Ballad Health was already facing a shortage of nurses before the pandemic. The pandemic just intensified it.
The health system’s annual nursing turnover before COVID-19 was around 15%, which was below the national average. That spiked as high as 27% as the steady churn of hospitalizations and deaths caused nurses and other personnel to leave the profession or become traveling nurses.
Turnover has since stabilized to around 24%, which is around the average for the Southeast.
During testimony before a U.S. House subcommittee on Tuesday, Ballad Health CEO Alan Levine described the precarious position of rural health care systems. One of the most critical challenges is the nursing shortage, a problem intensified by burnout, retirements and the low capacity of nursing schools.
U.S. nursing schools turned away more than 80,000 qualified applicants for baccalaureate and graduate programs in 2019 because of an insufficient number of faculty, clinical sites and classroom space, according to the American Association of Colleges of Nursing.
“The reality is that if the gaps in health care employment are not quickly addressed,” Levine said in prepared remarks, “rural communities and other areas with higher growth in elderly and other vulnerable populations will face a serious inability to meet the needs of those increasingly relying on” the healthcare system.
A growing problem
The starting base pay for a nurse at Ballad Health is now $22 an hour, which is up from about $18 an hour two years ago. Levine stressed, however, that the system also pays nurses extra depending on, for example, their level of experience and the types of shifts they work. Very few nurses receive the base rate, he said.
To retain and attract staff, Levine said, Ballad Health has increased spending on nursing and allied health salaries and benefits by about $100 million annually. That has placed added financial pressure on the health system.
Unlike other systems that operate in places with a large commercially insured population, Levine estimated that 21% of Ballad Health’s inpatients are commercially insured and 70% are either uninsured or receive either Medicare or Medicaid.
While the system’s revenues are largely dependent on prices fixed by the government, Ballad has to compete in the free market for labor, where nursing wages have increased to as high as $140 per hour through contract agencies.
“Increasing wages for nursing and allied health workers is a short-term fix,” Levine said. Health care systems will need to work with universities and both the federal and state government to address the long-term problems, he said.
On Monday, Ballad announced that it will invest $10 million to create the Appalachian Highlands Center for Nursing Advancement at East Tennessee State University. The partnership is designed to bolster the supply of nurses while also determining ways to prevent burnout.
Ballad is also pushing for laws that would relieve financial pressure on struggling hospitals and improve the mental health of caregivers.
The impact of contract nursing
In his testimony, Levine said Ballad currently has openings for 700 nurses, and has hired 400 contract nurses to help offset the shortage — a shortage Levine said will likely get worse once the pandemic subsides.
Anticipating further staff shortages, Levine said he’d like to see the regulatory flexibility that enabled wider usage of telehealth become permanent. He’d like the same for the staffing flexibility that allowed Ballad to deploy staff like emergency medical technicians and paramedics in hospital settings.
Levine and several lawmakers also took aim at a contract nursing industry, which Levine compared to businesses price-gouging in the aftermath of a disaster.
“I know attorneys general will prosecute and go after organizations that gouge consumers in the aftermath of a disaster, like supplies or gas,” Levine said. “Here we sit where we’re now paying $140 an hour for contract nurses. I’ve got a nurse in one of my hospitals in Johnson City from Vanderbilt and the reason that nurse is here — four hours away — is because they can get three times more money from a contract agency.”
Rep. Peter Welch, D-Vermont, was among a bipartisan group of lawmakers who took issue with contract nursing agencies, saying that contract nursing “is essentially a stickup.”
Levine said he’s worried the nation’s reliance on contract nursing will only worsen when the pandemic subsides.
“I’m very concerned about the impact of the incremental cost and the impact on quality that an over-reliance on contract agencies has, and I hope somebody can look into that,” Levine said.
U.S. Rep. Morgan Griffith, who represents Southwest Virginia, asked Levine about the impact a federal vaccine mandate could have on the hospital system. Griffith estimated Ballad could stand to lose 15% of its workforce if a mandate is implemented.
Levine, who did not push back on Griffith’s estimate, said Ballad Health has had concerns about implementing a mandate for that reason, despite the majority of its staff, 63%, being vaccinated. Levine said they’ve tried to rely more on education to encourage people to get vaccinated, though if a federal mandate does come into effect they would have little choice but to implement it.
Subcommittee Chairwoman U.S. Rep. Anna Eshoo D-California, expressed support for vaccine mandates and said she believes the back-and-forth on vaccines is “holding us back” and hurting the country.
“I have to tell you, if I went to Stanford University Hospital, which is a couple miles away from me, as a patient, I wouldn’t want any doctor, any nurse, anyone near me that was not vaccinated,” Eshoo said. “I don’t go to the hospital to get infected.”