ThedaCare trial shows how Covid-19 has disrupted the nursing labor market

The staffing crisis in health care reached a grotesque extreme last week when ThedaCare, a health care system in Wisconsin, applied for a temporary restraining order prevent a number of its employees from quitting their jobs and moving to another nearby hospital.

The hospital argued that because the pandemic had created a shortage of healthcare workers, it needed the court to stop employees from leaving at least until it was able to come up with a recovery plan. staffing.

As medical workers burn out, self-isolate due to Covid-19 and leave for other professions, the ensuing staff shortage has become so severe that ThedaCare has turned to the courts to try to solve the problem. It was a stark example of how the pandemic has disrupted the healthcare labor market, putting nurses and doctors in greater demand than ever, even as they face the harshest working conditions. most grueling of their careers.

The workers and the hospital that hired them, Ascension Northeast Wisconsin, countered that ThedaCare could have matched the offers made by Ascension, but did not. By refusing to line up and then not coming up with a plan before the workers left, they argued that ThedaCare was trying to punish the workers for its own myopia.

It appeared for a moment that ThedaCare’s scheme might work: a local judge granted the temporary injunction. But the judge changed course a few days and lifted the order, allowing workers — members of an interventional and cardiovascular radiology team — to start working for their new employer.

Everything was weird. I spoke to several health economists and none of them remembered a situation in which one hospital had sued another to stop its employees from leaving. This goes against the way the United States has set up its healthcare system, which largely treats medical workers as free agents, able to choose where they will work at will. On the contrary, before the pandemic, the opposite happened: Nurses sued hospitals, arguing that they agreed to lower wages.

But the pandemic has changed the dynamic. The demand for health care services has increased significantly, but the labor supply is relatively stagnant. This has allowed healthcare workers to earn better wages, with many moving to mobile nursing agencies that place workers in high-demand areas for wages far above what they would normally earn in a job. standard full-time.

“What we’ve seen is a very rapid shift in the balance of power in hospital labor markets,” Hannah Neprash, a health economist at the University of Minnesota, told me. “It’s a pretty extreme example of a healthcare system acting a bit in the face of this totally disrupted job market.”

Why the pandemic has upended the medical labor market

At first glance, there was nothing unusual about Ascension hiring seven members of ThedaCare’s cardiovascular and interventional radiology team. According to the workers, it wasn’t even poaching; one employee saw the job posting, applied, and received an offer, and other members followed suit because the pay and benefits were better.

But even if they had been poached – suddenly hired by their former employer – that’s how the game is played. Health systems sometimes recruit entire teams because they have built a relationship between them that is essential to good medicine. Hospitals often advertise themselves as having good teams in a specific treatment area — stroke care, for example — and they substantiate claims based on how much experience the workers have together.

“This is by no means a new behavior,” Joanne Spetz, a health economist at the University of California, San Francisco, told me. “Poaching and recruiting full teams happened before the pandemic.”

But over the past two years, when Covid-19 cases have skyrocketed, the demand for medical personnel has also increased. In some regions, the number of jobs for certain specialties, such as intensive care nurses, increased by more than 300% at the start of the pandemic, according to a study on the healthcare labor market during Covid-19.

Even with the skyrocketing demand, the supply of healthcare workers could not keep up. In fact, there was some downward pressure on supply. Many medical workers quit the job in the pandemic, exhausted by the toughest working conditions of their lives. There have also been new restrictions on the migration of medical workers to the United States during the public health emergency, cutting off another source of new workers to meet demand.

As a result, the market had to compensate as best it could. The busiest hospitals were willing to pay the highest rates to meet their demand. Many hospitals have used traveling nursing agencies to meet their short-term needs. Due to this extraordinary demand, these positions have been receive exponentially higher salaries than the typical salary for a full-time job.

“One way to meet this demand is to move temporary workers to where they are needed right now. Wages for these temporary workers have skyrocketed,” Joshua Gottlieb, a health economist at the University of Chicago, told me. “It’s normal supply and demand. In the short term, it’s hard for the quantities of workers to adjust, so prices have to adjust.

This effect has been felt most acutely in the areas of practice most strained by Covid-19 itself: intensive care workers, emergency room nurses, etc. As Gottlieb and his co-author Avi Zenilman noted in the article on labor market elasticity, the pandemic had no appreciable effect on, for example, the salaries of labor and delivery nurses. .

But the pandemic may still have indirectly contributed to the circumstances that led ThedaCare to make such an extraordinary bet to try to keep employees from leaving the Interventional and Cardiovascular Radiology team, which focuses on minimally invasive procedures for patients. heart and blood disorders.

Hospitals have generally done well during the pandemic, Spetz told me. There was a dramatic drop in elective procedures in the spring of 2020, but hospitals were largely able to keep these services running through subsequent waves. The federal government has also provided substantial financial assistance to the industry. This is not universally true – some hospitals have been forced to close due to Covid-19, concentrated in rural areas which were already struggling before the pandemic – but overall the industry hasn’t been as battered as originally feared.

“There are exceptions, but we don’t look at the hospital industry and we don’t say that it is an industry that is in great difficulty,” she said. “It works very well from a profitability point of view.”

But government aid has since dried up, and the omicron variant has put unexpected new pressure on hospital systems, forcing some to cancel or postpone more lucrative service lines again. Hospitals could feel the financial squeeze more than ever, unless Congress appropriates another round of financial support.

And this kind of care — interventional radiology — in particular tends to make money for hospitals, Neprash pointed out to me.

“They do things that are really lucrative,” she said. She wondered what would have happened if the members of the labor and delivery teams or the hospital psychiatric teams, two less lucrative sectors, had gone out. “It would not have jeopardized the income of the institution.”

The bet failed. But that they tried it is just a sign of the times for America’s healthcare system.

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