Help Wanted, Desperately

Across the country, hospitals are closing units—and even shuttering completely—because they simply don’t have enough employees.

The COVID-19 pandemic drove record numbers of staff out of the healthcare industry and stretched hospital finances to the bone. But even as providers have begun to right themselves post-pandemic, hundreds of U.S. healthcare organizations continue to suffer personnel shortages.

The Rocky Mountain Regional VA Medical Center in Aurora, Colorado, stopped performing heart surgeries for more than a year in 2022-2023 because it didn’t have enough staff to care for those post-operative patients. Michigan’s Trinity Health Muskegon Hospital temporarily closed a 30-bed surgical floor in 2023 due to physician shortages. And Thomasville Regional Medical Center, a small hospital in rural Alabama, said staffing shortages in September forced what could be a permanent closure.

Maternity care units are at most risk of closure, due to lack of doctors and nurses. Between 2011 and 2023, 217 hospitals ended maternity services in rural areas, according to a report from healthcare consulting firm Chartis. Emergency departments, home health services, and hospice facilities are also shuttering or suspending care, particularly in rural areas. The primary culprits are pandemic-induced financial pressures and the inability to keep these units properly staffed.

The industry has for years predicted looming staffing shortages of hundreds of thousands of providers. In March 2024, the Association of American Medical Colleges (AAMC) projected a shortage of up to 86,000 physicians by 2036. The federal Health Resources and Services Administration (HRSA) in March projected a shortage of 337,970 registered nurses and 99,070 licensed practical nurses by 2036.

Contributors to this crisis include a greater amount of care needed for aging baby boomers, a pipeline of doctors and nurses that is too small to meet demand, and pandemic-related burnout, particularly among nurses. Low wages and poorer working conditions have also long been challenges among healthcare aides and sectors that rely on lower-wage workers like nursing homes and home healthcare.

This situation won’t be felt equally around the United States—some regions may actually find themselves with a glut of healthcare workers.

But even today, in most places, all kinds of medical organizations are short-staffed. And that portends reduced quality of care and increasing costs for an already stressed U.S. healthcare system.

The Shape of Healthcare to Come

Varying models are used to tally the potential workforce shortage and there’s no exact science to determine supply and demand over the next decade. For this reason, industry organizations provide broad ranges for their numerical predictions. The AAMC projects a shortage of 20,200 to 40,400 primary-care physicians by 2036, along with need for 10,100 to 19,900 additional surgeons and 1,300 to 4,900 hospitalists.

Rural areas will be hit hardest. But this is already being seen in many parts of the country. Today, according to HRSA, 65% of designated “health professional shortage areas” are rural, where it is notoriously difficult to recruit and retain healthcare workers. These smaller hospitals may have limited resources, isolated or rural communities may be less attractive to some of the workforce, and, for physicians with families, schools and employment options for spouses may be less than optimal.

Rural communities aren’t the only ones in need of help.

Dr. Vernon Lin, a physical medicine and rehabilitation specialist at the Hershel “Woody” Williams VA Medical Center in West Virginia, has been studying healthcare provider shortages for 20 years. He began researching healthcare staffing shortages because of concern for who would provide care for the aging baby boomer population—among whom he counted himself—as its health needs grew. At the time, he was working in California, which couldn’t produce enough nurses to meet demand. He noticed that hospitals in his area depended heavily on travel nurses from elsewhere in the United States and other countries.

“I knew that when the boomers hit retirement and beyond there would be a big problem,” he said.

In a study that he co-authored in 2020, Lin estimated a deficit of nearly 140,000 physicians by 2030. The West will experience the greatest shortfall— an estimated 63,589 physicians, or a shortage ratio of 69 physician jobs per 100,000 people. The Northeast, the report estimates, will actually have a surplus of 28,627, or 50 jobs for every 100,000 people. The authors tallied demand based on an equation that accounts for a state’s population growth, number of aging individuals, and the number of physicians nearing retirement.

The study authors estimate that California, Florida, and Texas will face the highest demand in the coming years.

For example, California’s elderly population is estimated to grow by about 148% through 2030, according to the study. Meanwhile, about 33% of physicians in the state are within five years of retirement. Although the number of students at medical schools increased by 20% and residents and fellows by 12% from 2006 to 2016, the number of new physicians coming into the workforce will not offset increased demand and retirements. This could leave the state short by 32,669 physicians as of 2030.

Florida and Texas also have some of the fastest-growing population centers in the country. Their aging populations are anticipated to increase by 73% and 55%, respectively, by 2030. At that point Florida could be short of 21,978 physicians and Texas 20,420.

Dan Lezotte, a partner in workforce strategy and analytics at Mercer, says the consulting firm projects a deficit of about 100,000 healthcare jobs nationwide across all occupations by 2028.

“We get our projections by looking at historical patterns, the influx of new entrants into these occupations out of school, and migration patterns,” he says. “And the picture varies by state, and then within each state it varies by statistical areas.”

Mercer’s predictions are derived from available data of estimated shortages in different healthcare occupations based on geography and vary somewhat from Lin’s research. For example, Mercer’s Future of the U.S. Healthcare Industry labor market report predicts California will have a shortage of 2,580 physicians by 2028 and that New York will actually have a shortage as well, of 2,706. In looking at the broader healthcare workforce, the Mercer report predicts New York, New Jersey, and Tennessee will face significant shortages of 61,473, 17,769, and 16,719, respectively, across the healthcare workforce.

The biggest shortages will be among nurse practitioners and support staff like nursing assistants, according to Mercer. The main reason for the lack of support staff is low wages, Lezotte says.

“Healthcare is competing with other industries… where people are paid more and get more flexibility and things of that nature,” he adds. “Healthcare hasn’t kept up with the rising prices, especially post-COVID, as wages really escalated in lower-wage positions.”

A Costly Proposition

Having a shortage in any area of the workforce can dramatically affect a hospital’s finances. This can trickle down to patients when hospitals are forced to increase fees or cut services.

The obvious way a workforce shortage impacts a hospital’s income is through direct loss of revenue. When there is not enough staff, hospitals can be forced to suspend heart surgeries (one of the highest grossing types of care) or even close full surgical wings.

Counterintuitively, personnel shortages can increase costs. Salaries account for, on average, about 60% to 65% of a hospital’s costs, so even minor shortages can impact those costs greatly in several ways. For instance: When the workforce pool is small in any one area, hospitals and health systems may be forced to pay higher wages to attract and retain staff.

“With that much going toward staff members, even a marginal increase on a per-head basis translates into significant overall cost,” says Bradley Beauvais, an associate professor in the School of Health Administration at Texas State University. “The wage rate is going to go up and, for some facilities, it gets beyond the point where they can compete.”

In a 2023 study, Beauvais and colleagues found that labor costs increased by almost 40% at U.S. hospitals between 2019 and early 2022. They cited the necessity to use the two most expensive types of labor—overtime hours and agency or travel staffing—to fill staffing gaps. These kinds of labor, the report notes, add about 50% to the hourly rate an organization would pay a staff employee.

According to a 2023 report by the American Hospital Association that included information from more than 1,000 hospitals and health systems, contract labor costs escalated by 258% between 2019 and 2022. The number of full-time contract equivalents increased by 139% during that time and the median wage healthcare organizations paid to contract staffing firms rose by 57%. So, not only were facilities using more contract labor, but the rate for those workers increased precipitously.

Quality of Care

When there are not enough doctors in an area, or doctors are so in demand that their schedules are full, patients wait longer, and sometimes pay more, to see a provider. And when they finally do get to a doctor’s office or hospital, the quality of care can be compromised.

In a 2023 survey of 106 hospital and health system leaders across the country, healthcare management consultant Kaufman Hall found that 70% of respondents’ organizations were boarding patients in either emergency departments or post-anesthesia care units because of low bed capacity or staffing levels. Two-thirds of respondents said they were running at less than full capacity due to low staffing levels. Sixty-three percent were having difficulty meeting demand for physicians and, unsurprisingly, one-third of respondents said patient complaints about access to physicians were increasing.

When people are stressed and tired they are more likely to make errors and near misses, which can be particularly risky in a healthcare setting. Safety issues like falls and infections are more common when hospitals are understaffed. When rehabilitation and behavioral health facilities are understaffed, patient discharge from hospitals to these providers can be delayed.

A BMJ Journals article from 2018 found patient deaths rose when hospital wards were short-staffed of registered nurses or admissions to a ward were too high. Another study from 2004 in the Journal of Nursing Administration found that lower numbers of nursing staff on a hospital unit equated with higher medication errors and wound infections.

The common solution of bringing in temporary staffing may not be the best option to improve patient care, either. Temporary workers will inherently have a learning curve in their ability to mesh with staff and institutional knowledge and expertise with operating procedures. In addition, Beauvais says when a full-time staff member knows he or she is getting paid less than a contractor, they may be resentful, which could impact their work performance, including the way they care for patients.

Beauvais’s study found that, even as the healthcare organizations studied paid more for labor, there was no corresponding increase in the quality of care. Though the study did not consider why this was the case, he hypothesized that it could be due to the use of temporary staffing, more overtime (which can increase burnout), and cutbacks needed to make up for these increased labor costs. Healthcare providers could delay purchasing necessary equipment, buy cheaper but lower-quality supplies, or limit use of supplies they already possess. Or they may ask staff to perform roles outside of their normal duties.

“The goal in healthcare is to take as much off of the plate of providers as they can to do patient care instead of the ash and trash stuff that takes up so much of their time,” Beauvais says. “For instance, you might see nurses cleaning rooms when staffing is short. Nurses are not trained to clean rooms; we have specialized equipment to do that. Nurses are most valuable at bedside when they can fully focus on their job.”

Despite all these challenges, the shortages haven’t significantly impacted most hospitals’ professional liability. Pete Reilly, practice leader of Hub International’s North American healthcare specialty practice, says hospitals have responded with a range of measures including pay raises and increased focus on retention and technology.

“There are plenty of carriers who will still write business,” Reilly says. “They need capital, so will write some of those risks that they may not ideally have done before. And I haven’t seen—in underwriting negotiations—where a carrier has focused in detail on shortages that are occurring and how organizations are managing them.”

Increasing the Workforce

To keep up in the coming years, healthcare organizations must change their recruiting strategies to reach out to nearby areas that may have a surplus of workers. They will also likely need to upgrade the employer value proposition to include competitive compensation, better benefits, and more flexible schedules, Lezotte says. In lieu of relying on travel nursing or staffing agencies, organizations can focus on hiring their own workforce and creating a more satisfying work environment to improve retention. The 2023 Kaufman Hall report notes that organizations were using an assortment of staffing arrangements to fill in gaps in their workforce. These included the use of per-diem staff and float pools (an internal group of nurses and other staff who cover shifts when the need arises); offering flexible start times and shift lengths, weekend-only positions, and job shares; and adding part-time staff.

Though recruiting and retention are important, there will still likely be a workforce shortage, especially in some areas, in the coming decade.

“We’re still going to have a need for nurses and we’re still going to have to pay for doctors and other providers,” Beauvais says. “And there’s a movement afoot right here at Texas State to increase the number of nurses that are turned out every year and I would guess that’s the case at other institutions as well.”

The university traditionally graduates about 100 nurses a year but is working to double that number— including by working with all of the University of Texas institutions to recruit a greater number of students.

Increasing the pipeline of doctors funneling into the system is more difficult. The majority of residency positions available each year are funded by Medicare and Congress sets the cap. Current law allows for 200 new spots funded by Medicare each year from 2023 to 2028. Lawmakers have attempted to address the issue through several iterations of the Resident Physician Shortage Reduction Act, which would increase the number of funded spots by thousands of spots each year. The bill has not yet passed.

A handful of states, including Missouri and Oklahoma, are passing laws giving provisional licenses to medical school graduates unable to find residency positions. The provisional license allows the graduates to practice primary care in medically underserved areas under the supervision of a fully licensed doctor. States including Texas, California, and Minnesota have allocated monies for state-funded residencies. And this past summer, the Biden administration gave 15 organizations across the country approximately $750,000 each to create new rural residency programs.

The news is not all bad, sources say.

“The physician growth rate is about 28% and the rate for nurse practitioners is about 45%, so we are adding about 30,000 mid-level practitioners a year,” according to Lin. “That’s a tremendous number being pumped into the workforce. About 7% of physicians will not be matched [in a residency program] when they graduate by 2030, but much of that need will be met by physician assistants and nurse practitioners.”

Even today, in many larger health systems when primary care doctors leave family practice or internal medicine, they are replaced by nurse practitioners. That includes the Department of Veterans Affairs, where Lin says nurse practitioners are being hired instead of doctors at a rate of two to one.

Underused Technologies

Another solution often proffered to mitigate the provider shortage is increasing the use of technology.

Some of the obstacles to using technology in medicine were removed during the pandemic, particularly in behavioral health. These included insurance coverage of audio (instead of just video) behavioral health services and allowing any geographic region to be the origin of site for telehealth services.

Some restrictions, however, have since been reinstated. Medicare will no longer pay for telehealth visits for all its beneficiaries. And Medicare’s requirement for in-person visits with a behavioral health provider after an initial telehealth appointment will be reinstated at the end of 2024.

Some of these continuing obstacles may be the reasons that telemedicine and the use of artificial intelligence to improve care—and augment the existing workforce— continue to lag in some areas of healthcare. None of the respondents to the Kaufman Hall survey thought their organizations had optimized the various technologies they had already spent money to put in place.

Technology can decrease the number of providers and still provide quality services. A point solution like Headspace could help someone meditate, increase mindfulness, and improve sleep habits, which could reduce their need for therapy. Healthcare organizations that specialize in cancer often provide remote second-opinion services, which may relieve the need for specialists in areas where shortages exist. And one team of providers can run a tele-ICU (intensive care unit), using technology to provide remote critical care resources for hospitals in different locations. Allowing patients to check in and complete paperwork on a mobile app can reduce the hours needed for front-office staff.

Other types of technology can lighten the load of the current workforce, with an eye to reducing burnout and improving care. Reducing “pajama time”—hours providers spend working at home in excess of their regular workday—has consistently been a goal in healthcare.

Charting records often tops the list of least-liked tasks doctors perform. But Mary Beth Kingston, chief nursing officer for the Advocate Health system, says artificial intelligence (AI) tools known as ambient listening hear the conversation between the provider and patient and create a note that can be put in an electronic medical record. A provider can look at the note later and make any relevant changes. AI programs can also triage messages in a provider’s inbox to save time answering those emails.

“I think we are just going to have to be creative and automate more tasks, which is where I think a lot of effort is being put in today,” Kingston says. “We are seeing hospitals at home and remote monitoring.

We haven’t even really tapped into how we can marry technology with what healthcare providers bring to the table. And any type of automation that makes work more efficient allows providers to use more of their time taking care of patients.”

The Sky Is Not Falling

Many reports that come out tallying the number of U.S. healthcare providers that will be needed in the coming years are reminiscent of Chicken Little’s sky-is-falling. But people in the industry, like Kingston and Lin, agree the outlook isn’t as dire as it may sound.

The industry will have to look at shortage prediction areas and create strategies to address gaps.

in those geographies. Some approaches will work in the near term like using incentives to get graduates to work in rural areas. Others will help over the long term, as schools actively recruit rural and diverse groups of students and try to lure second-career professionals into the field.

“In healthcare, we respond to the need,” Kingston says. “If we continue to do like we are doing today, we will have issues. It will require action, but I’m confident there are so many people in healthcare that care so deeply about what they do that we will all be able to work together to find solutions.