The challenges of staffing healthcare facilities today are undeniably daunting.
The healthcare sector has the highest number of unfilled positions nationwide, totaling 335,017 open job listings as of February 2024. According to a 2024 ERCI report, US healthcare employment across the continuum remained nearly half a million jobs below projected levels based on pre-pandemic trends. Basic supply and demand principles have come into play making healthcare candidates more expensive than facilities are accustomed to. With these factors in place, many facilities have slowed their efforts to get to optimal staffing levels and are resigned to operating under capacity.
“Excess capacity can cripple an ASC already operating on thin margins,” says Erik Miller, President of MedHQ. “Staffing is integral in ensuring operational efficiency and ultimately bolstering the ASC’s sustainability and profitability. We also know it’s easier said than done – and most ASCs simply can’t dedicate the resources to finding talent on their own. Recruiting talent comes at a cost, but the ROI is clear and the time to recoup is drastically lower than you might think.”
In this article we will examine common scenarios to visualize upside and downside risks:
- Upside Risk – Uncaptured surgical volume. Operating at break-even or just over is dangerous and unsustainable.
- Downside Risk – Staff burnout is real. Losing more staff could take your center from break-even to underwater.
Scenario One: Upside Risk of Operating at 70% Surgical Capacity
Many surgery centers are currently delaying cases based on surgical capacity. Nearly all capacity problems are attributed to staffing shortages – most commonly RNs and Surgical Techs. Combined, these two full-time positions (even with a recruiting fee) could cost the center around $200K annually in incremental expenses. However, if centers are short-staffed without these two positions, they could be missing out on revenues and profits that significantly outweigh those additional costs.
Let’s examine a familiar scenario in today’s market:
Multi-Specialty Orthopedic Surgery Center with Estimated Incremental Profit/Case = $1500
- Current Case Volume: 140 cases/month (70% capacity)
- Current Monthly Profitability (after debt service) = $0
- Desired Monthly Case Volume: 200 cases/month
- Estimated Incremental Profit Per Month = $90,000
- Estimated Additional Staffing Costs = $200,000
- Potential Increase to Annual Profitability after Paying Incremental Labor Costs = $1,080,000
“As good as this math looks, what we are seeing when centers are operating at full capacity is even better.” says Matt Lau, Senior Vice President of Client Accounting & Finance at MedHQ. “We often see that centers have room to set higher goals. In many scenarios where the ASC has sufficient physical capacity but staffing shortages are limiting the number of cases scheduled, the investment in additional staff can expand case volumes even beyond the current goal.”
Let’s say in the scenario above that the physicians are still delaying or diverting cases to other facilities even after hiring the full time RN and the full time Tech. However, by hiring additional part-time and full-time staff, the ASC can expand to 250 per month. By hiring and being sufficiently staffed for all the cases that the physicians can bring to the center, the ASC would generate incremental profits of $1,500 for each additional case (after deducting the incremental supplies and labor cost). So, by increasing volumes from 140 cases per month to the initial goal of 200 cases per month, the center would pay for the new hires and could increase profits by $90,000 per month. By hiring additional staff to support 250 cases per month, the center would generate an additional $75,000 in profits every month. By hiring and being optimally staffed for all the cases the physicians can bring to the center, the ASC in the scenario above would generate $165,000 per month in additional profits. Over a year, this translates to $1.98 million in increased profits and potential distributions.
The expense tied to bringing on talent can be recouped very quickly. Most surgery centers can recover the cost for recruiting an RN in less than a week, in some cases, less than a day. Times are illustrated below for orthopedics, spine, and total joint procedures based on average profit per case and considering labor, supplies, and operational expenses and variables.
Scenario Two: The Downside Risk of Understaffing
Staff burnout is a well–documented phenomenon that has contributed to the healthcare workforce shortage and continues to contribute to many seasoned clinicians deciding to leave the profession. For those who do stay, it can create a negative effect on service which can compromise patient safety, patient satisfaction, and productivity.
A recent report by ERCI documents nearly half of healthcare workers reported feeling burnout with 57% experiencing anxiety symptoms and 34% depression symptoms. An incredible 44% intended to look for a new job in 2022 – many of those jobs outside of the healthcare sector.
With this in mind, let’s revisit our example of the ASC operating at break-even or a little above. That center is short-staffed. It can cover the current 70% capacity case schedule, but nothing more. Leaders have probably heard staff threatening to leave because of burn-out. If more staff leave, the number of cases the ASC can perform will shrink further – causing a further loss of revenues and profitability.
“This scenario underscores the critical role of staffing optimization in maximizing ASC revenue,” says Mayte Rechani, Executive Director of Staffing Solutions for MedHQ. “However, the challenge for many centers lies not only in recruiting top-tier clinical talent, but understanding which positions are critical to fill. We help clients prioritize with real-time data that can analyze down to the penny how quickly a center can recoup the cost of bringing on talent – but more importantly, how quickly that can translate into new revenue for their center.”
Delivering Strategies for Healthcare Staffing Solutions with Measurable ROI
The math is compelling and once ASC leaders and physicians are privy to the potential, the conversation quickly transitions to questions, such as:
- How do I find and afford talented clinical staff?
- How can I operate at full capacity with every operating room utilized?
- Will opening another operating room lead to increased revenue?
- Are my clinicians at risk of burnout due to staffing shortages?
- Will investing in staffing solutions be supported by management executives?
“These questions encapsulate the complex considerations that ASC leaders face when addressing staffing challenges,” says Rechani. “However, we know from experience that these challenges can be transformed into opportunities for growth and success.”
MedHQ provides a data-driven model that quantifies the ROI of investing in strategic staffing. MedHQ’s Talent Portal is a centralized platform to recruit, schedule, and manage clinical and non-clinical staff including contract, contract-to-hire, and direct hire.
We built Talent Portal specifically for outpatient healthcare to provide the data and reporting needed to plan, control costs, and run your facility efficiently,” adds Rechani.
Putting it All Together
The success of an ASC hinges on clinical expertise, operational efficiency and strategic healthcare staffing. If you’d like to learn how to unlock your center’s full potential, maximize revenue, and pave the way for sustained growth and success, we’d love to connect with you.
