Reimagining the Healthcare Labor Pool Through Innovation

The historic talent shortage facing healthcare organizations won’t get better anytime soon. A combination of demographic shifts and increased pressures on workers post-pandemic are creating a tsunami that is reducing the supply of available healthcare professionals rapidly.?

The timing couldn’t be worse, with recent trends showing an increased demand for care. Without radical innovation, the labor shortage will only worsen over the next decade, with devastating impacts on patient access and outcomes.?

These market forces offer an opportunity to build technology solutions that enable health systems to leverage their resources as effectively as possible across staff retention, recruitment, onboarding, training and documentation.

Trends causing the imbalance of supply and demand

According to the Bureau of Labor Statistics, openings in healthcare occupations are expected to grow by 15% from 2019 to 2029 , much faster than the average for all occupations. However, current labor trends make it unlikely that there will be a sufficient pool of available talent large enough to fill these roles.

The resulting staffing gaps will cut across nearly all occupations. The Association of American Medical Colleges estimates that the total physician shortage will range from 38,000 to 124,000 professionals by 2034. Similarly, experts predict a shortage of 160,000 registered nurses and licensed practical nurses by 2030.

Trends driving the staffing shortfalls include:

• An aging clinician workforce. Nearly 45% of doctors are older than age 55, and more than 40% of active physicians will be 65 or older in the next 10 years. Nearly 40% of RNs are over age 50.
• Burnout and stress. Levels of burnout continue to rise, with physician burnout reaching a record 53% in 2023 . Furthermore, some 900,000 RNs are expected to permanently leave their roles if workplace-related stressors aren’t alleviated.
• Insufficient educational capacity. Medical schools, nursing schools and residency programs struggle to meet the growing demand for new healthcare professionals and turn away many prospective students.?
• Geographic disparities. Rural and underserved areas often lack healthcare professionals, as many prefer to practice in urban or suburban settings.

Simultaneously, these trends are driving increased healthcare demand and utilization:

• An aging U.S. population. The number of people over age 65 in the U.S. is expected to double between 2000 and 2030. These individuals account for twice as many physician visits as people under age 65. They also experience far higher rates of cancer and other conditions that require high-intensity clinical care.
• Site of care shifts. As healthcare expands into virtual modalities, outpatient settings, home care and schools, the competition for services and labor grows more intense.
• Clinical and technological innovation. Advances in medicine create promising new treatment modalities. But deploying and managing each one effectively requires additional clinical labor. At the same time, a rise in healthcare startups and the proliferation of nontraditional bedside roles is spreading the existing talent pool even thinner.

How innovation can balance healthcare labor supply and demand

To solve the industry’s labor shortage, we believe innovation must focus on two areas:

1. The healthcare labor pool must be reimagined and expanded. This will require innovation to happen on two fronts:

• Upleveling, or pushing providers to operate at the top of their licenses and/or giving them the time they need to focus on complex work
• Expanding care teams to include new provider types, such as health coaches, complementary and alternative (CAM) providers, and lower-skilled specialists capable of managing specific patient populations

2. Stakeholders must prioritize staff augmentation and support while optimizing and streamlining workflows. This renewed emphasis on increasing clinical workforce productivity and decision-making is crucial to reduce healthcare providers’ administrative burden, increase time spent at the bedside with patients and invest in the well-being of healthcare professionals.

Developing solutions to meet these two challenges head-on

Redesign Health is committed to developing a broad range of Operating Companies that will help organizations tackle the healthcare shortage and mitigate its impacts on patient care.?

To reimagine and expand the healthcare labor pool, we are focusing on:

• Hire-train-deploy models to rapidly increase the supply of clinical labor in categories that require less intensive training and certification. Doing so will help bring relief to clinicians with more advanced training.
• Solutions to attract and retain a diverse workforce that create pipelines for underrepresented groups. The benefits of this approach are twofold: increasing clinical labor supply while also addressing health disparities by engaging patients with a more diverse clinical workforce.
• Data-driven personalized learning pathways and competency documentation tied to individual career trajectories and health system demand. These solutions will fill clinical gaps and reduce turnover.

To drive workforce augmentation and efficiency forward, we are focusing on:

• Systems and processes, particularly leveraging generative AI, that will reduce clinicians’ administrative tasks and free up their time and mental energy for the direct provision of patient care.
• Decision support tools that enable faster, more accurate and more patient-centric clinical interventions, up to and including care delivered by informal caregivers, community organizations and even patients themselves.
• Telemedicine and remote patient monitoring solutions that increase clinical workforce productivity while enabling care access in areas with clinician labor shortages.
• Technologies to support the unique challenges of delivering care at home.

Due to the acuity of the current supply-and-demand imbalance, healthcare stakeholders are already spending a lot of money triaging upstream issues such as employee recruitment and retention, and this will remain a priority for years to come.?

That said, we believe the second wave of innovation will see companies addressing downstream issues, such as training and clinical skill development for newly matriculated nurses who are transitioning to bedside care.?

Our research suggests that the average level of experience of a 12-hour bedside nurse has fallen from about seven years pre-pandemic to three years today, raising the risk for medication errors and other adverse events. What’s more, a shortage of nurse preceptors means fewer staff are available to train these newer nurses. Therefore, great opportunity exists in building solutions that can help nurses with two to three years of experience close the knowledge gap efficiently and effectively.

Launching stealth companies to make a meaningful impact

We have built two exciting stealth Operating Companies that we believe will help providers, payers and ultimately patients by reimagining the healthcare talent pool and optimizing workforce efficiency.

StealthCo1 is an enablement platform for provider organizations that improves clinician workforce visibility, addresses turnover risk proactively, and mitigates the costs and disruption of turnover for revenue-generating professionals. This will help provider organizations prevent and manage clinician turnover, a problem that can cost $200,000 to $3 million per clinician. It will also help reduce internal and external stressors that are causing high rates of burnout and depression among clinicians.?

StealthCo2 is a utilization management (UM) workflow automation solution designed to expedite and enhance the quality of UM determinations for health plans. While several existing solutions target efficiency at the point of a UM request submission, a sizable portion of reviews still require manual intervention. This solution is poised to transform the space by centralizing and synthesizing disparate data sources to improve the speed, quality and overall efficiency of clinical determinations.

Compiling an ecosystem of solutions to mitigate staff shortages

These two stealth companies join an existing ecosystem of successful Operating Companies developed by Redesign Health to address critical staffing shortages. These companies run the gamut of staffing, practice outsourcing, staff augmentation and decision support:

Final thoughts

Sticking to the status quo will not get health systems out of the staffing crisis. It’s time for radical innovation. We see tremendous possibilities for investing in solutions that expand the healthcare labor pool and drive workforce efficiencies—allowing health systems to maintain the proper staffing levels that are imperative for high-quality care.