How health systems and educators can work to close the talent gap

| Article

Every patient who engages with a health system has a team of healthcare workers supporting and administering care, whether in hospitals, clinics, ambulatory surgery centers, or other settings. Attracting enough qualified employees in nursing, allied health, and many other roles has posed a meaningful challenge for the healthcare sector since before the COVID-19 pandemic.

Resignations among healthcare workers have increased steadily from about 400,000 per month in 2020 to nearly 600,000 per month in May 2023.1 The vacancy rate—the difference between the number of job openings and hires—has also increased during this period, with about 710,000 vacant positions as of May 2023 (down from a high of more than a million in December 2022).2 Other factors compound the challenge, including workforce demographic shifts and changing care needs.

Attracting enough qualified employees in nursing, allied health, and many other roles has posed a meaningful challenge for the healthcare sector since before the COVID-19 pandemic.

Health systems could take a decade or more to make the adjustments needed to address some of these pressing workforce challenges. Moreover, reskilling and upskilling can help build workforce resilience and job security (for example, by avoiding obsolescence as automation takes over roles) while ensuring that skills align with employers’ evolving needs. In the meantime, the US healthcare sector is facing multiple headwinds that threaten affordability, access, and industry economics.3The gathering storm in US healthcare: How leaders can respond and thrive,” McKinsey, September 8, 2022.

Health systems are actively designing and planning for workforce models that are more sustainable, including by innovating care models, increasing the use of technology, and boosting efforts to attract, recruit, and retain workers.4Care for the caretakers: Building the global public health workforce,” McKinsey, July 26, 2022. They are also becoming more involved in efforts to expand the pool of qualified talent in nursing and allied-health professions through education. These efforts can take many forms but can be clustered broadly into three models: health systems creating or acquiring their own education entities, health systems and educational institutions creating equal partnerships to educate the workforce, and health systems partnering with education providers to develop (at least in part) the talent supply they need.

This article explores workforce shortages in healthcare, describes the three educational models, and examines five design elements that could improve the likelihood of success, regardless of the chosen model.

The challenge of securing essential healthcare talent

The workforce shortages confronting health systems executives are well documented.5Nursing in 2023: How hospitals are confronting shortages,” McKinsey, May 5, 2023. Aside from baseline demographic shifts (even the youngest baby boomers are nearing retirement age), challenges associated with the COVID-19 pandemic prompted workers, especially women, to leave healthcare in droves.6Women in the healthcare industry: An update,” McKinsey, March 30, 2023. Moreover, a McKinsey survey of nurses found that more than 30 percent are thinking of leaving direct patient care, even though they find the work meaningful.7Surveyed nurses consider leaving direct patient care at elevated rates,” McKinsey, February 17, 2022. Along with higher attrition, health systems are having great difficulty finding qualified individuals to backfill those roles.

These severe labor supply constraints come at a time of accelerating demand for care because of an aging population, rising disease burden, exacerbated chronic conditions, and worsening mental health, among other factors. We project there will be one million additional nursing care jobs by 2031, primarily for certified nurse assistants, outpacing the number of individuals expected to complete degree programs based on current capacity.8 Yet across the United States, educational institutions lack the capacity to close the gap (exhibit).

The projected educational pipeline is expected to fall short of meeting increased demand for qualified healthcare professionals.

Against this backdrop, health systems are thinking more strategically about the broader healthcare workforce pipeline, including by expanding their engagement with education providers. But these efforts are frequently unproductive and fall short of achieving the desired objectives for either entity. Health systems report a shortage of graduates in multiple professions, graduates who are not sufficiently productive in their early months of employment, and an overall system that fails to attract individuals to healthcare professions.9 Education providers report a shortage of clinical-rotation seats, challenges in securing qualified faculty, challenges in identifying sufficiently qualified and interested applicants, and an unfavorable financial structure in which many programs are net negative.10

Varied educational models based on participants’ strategic priorities

Many health systems leaders are considering three models to address the talent shortage.

Health systems creating or acquiring their own education entities

Some health systems choose to build or acquire a new entity and create their own proprietary program and curriculums. Of the three models, this one requires the largest investment and strategic focus. For example, Kaiser Permanente opened its own medical school to train future physicians and healthcare leaders using its team-based approach.11 Additionally, HCA Healthcare acquired a majority stake in the Galen College of Nursing in 2020.12

This model is characterized by a focus on meeting the health system’s own workforce needs. In doing so, health systems are effectively running educational institutions. Each has a chancellor or president and a separate physical space or a campus. They compete with other educational institutions for students, face the same requirements for accreditation, and are subject to rules similar to those of other education providers.

To accomplish its goals, the health system offers highly customized programs, including microcredentialing,13 that align with the health system’s professional-development pathways. From a recruitment standpoint, this approach can be effective at attracting entry-level employees who can then progress in their careers to perform higher-skilled jobs. For example, a system could create an “imaging technician” program track that allows an individual with a high school degree or GED credential to complete an associate-level degree in nuclear-medicine technology, a profession that’s in high demand at many health systems. This pathway allows the employer to focus primarily on professions in which demand is great enough to justify the needed investments in curriculums and faculty while still providing the opportunity to engage in other models for low-volume demand.

Although health systems could diversify their portfolios into the education arena and train graduates for other health systems as a revenue-generating opportunity, they rarely do. Some believe this is a deviation from their core mission that dilutes their distinctive proposition and competitive advantage.

Health systems and educational institutions creating an equity partnership

Alternatively, health systems may choose to develop education programs through a joint venture with an existing postsecondary-education provider. For example, CommonSpirit Health and Global University Systems created a joint venture to provide online degrees and leadership training to clinical and nonclinical health professionals.14 The joint investment in program development and operations demonstrates the commitment of both entities. This model offers the additional benefits of customization based on health system needs. The health system can make use of the education provider’s existing programs, resources, and competencies—including faculty, curriculums, assessments, enrollment protocols, and tuition and fee collection systems—while remaining focused on its core mission.

Health systems partnering with vendors to administer education

To promote educational advancement among workers without getting directly involved, a health system could pursue partnerships with education providers or education technology platforms such as Guild Education that aggregate online courses to curate specific programs. For example, Community Health Systems partnered with Western Governors University as its preferred education provider in exchange for discounted tuition rates for its employees.15 This model provides health systems with access to the full breadth of existing education programming and the ability to customize, particularly in cases in which the partnership is well established.

The value in partnerships for different stakeholders

Partnerships between health systems and postsecondary institutions can create substantial value beyond what each entity brings to the table, including in education quality, graduate preparedness, and the relationships that can result among students, health systems, and schools.

The value for health systems

Studies have shown that employees who use education benefits are more likely to stay with their current employer than those who do not.16 Education benefits can also help health systems more effectively compete in a tight labor market. Enrollees of corporate higher education programs are more than 80 percent more likely to recommend their employer to others.17 One LinkedIn study revealed that companies can lower the cost of recruiting and retaining workers by investing in their employer brand.18

Additionally, education is often connected with a more engaged and productive healthcare workforce. Workers who feel their employer is invested in their long-term success are less likely to disengage. Research shows that productivity among highly engaged teams is 14 percent higher than that of teams with the lowest engagement, and employees who are not engaged cost their company the equivalent of 18 percent of their annual salary.19 Moreover, continual advances in medical technology have translated to a need for a nimbler and more advanced workforce. Boosting the skills of current employees and training them to perform new roles is more efficient and cost-effective than recruiting external talent.

The value for postsecondary-education providers

Higher education institutions derive value from a health system partnership through the following channels:

Access to clinical rotations for students. In most health professions, guaranteed, high-quality clinical rotations for students are both highly desirable and difficult to secure. Increased access to clinical rotations through a health system partnership could ease a large burden for higher education institutions and serve as a differentiator to attract potential students.

Access to a large pool of prospective students. Health systems could provide access to thousands of healthcare workers seeking educational advancement to boost their credentials or qualify them for other roles. A steady influx of students over a multiyear period could provide educational institutions with financial security in an increasingly competitive industry and help them shift their focus from recruiting to curriculum development and instruction. Moreover, students could gain access to programs that lead to careers they may not have known about.

Improved postgraduation outcomes. In general, better alignment between curriculums and workforce needs leads to better employment outcomes for students. There is a large gap between what students learn in healthcare education programs and the abilities employers are looking for in new hires.20 Health systems can provide input to shape curriculums to meet their specific needs, thus enabling graduates to maximize their potential for employment success—more job offers, improved retention, and continued growth—and creating a virtuous cycle of upward mobility.

In 2019, INTEGRIS Health partnered with Southwestern Oklahoma State University to establish tuition support for first-year nurses.21 Licensed vocational nurses employed by INTEGRIS Health are eligible for tuition support and can work while taking classes. Upon completion of the program, participants transition to roles as registered nurses.

The value for communities

Partnerships between health systems and postsecondary-education providers could create value for individuals and communities. They could improve access to care, promote economic growth and vitality within communities, create more professional and higher-paying jobs, and pave career paths for the next generation of healthcare workers.

Educational partnerships also create opportunities for entry-level workers to gain critically needed and specialized skills so they can transition to in-demand careers in nursing and allied health—a financially advantageous career path. For example, the median salary for healthcare support occupations (such as home health and personal-care aides, occupational-therapy assistants, and medical transcriptionists) that require minimal educational requirements and credentials is approximately $30,000, compared with $48,000 for licensed practical nurses, $62,000 for respiratory therapists, and more than $77,000 for registered nurses with bachelor’s degrees.22

Additionally, historically marginalized people make up a disproportionate share of entry-level clinical and nonclinical workers in health systems.23 Training these workers to perform higher-skilled jobs is one way to address long-standing racial inequities in healthcare pay and career trajectories. For example, many minority candidates see the licensed practical nurse (LPN) role as an entry point into clinical care because becoming an LPN is comparatively faster and cheaper than the more advanced credentialing necessary for registered-nurse (RN) licensure. Twenty-five percent of LPN positions are filled by Black women, compared with just 10 percent of RN positions.24 The compensation differential between the two roles is also sizable, with LPNs earning just more than 60 percent of an RN’s annual salary on average.25 Health systems can use education partnerships to help more LPNs train for and advance into RN roles.

Last, using partnerships to secure needed talent will likely expand healthcare access, which could disproportionately benefit underserved communities. According to the Agency for Healthcare Research and Quality, substantial disparities in access to healthcare exist throughout the United States but especially in rural states, where labor shortages are most acute.26 And despite gains in insurance coverage in the past few years, disparities persist: nonelderly Native American and Hispanic people have the highest uninsured rates, at 21 percent and 19 percent, respectively.27 With improved labor supply, severely underserved areas and populations would be more likely to receive care.

Five design elements that characterize successful partnership models

Based on our experience, reviews of partnerships, and interviews with stakeholders, we have identified five elements of effective education partnerships.

Education is designed to help students get a job and succeed in it. For health systems, ensuring that employees are ready on day one is a primary objective of any education partnership. This can be accomplished by collaborating to develop programs and course curriculums that provide the skills needed for proficiency in specific roles. Where possible, it can also be beneficial for the health system to play a direct role—for example, by offering clinical rotations, having staff serve as faculty, and participating in career days.

Job demand regularly informs education pathways. As labor markets shift, health system partners need to continually reassess their education programs. Optimal program choices typically mirror roles in highest demand within the health system in a specific geographic region. The most valuable partnerships go beyond providing a single certificate or degree: they support lifelong learning, retain a record of all learning completed, and promote career advancement.

Programs are accessible to a broad set of students. A successful partnership requires a clear path to recruiting and enrolling students as well as a differentiated value proposition compared with competitors. Moreover, the entry-level nature of many of these professions highlights the importance of a support system to help students navigate the demands of the educational system and transition to employment. This support system can be part of the education institution’s offering or available through a third-party collaborator that is equally committed to the outcomes of the program.

Education is affordable for students and financially sound for partners. Partnerships between health systems and educational institutions need to be financially sound for all stakeholders, including prospective students. To minimize the financial burden on students, educational institutions could create affordable programs and health systems could fund a substantial portion of the cost.

Partners make a long-term commitment. Partnerships require energy, commitment, and investment in resources. Partners can clarify their expectations up front to avoid disconnects that can strain relationships. For example, educators can explicitly state their expectation that the health system will support them with clinical rotations, faculty, and preceptors. Having aligned on objectives and priorities, the partners can take steps (for example, writing contracts and setting up a governance structure) to support their long-term mutual goals.

Addressing current labor challenges in healthcare and laying the foundation to collaboratively develop a more diverse and equitable workforce to meet future demand are dual imperatives. As health systems and postsecondary institutions consider partnership opportunities, they can bolster the likelihood of success by understanding workforce needs and the value at stake, choosing a partnership model that aligns with the health system’s priorities, and leveraging existing workforce development initiatives and affiliated stakeholders.

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