The nation’s healthcare workforce still is trying to recover from the COVID-19 pandemic nearly three years after it began as labor shortages stress hospitals and clinicians, spurring increased burnout among staff ranging from nurses to executives.

In addition, healthcare workers across the country have waged strikes to gain higher pay and optimal staffing conditions in employment contracts, while resident physicians increasingly have been involved in labor organizing.

These labor trends will continue posing challenges to health systems this year as facilities work to get back to pre-pandemic operations and stem labor costs that rose last year, experts say.

Ongoing staffing shortages and use of temporary labor

Staffing shortages are expected to continue this year, especially among nurses, as widespread burnout and increased turnover hits the sector. Shortages have led to ongoing use of costly contract labor to fill labor gaps even as severe COVID-19 hospitalization rates have declined.

In December, the national average weekly pay rate for travel nurses was $3,173, according to data from nurse staffing platform Vivian Health. That’s up from $1,894 in January 2020.

High rates are expected to remain fairly static this year, said Tim Needham, senior vice president of revenue at Vivian Health.

Without another COVID wave, demand for contract labor costs this year should normalize at about 60% higher than 2019 levels, Jefferies analysts said in January healthcare equities brief.

Persistent heightened labor costs are posing financial challenges for systems. Although some are boosting permanent staff pay to attract needed workers, many have still been unable to curb soaring labor costs.

“The cost differential between full-time staff and then contracted staff is continuing to put pressure on health systems to reassess their full-time employee compensation packages,” Needham said.

An increase in organizing among residents and interns

Healthcare workers in all roles have been active on the labor front throughout the pandemic in an effort to improve working conditions.

While nurses have long been the face of union activity, resident physician organizing has picked up in recent years, according to the Committee of Residents and Interns, a branch of Service Employees International Union.

The fast-growing union representing doctors in training had five election wins in 2022, four in 2021, one in 2020 and two in 2019, according to CIR-SEIU. It currently represents about 25,000 members.

Organizing for doctors in training is expected to continue in the new year, with residents at Montefiore Medical Center in New York and Lifelong Medical Care in San Francisco currently entering an election for union representation, according to the union.

Last year, residents at three Los Angeles County hospitals and one Oakland, California-based hospital authorized strikes, though both groups reached deals with the systems beforehand and averted a work stoppage.

Strike threats from resident physicians are particularly tricky for hospitals because residents are more difficult to replace than nurses. Additionally, resident physician strikes threaten a facility's ability to keep operations afloat in the event of a walkout, said John August, director of healthcare labor relations at Cornell’s School of Industrial and Labor Relations.

Like nurses and other healthcare workers, unionized residents are pushing for better pay and adequate work support.

“Doctors are feeling that they've kind of turned a corner — for many years, they felt that their power and influence was being reduced due to consolidation of health systems and reimbursement systems and technology,” August said.

Burnout, turnover hits executives

Reports first pointed to burnout hitting nurses and physicians as healthcare workers reporting feeling stressed and emotionally exhausted.

Now, even healthcare executives are reporting symptoms of burnout, leading some to consider career changes.

A December study from consulting firm WittKieffer found that nearly 75% of surveyed healthcare executives reported feeling burned out during the last six months of 2022, compared to 60% of respondents who reported burnout symptoms in 2018.

The survey, which included responses from 233 healthcare executives, also found that executives felt significantly less productive and unable to overcome challenges at work, and were less determined to make an impact in their careers.

Increased overall burnout in the sector may lead to greater executive turnover, an effect which has been recorded among nurses.

Still, a number of executives currently leaving their posts likely delayed retirement in order to weather their organizations through the pandemic, according to Rachel Polhemus, a senior partner at WittKieffer's Healthcare Practice.

“Each wave presented a different set of factors that really created an element of ‘I'm ready to step away and let a new leader come in and lead,’” Polhemus said.

Additionally, replacing executives could prove trickier post-pandemic.

“The skill sets and competencies organizations are looking for in executives are different than they were pre-COVID,” Polhemus said.

Hospitals are placing added value on candidates with past experience in executive roles dealing with crisis management during the pandemic, Polhemus said, adding that job-seeking candidates also are looking at how organizations fared through the pandemic when deciding whether or not to accept offers.

Healthcare workers have been active on the labor front as employment contracts come up for renegotiation and workers get a chance to bargain for better working conditions following a historic public health crisis.

Contentious negotiations between hospitals and unions have also led to major strikes, including a three-day walkout among 7,000 nurses at two New York hospitals at the start of this year.

Last year, tens of thousands of healthcare workers waged strikes. Nearly twice as many others threatened to do so, but reached deals before walking off the job, including physician residents and interns who have been increasingly organizing in recent years.

The pandemic “created new perspectives in the minds of doctors and other healthcare workers that have always been there in some form, but never in such an acute and sustained way,” John August, director of healthcare labor relations at Cornell’s School of Industrial and Labor Relations, said.

The Bureau of Labor Statistics only tracks strikes involving 1,000 or more workers, though Healthcare Dive tracked strikes involving 500 or more healthcare workers throughout 2022, including those averted when a deal was reached.

A majority of the strikes that took place and were averted involved nonprofit hospitals, which can likely be attributed to the prevalence of nonprofits compared to for-profit hospitals. 

Many strikes also occurred in California, the state with the largest number of healthcare workers. California nurses alone represent 14% of the nation’s healthcare and social assistance workforce, according to data from the Bureau of Labor Statistics.

A three-day strike among 15,000 Minnesota nurses in September was the largest strike by number of workers last year.

They returned to work without a deal and threatened another strike, before reaching an agreement in December with 18% and 17% raises over the course of three-year contracts.

The longest strike occurred at Kaiser Permanente facilities in Northern California, when 2,000 mental health clinicians walked off the job for nearly 10 weeks. They reached a deal focused on making workloads more manageable and reducing patient wait times — key concerns initially prompting the strike.

Healthcare workers embroiled in labor disputes today have similar goals: to ensure they work at facilities with adequate staffing levels and to get higher wages to quell ongoing turnover and keep pace with inflation and the rising cost of living. Many are also asking for greater protections against workplace violence and more powerful say in front-line working conditions.

Recent healthcare worker strikes are part of a larger labor mobilization movement as the country enters a post-pandemic environment where workers want a greater say in decision making, Dan Cornfield, a professor of sociology at Vanderbilt University, said.

“There’s always sector-specific labor issues and then there’s just the general ones across the economy,” he said.

Increased organizing comes as workers in other industries and companies, like Starbucks and Amazon, push for unionization, he said.

“Healthcare is not the only sector during this post-pandemic period where labor mobilization is occurring — there have been strikes and new unionization efforts in just about every sector of the U.S. economy,” he said.

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Experts have predicted that the U.S. is headed for a recession in 2023, and it will come on the heels of a global pandemic, an unprecedented healthcare staffing shortage across many specialties, and the worst inflation in decades. But a recession does not have to be a source of dread for hospital leaders who take a strategic approach to planning and aligning with the right partners.

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The COVID-19 pandemic has continued to impact healthcare jobs, even as healthcare employment at many facilities has returned to pre-pandemic levels, according to a Peterson and Kaiser Family Foundation health system tracker released Friday.

Healthcare job growth rates have not yet returned to levels that had been expected before the COVID-19 pandemic, when healthcare employment had been steadily growing, according to the tracker, which compiled data from the Bureau of Labor Statistics.

For example, employment in home health services had recovered completely in December 2022 after job losses from the COVID-19 pandemic. In December, 1.6 million Americans were employed in home health services. However, job gains in the sector only grew at an average rate of 0.3% per month. If growth had continued steadily from 2020, without pandemic job effects, home health services would have employed 1.7 million Americans.

At the beginning of the pandemic, healthcare jobs fell sharply but not as severely compared to other sectors. Healthcare employment fell 8.2% from April 2019 to April 2020, while non-health jobs employment fell by 14%, according to the tracker. However, the decline was short lived, with the healthcare industry reporting almost 95% pre-pandemic job recovery by July 2020. Physician offices, home health services, outpatient care centers and hospitals employed more people in December 2022 than they had in February 2020.

But pandemic effects still linger in the industry, with the tracker reporting that the overall health sector has seen a 3.9% decline in actual versus projected job growth rates based on pre-pandemic levels.

 

Elder care and nursing home facilities have suffered the worst projected job losses, with the industries seeing 12.5% and 10.5% declines respectively. Both industries continue to see relatively low employment, according to the tracker.

The Biden administration has recently increased its oversight into the nursing home sector, announcing in October that the administration would increase penalties for nursing homes hit with citations. The administration also said it would devote funds to spur job growth at nursing homes.

The tracker also analyzed healthcare job quits, finding that, since the beginning of 2021, healthcare workers have been leaving their jobs at higher rates compared to before the pandemic. Healthcare and social assistance job quits were 32.5% higher by November 2022 than they were before the pandemic, according to the tracker.

The job quits come as healthcare burnout reached unprecedented highs during the pandemic. Physicians have reported experiencing delayed COVID-19 burnout and a third of nurses said they planned to quit their job at the end of 2022.

Healthcare has also seen a slight increase in wage earnings. Since mid-2021, healthcare wages increased slightly faster than overall average earnings, with private healthcare employees seeing a 17% increase in wages from February 2020 to November 2022, compared to a average weekly increase of nearly 15% for private sector employees.

And, although the sectors has the lowest job gains, nursing home and elder care employees have seen the largest average earning increase of 21.8% and 20.5%, respectively, although the tracker noted that an increase in average wage does not necessarily mean higher pay for a given worker and could be influenced by changes in the distribution of low or high wage employees.

Similarly, although physician offices saw the largest employment gains following the COVID-19 pandemic, they’ve also seen the lowest average wage increases, according to the tracker, with average earnings rising 11% from February 2020 to November 2022. Hospital employees saw an average increase of 17%.

Dive Brief:

• Healthcare ranked last for employee satisfaction on pay across 27 industries, and only half of healthcare employees said they believe they are paid fairly, according to a survey from management firm Qualtrics.
• Compared to other industries, healthcare workers also had lower scores for employee experience and intent to stay in their roles, the survey found.
• Ultimately, some 38% of healthcare workers are at risk of burnout and 39% are considering leaving their organization, according to the survey.

Dive Insight:

Ongoing, persistent burnout has been reported among healthcare workers in all roles throughout the COVID-19 pandemic. Some clinicians have gone on strike to demand higher wages and better working conditions, or left the profession entirely in the years following the onset of the historic public health crisis.

Only 38% of respondents to the Qualtrics survey said they feel their pay is clearly linked to their performance. The survey includes responses from nearly 3,000 healthcare employees across 27 countries.

The industry currently faces staffing shortages driven by burnout and heightened turnover amid the pandemic that haven’t yet fully eased.

From 2021 to 2022, the percentage of healthcare employees reporting they intended to stay in their jobs fell, and is slightly below the cross-industry average.

Engagement has somewhat improved in the healthcare workforce over the past year, however, with about two-thirds of those surveyed reporting being engaged. That’s about the same as the cross-industry average.

One step employers can take to reduce dissatisfaction and better retain top talent is by creating value for employees, the report said. Healthcare employers should also ease burdens by eliminating process inefficiencies and design inclusive environments that promote better listening and communication.

Qualtrics' report also included additional survey responses from 9,000 consumer respondents across 29 countries on their hospital experiences, and over 7,000 consumers across 28 countries on their health insurance experiences.

Some 74% of respondents said they were satisfied with their hospital experience, and 76% said they were satisfied with their health insurance experience.

Hospitals ranked as the fourth most trusted industry among the 20 studied, following electronics makers, hotels and universities, the report found.

The physician workforce in the U.S. is slowly shifting as older doctors retire and younger doctors begin residencies to kickstart their careers.

More women are entering the profession, and certain specialties have seen boosted interest in the past few years, according to new data from Association of American Medical Colleges.

Some 37% of active physicians in the U.S. were women in 2021, up from about 36% in 2019, and about 47% of residents and fellows were women, according to the AAMC report.

Large gender pay gaps still exist, however. A 2021 report from the Rand Corporation published in Health Affairs found female physicians earn $2 million less than men over the course of their career, with the largest gaps in male-dominated specialties.

That study found that male physicians in surgical specialties earned about $2.5 million more than female physicians while male physicians in primary care earned about $900,000 more than female physicians over their careers.

Across all genders, primary care specialties like internal medicine, family medicine and pediatrics had the largest number of active physicians and residents in 2021, according to the AAMC report.

Women, however, accounted for of 65% of active physicians in pediatrics, compared to almost 6% in orthopedic surgery.

Women also accounted for 86% of obstetrics and gynecology residencies, compared to nearly 11% in sports medicine.

Interest in sports medicine as a specialty has grown significantly over the past few years, rising from 2,252 to 3,208 practicing physicians from 2016 to 2021.

Sports medicine also grew the most among residents and fellows, rising about 27% during that period, followed by psychiatry, which rose about 26%.

Some specialties have also seen declines in active physicians, like pulmonary disease. Residents declined in preventive medicine and pediatric anesthesiology.

The report includes race and ethnicity data for the first time, and found that about 64% of practicing physicians in the country were White, while about 20% were Asian, 7% were Hispanic — regardless of race — and about 6% were Black in 2021, according to the report.

Healthcare employment is growing at a record pace, but wages remain stagnant, which some experts say likely results in part from the trend of consolidating health systems.

The latest Bureau of Labor Statistics numbers show the industry gained 49,000 jobs in March and 398,000 over the past 12 months. Analysts at Jefferies say the month-to-month growth is the second largest increase on record for the sector. Healthcare job growth has surpassed non-healthcare job growth and nudging the share of total jobs to an all time high, according to consulting firm Altarum.

Hospital employment grew by 14,000 jobs in March, adding up to a total of 120,000 for the combined first quarter of 2019. BLS tallied ambulatory jobs at 27,000 and home health and skilled nursing jobs at 9,000.

At the same time, real average weekly earnings for production and non-supervisory employees across sectors grew 0.1% over the month according to BLS. That growth in earnings is due to an increase in average weekly hours.

For nurses and pharmacists working in hospitals in heavily concentrated markets, annual wage growth has been lagging behind national rates by as much as 1.7 times. That's according to researchers Elana Prager and Matt Schmitt, of Kellogg and UCLA, respectively, whose working paper compares wage growth rates in markets where mergers have occurred.

The paper drew the ire of the American Hospital Association.

"Among the many serious concerns about the study are its lack of rigor in the definitions and assumptions it used, and absence of data on total compensation and the recognition of other obvious factors that could affect wage growth," an AHA spokesperson said in a statement criticizing media coverage of the research.

Academics researching the impacts of consolidation have asked the Federal Trade Commission to look at the impact horizontal mergers have on labor and consumers before they become difficult to challenge. FTC green-lit hundreds of horizontal hospital mergers over the past decade, maxing out at 115 in 2017, according to the National Institute for Health Care Management. In 2009, there were 50 such deals.

A Penn Law paper on mergers and labor markets published last year found employer consolidation has had a direct impact on wages and productivity in concentrated labor markets in the past. Wages, the authors write, tend to dilute when competition is scarce and labor concentration is "very high, as high or higher overall than product market concentration."

Jason Plagman, a healthcare analyst at Jefferies, agreed, telling Healthcare Dive it becomes an "oligopsony situation where there are only a handful of buyers of a product" — in this case, labor — "you tend to see [employers] exert more control."

As AHA noted, hospital and health systems tend to offer non-wage benefits, "such as employer-sponsored insurance, time off and education benefits" rather than increase wages. That's an important caveat, said Dennis Shea, a health policy professor at Penn State.

 

Labor push

The debate comes as nurses unions have been pushing hard for additional staff and higher wages for hospital workers in consolidated states like California, New York, Massachusetts and Pennsylvania. Hospital consolidation has raised prices as much as 20% to 40% when they occur in the same market, according to National Institute for Health Care Management, with some prices reaching as much as 55%.

Unions argue hospitals can afford to pay extra to hire more nurses. Jefferies analyst Plagman said it's not that easy. About 50% of hospital revenue goes to salary, wages and benefits, he said, and half of that chunk of revenue goes to nurses. "If they give a 3% raise to all nurses, that's a big impact on their overall expense line," Plagman said.

The lack of competition bars labor from seeking work elsewhere. A nurse in a concentrated labor market can't quit their job to work for the hospital down the street, because it's probably owned by the same health system, Shea said.

Shea and Plagman agreed that movement of labor away from concentrated markets is one way to break the wage slump. But lack of mobility was one of the consequences of concentration found in a National Bureau of Economic Research published in February 2018. The paper suggests a negative relationship between consolidated markets and wages that becomes more pronounced with higher levels of concentration and only increases over time.

Pay raises have historically been pushed by labor unions, and though some hospitals have already raised wages, few have been inclined to raise staffing levels as well.

"Strikes are picking up," Shea said. "That's always an indicator that wage and salary growth will pick up a little bit."

While labor disruption has been on the rise over the past year, Plagman ​said he expects employment and wage growth to continue at the current pace. At some point, he said the market will have to resolve itself.

"What we're seeing is hospitals and healthcare providers are hiring, but they've been very disciplined over the past few years giving raises to nurses and therapists," Plagman said.

In testimony to the FTC in October, economist Alan Kreuger alleged employers in concentrated markets "collude to hold wages to a fixed, below-market rate," even when the economy is booming. Union membership has plummeted 25% since 1980, and without a counterweight to balance the power of a monopsony, he argued, employers are free to set wages at will — even if they lag behind inflation rates.

Pressures to contain costs and move from volume to value is forcing health system executives to be extra delicate with their labor expenses. When nurses strike, hospitals have temps at the ready. That's a boon for staffing agencies like AMN Healthcare Services and Cross Country Healthcare.

Cost control in healthcare is a bit like "pushing on a balloon," Shea said.

Slow growth or declines in one sector means business is booming for another. In this case, ambulatory added 27,000 jobs month-to-month in March, up from 22,000 in February, and Jefferies analysts are looking favorably at temporary staffing agencies.

While "all indicators" say healthcare wages should be pushed up, Shea said, he wouldn't be surprised if the growth rate continued to limp along for a little while longer.

More state lawmakers are considering bills around nurse staffing this year after shortages and other workforce challenges have hampered hospitals throughout the COVID-19 pandemic.

Labor unions representing nurses and other healthcare workers have been instrumental in getting those measures to pass in other states and are proponents in new legislation, but hospitals have long pushed back on such rules — particularly those outlining nurse-to-patient ratios — saying a one-size-fits-all approach would limit flexibility and could strain operations.

Lawmakers in Washington state are considering a bill around nurse-to-patient ratios this session after failing to pass a similar bill last year. The latest bill would spell out exactly how many patients a nurse can be assigned to, determined through rulemaking by the state’s department of labor and industries. It would also cap mandatory pre-scheduled on-call hours at 60 hours per month, up from 24 hours a week currently.

Service Employees International Union Healthcare 1199NW, a labor union representing healthcare workers in the state, is backing the legislation, while the Washington State Hospital Association is not.

“We are deeply concerned about the negative impacts to patient access that will result from this bill,” WSHA said in a statement.

In Massachusetts, lawmakers plan to file a bill in partnership with the Massachusetts Nurses Association that would create nurse-to-patient ratios in each unit of acute care hospitals, with exact ratios determined through public stakeholder meetings held by the state health department, according to a release from the union.

And in Oregon lawmakers introduced a bill that would require nurses, along with technical and service staff at hospitals, to develop staffing committees. Those committees would establish standards and hospitals could face financial penalties for failing to comply.

Other states already have varying staffing laws on the books, like California.

California’s staffing law was passed nearly two decades ago and is considered to be one of the country’s strictest. It spells out exact nurse-to-patient ratios in the law, stipulating exactly how many patients a nurse can be assigned to in certain units. In intensive and critical care units, one nurse can be assigned to a maximum of two patients under that law.

New York also passed its own staffing law in 2021 prompted by the pandemic, but it does not impose ratios. It requires hospitals form clinical staffing committees that include front-line nurses and other direct care staff when setting annual staffing standards for units.

Colorado also passed a staffing law last year similar to New York’s, requiring hospitals to form nurse committees and develop staffing plans. Under Colorado’s law hospitals also must report the baseline number of beds they can staff and current bed capacity, which the health department will use to ensure hospitals are meeting required staffed-bed capacities.

Even in states with staffing laws, like New York, healthcare workers have still waged strikes over adequate staffing levels they want better defined in their employment contracts.

About 7,000 nurses at two hospitals in New York waged a three-day strike this January, which ended through a deal containing enforceable staffing ratios — a key point of contention in negotiations.

Healthcare workers in California also waged a number of strikes over staffing levels last year.