[W]hile nursing shortages have grabbed headlines during University of Vermont Medical Center’s prolonged labor dispute, hospitals across the state are reporting the same problem.
In fact, nurse staffing is playing a big role in the current and projected budgets of Vermont’s second-largest hospital, Rutland Regional Medical Center.
On one hand, a lack of nurses – and a resulting reliance on expensive temporary help – is one reason Rutland’s operating budget is expected to barely finish in the black in the current fiscal year.
On the other hand, an aggressive nurse-hiring program is expected to cut the hospital’s spending on temporary help by more than $5 million next fiscal year. Rutland Regional set a hiring goal of 72 nurses and has brought on 65 so far.
“So we are very, very close to our target,” said Judi Fox, the hospital’s chief financial officer. “This is really important for us.”
Some Vermont hospitals are losing money, but Rutland Regional’s financials have stayed on the positive side of the ledger in recent years. Documents from the hospital and the Green Mountain Care Board show that the 144-bed hospital posted positive operating margins of $4.4 million, $10.8 million and $4.16 million for fiscal years 2015-17.
The hospital’s latest projections show that surplus decreasing to about $2 million in the fiscal year that ends Sept. 30. And given the size of Rutland Regional’s budget – the hospital will compile $264.9 million in expenses this year – that represents a thin operating margin of 0.8 percent.
Rutland Regional’s patient revenues actually are coming in above expectations, in part due to an influx of patients with the flu earlier this year. But expenses are expected to exceed the fiscal 2018 budget by $7.3 million.
“Due to our overrun, we are going to (have) less than 1 percent of an operating margin – well under where we felt we should be,” Fox told care board members at a meeting this week. “That’s significant for our organization.”
There are multiple factors behind that overrun, including pharmaceutical costs. But a significant part of Rutland Regional’s increased expenses are attributed to so-called “travelers” – nurses hired on a temporary basis, and at a premium salary, to fill shifts.
On average, the hospital has been employing 32 temporary nurses each month. Rutland Regional is spending $6 million on traveling nurses in fiscal 2018, up from about $4.3 million the year before and nearly double fiscal 2016’s total.
“For us, for every traveler we pay, we could employ a little more than two of our own employees,” Fox said.
A statewide and nationwide nursing shortage is one factor. But Rutland Regional also temporarily lost a key staffing pipeline while Castleton University switched from a two-year nursing program to a four-year program.
Claudio Fort, who took over as Rutland Regional’s president and chief executive officer earlier this year, said the hospital serves as a site for Castleton students to perform clinical rotations. Fort said that exposure, “combined with the fact that many Castleton students originate from this general geographic area, results in their looking favorably at (Rutland Regional) when they seek employment after they graduate.”
In a typical year, the hospital would hire 20 to 30 Castleton graduates, Fort said. That went down to zero during the university’s degree-transition period.
Fox said the hospital has responded to the nursing shortfall with a “very formalized (registered nurse) recruitment program.”
Based on the number of travelers and expected retirements, administrators decided to hire the full-time equivalent of 72 nurses. That’s expected to reduce the cost for traveling nurses in fiscal 2019 to $986,000.
Fox detailed a variety of recruitment strategies including the hospital’s nurse-residency program, which is “a way for us to help onboard new graduates in their first year of employment.”
“I can tell you that were were successful at hiring new grads because of our residency program,” she said. “It’s something that gives the new grads a little more confidence to come in and learn fast-paced, highly critical work.”
Rutland Regional also offers hiring bonuses in exchange for a two-year employment agreement. And the hospital provides support for licensed nursing assistants who want to become registered nurses and for registered nurses who want to pursue a bachelor’s in nursing.
For nursing assistants, “we would help them with payment and tuition, and we would provide flexible schedules for them so that they could accommodate both a work schedule as well as a school schedule,” Fox said.
Fort said the programs tie into a “culture of engagement” that is “really focused on making it a good environment that people want to work in.”
“I think that goes a long way when you try to recruit folks into that environment and, especially, retain people,” he said.
Administrators are hoping that also will carry over into successful contract negotiations with nearly 400 Rutland Regional registered nurses who are represented by Massachusetts-based Local 6 of the Office and Professional Employees International Union.
The union’s contract expires at the end of September.
“We are currently in negotiations with our union. They’re going fairly well,” Fox said. “But this is a consideration we need to look at in our budget. And it is not a surprise that the union negotiations at UVM will impact everyone across the state.”
