With a landslide of layoffs happening across the globe, the healthcare industry is facing a crisis like never before. The crisis is affecting the patients and the dedicated healthcare workers who are the backbone of the system. With the feeling of being lost and uncertain, healthcare employees are struggling to make ends meet.
But why is this happening? How is it affecting healthcare staff and patients? And what can we do to support our healthcare workers during these challenging times?
In this article, we dive into the reasons behind layoffs and staff shortages in healthcare, their impact on both staff and patients, and also explore potential solutions to support the healthcare industry in these challenging times. Read along to know more.
Why are layoffs in healthcare happening?
Healthcare layoffs happen due to three main reasons:
- Financial pressure on hospitals and healthcare systems
- Changes in healthcare policy and reimbursement
- Impact of current economic trends
And the pandemic has only intensified the already existing shortage of healthcare workers, making it more difficult and expensive for hospitals to find and retain staff.
When it comes to hospitals, the shift towards value-based care models and inflation is increasing financial pressure. The clinical labour shortage is also a significant contributing factor, with a projected gap of 200,000 to 450,000 registered nurses and 50,000 to 80,000 doctors by 2025.
These issues not only affect the hospital’s budget but also the staff who are expected to do more with less help, which can lead to burnout and high turnover. This, in turn, affects the hospital’s ability to provide quality care, increasing the likelihood of layoffs. It’s a serious concern that can have a ripple effect on the healthcare system as a whole, affecting patients, staff, and access to care.
US healthcare layoffs
52+ US hospitals and health systems laid off more than 5,500 employees in 2022. Of the hospitals that laid-off employees, 24% cut down positions and eliminated vacant positions instead of filling them up.
Here are the reasons for laying off employees across the US healthcare system:
- The majority of hospitals closed a facility, a service or the entire hospital.
- Several of them faced economic strains like inflation, unexpected expenses and revenue challenges, revenue cycle and supply chain issues.
- Some hospitals faced pandemic strains, and the end of COVID relief payments crippled their revenue.
- Many faced financial losses and were affected by the changes in the healthcare industry post-pandemic.
- Others restructured their workforce and operations to increase efficiency by eliminating duplicate and unnecessary positions.
To know more about the hospitals that laid off their staff, refer to Becker Hospital’s exhaustive list.
How are layoffs affecting healthcare staff and patients?
The impact of layoffs on healthcare staff can be significant, causing stress and mental health issues, financial hardship, and difficulty finding new employment. Losing a job in the field you devote your time and energy to is disheartening. It leaves one feeling lost and uncertain about the future.
Furthermore, unemployment in the healthcare industry can be challenging as the job market is highly competitive, and many healthcare workers may not have the necessary skills or qualifications for other jobs.
On the other hand, the impact on patients can be just as severe, with reduced access to care and longer wait times for appointments. It’s a difficult situation for both healthcare staff and patients and highlights the need for solutions that support both parties.
Staffing shortages in the healthcare industry
While on the one hand, hospitals are laying off their staff, on the other hand, the shortage of healthcare employees, especially nursing staff, is crippling the healthcare industry. The pandemic has led to a ‘great resignation’ among healthcare workers, leading to increased staffing shortages. According to a study by the U.S. Bureau of Labor Statistics, more than 275,000 additional nurses will be needed from 2020 to 2030.
Distorted patient-to-nurse staffing ratios are leading to delays in care, difficulty getting hospital beds, and poorer healthcare outcomes. It is causing significant disruptions to essential services and even the permanent closure of healthcare organisations due to a lack of resources.
Reason for healthcare staff shortage
Burnout among healthcare workers is one of the major reasons for healthcare staff shortage. With the economic downturn and healthcare systems looking to cut operational costs, the burden on existing staff has increased, leading to severe burnout.
A nationwide survey of physicians conducted in the United States revealed that burnout rates among doctors have risen to alarming levels. The survey saw 63% of physicians report at least one symptom of burnout, an increase from 44% in 2017 and 46% in 2011. Additionally, only 30% of doctors felt satisfied with their work-life balance, compared with 43% five years earlier.
Burnout among healthcare workers not only leads to staff shortage, but has also been linked to higher rates of alcohol abuse, suicidal ideation, increased medical errors, and worse patient outcomes.
The alarming impact of layoffs and staff shortages in healthcare: A national and international perspective
A recent survey shows that 18% of US healthcare workers have quit their jobs during the COVID-19 pandemic, with an additional 12% being laid off. Furthermore, among those who have kept their jobs, 31% have considered leaving. This shortage has been exacerbated by insufficient pay or opportunities and burnout. Canada and the UK have also been impacted by staffing shortages and burnout, with the Canadian Medical Association (CMA) and National Health Service (NHS) reporting similar issues.
Despite efforts by governments and healthcare organisations, the issue of layoffs and staffing shortages in the healthcare industry remains a challenge in all countries, including India.
Policymakers, healthcare leaders, and patient safety advocates globally must make these issues a top priority and address them as soon as possible to ensure access to reliable healthcare services.
How to address the layoffs and staff shortages problem in healthcare?
Healthcare layoffs
Given the economic conditions, the chances of layoffs are high. By recognising the warning signs of the healthcare facility, healthcare workers can save themselves from potential layoffs. For example, signs of financial trouble include budget cuts and vacant positions not being filled.
To increase their chances of staying employed, front-line healthcare workers should demonstrate their value and flexibility to the organisation. They must also proactively network and update resumes and CVs regularly.
In case of a layoff, it’s important not to take it personally and to focus on finding the right job with the right organisation. It’s also essential to remember that healthcare is generally a stable industry and jobs are plentiful for front-line healthcare workers.
Healthcare staff shortages
One solution to address the staff shortage in healthcare is to focus on the recruitment and training of qualified candidates. Additionally, healthcare leaders must evaluate and improve their operations to retain current staff and curb burnout. Automating administrative tasks such as scheduling and payment processing and implementing AI solutions to help doctors manage mundane tasks can reduce staff workload and burnout, improving patient experience.
Another solution is to invest in technology that can streamline processes and make healthcare professionals’ jobs more manageable. The healthcare system should also provide more support for healthcare workers with issues such as mental health, flexibility in their schedule and promoting work-life balance.
Parting Words
The healthcare industry is facing a difficult time as layoffs become common due to financial pressures and the ongoing economic trend. It is a challenging time for healthcare workers who have dedicated their time and energy to this field and may be feeling lost and uncertain about the future.
However, it is important to note that the demand for healthcare workers is expected to see 5x growth by 2025, indicating that this is a temporary setback. The healthcare sector remains a strong and growing industry, with increasing investments and consumer demand.
As the economy improves, opportunities in the healthcare sector will also increase. For now, let’s support our healthcare workers during these challenging times and work towards a brighter future for healthcare.
