. Just like everything has to have a control, you have to. How do you check it? And here there are nurses that came in and out and just not checked, not, didn't have the proper sign offs by CNO's coos and the like, and just the significant opportunities. So like I said, we've seen some significant recoveries and there are places that we've done some work where they're actually, they do what's we, we came up with a term called reverse billing, which actually is that the, the hospital system would tell the agency how many hours they expect the bill to be based on their own time keeping system, which I think actually think is the best way to do it. That's a really good control to have in place. Should be based on the entity's own timekeeping records.
[00:38:00] Speaker B: So it's not too late to check your invoices, I guess, and maybe find some additional dollars there. We've also talked to some clients who've been able to recover by getting some sort of rebate just because of volume. So it's not just price at the pump. So another opportunity to reduce overall workforce expense.
So we have a few more minutes left, and this is our rapid fire. Now we'll go. Michelle, Sharon and Erin, I want you to look into your crystal ball. This is my favorite part of our podcast. Look into your crystal ball and let the clouds kind of part. What is it that you see in the future for our industry, specific to workforce expense or in general? Love to hear your perspective there. So again, rapid fire. Michelle, what does the future hold for us? What do you think?
[00:38:51] Speaker A: Well, I usually tend to be quite optimistic, and I'm still optimistic, but I don't think that the challenges around a workforce, expenses are going away anytime soon. I think we all know nationally that the workforce is shrinking, not only just in nursing, but in other areas, ancillary services and the like, and that minimum wages are increasing as well in different states. So I do think that we're going to continue to have challenges and upward pressures on our salary expense and labor expense overall.
[00:39:23] Speaker B: Okay, not so optimistic, but you said it with an upbeat tone that helps.
Sharon, how about you? What is in your crystal ball?
[00:39:32] Speaker C: I think we've gotten through some of the challenging times. I believe our team members are wanting, maybe in some ways expecting us to bring back some of the fun and personalization and wanting some of the connectedness, but it's not necessarily in the way that it was done in the past. So I think we're going to be challenged with figuring out what the future looks like and really tapping into our team members to tell us, to help inform us, and to help create what does connectedness look like in the future? And we're going to have to be open to new ways of figuring that out. And I don't at all believe it's going to be a one size fits all approach. It's going to be many ways, fits many people, and I believe it's going to take us some years to figure that out. And I think we're going to see engagement take on some different forms in the next couple of years.
[00:40:33] Speaker B: I 100% agree with you, Sharon. I think that we have a new set of generation of workers that have a different idea of what it is to work, to what a workplace is, what a boss is, and we still need to learn. I think that they haven't settled yet on what it is. So we have to flex to that time for sure. Erin, how about you? Last thing, crystal ball. What does it look like? Is it murky? Is it positive?
[00:41:02] Speaker D: Oh, I think, well, change. So I totally agree with Sharon's point. And Bianca, you'll know the stats on the percentage of the baby boomers that are aging. In general, the nursing workforce is aging. So I think engagement for a younger workforce is going to look different than it's looked in the past. So that's for sure. Agree with that. Two things, crystal ball. I would tell you technology is going to change in both in the clinical world and the non clinical. Clinical. The remote, as an example, is the remote monitoring. There's going to be technological advances which are going to change the skill sets that we need. Instead of being someone who does XYZ might be how to monitor feeds of 1000 patients and understand what needs to be done. And then on the administrative side, the use in scanning. We've all seen improvements in our accounting and finance shops of scanning and OCR and other technologies for payables. There's just less. There's less of a need for human touch and that's going to be an impact. And then I think there's a policy change that's brewing. It's already starting to take effect. But three areas that come to mind when you ask me on the spot, I would say increased usage of crnas versus anesthesiologists, physician assistants versus doctors, lpns versus rns. I think expanding people's licenses and giving more discretion for certain types of errors is going to have to be deployed. Primary care shortage, I think, are things that everybody knows about, but just in the way it's used. Emergency room throughput, our areas where we're going to see policy changes.
[00:42:37] Speaker A: Agreed.
[00:42:37] Speaker B: I think that pharmacy is an area focus for scope of practice too. We're going to see pharmacists and pharmacy techs being able to do more and different things depending on the state. So all very insightful. Thank you to my CFO's. Great conversation. I loved all of your strategies and I don't doubt that some of our listeners are going to be reaching out, wanting to know all your details. So thank you. Thank you. Thank you for being so wonderful.
