CEO SUMMARY: In Western Tennessee, a seven-hospital rural health system is pulling out all stops to solve the staffing crisis in its laboratory division by implementing programs that address both retention and recruiting. “Bench bonuses,” college loan repayment programs, recruitment bonuses, and shift differentials are just a few of the methods used to attract and keep qualified laboratory technologists.
WHEN IT COMES to having adequate medical technologists to staff the laboratories of West Tennessee Healthcare (WTH), Leo Serrano finds it easy to describe the situation as “acute.”
“It’s been a painful effort to keep our labs fully staffed over the past four years,” stated Serrano. “But the situation really turned grim about two years ago.”
Serrano is Director of Laboratory Services for the seven-hospital system, which is headquartered in Jackson, Tennessee and serves rural areas in the western part of the state. “Currently there is a 15% vacancy factor in our technical positions,” he noted. “This is a direct challenge to our ability to deliver a full range of lab services to our clinicians because we run a very lean operation. The inability to hire enough technical staff for the laboratory has motivated us to become uncommonly creative.”
Serrano reports that, of the 151 hospital-based technical positions in his lab division, there are currently 20 openings. “This number has been as high as 28,” he noted. “So retention and recruitment are high priorities with us.”
Including technical and non-technical positions, WTH’s lab division employs 349 FTEs and performs about 3.5million billable tests per year. Its core laboratory is at Jackson-Madison County General Hospital, located in Jackson. The other hospital labs are supported by limited service labs. Serrano also has lab staff working in clinic labs and physician office laboratories owned by the health system.
When the lab staffing problems became more severe about two years ago, system administrators encouraged Serrano to develop creative ways to retain existing lab staff and recruit new employees.
Insuring Wage Parity
“Our first move was to study wage rates in our region,” recalled Serrano. “Our area is about 80 miles from Memphis, so it was easy to believe that many med techs might leave the rural area for work in the big city. But a study of staffing turnover indicated that was not the case.
“Of the 30 med techs who left our core lab in the past couple of years, only about one-third left the community,” he observed. “Seven transferred to other labs within WTH and almost half, 12 people, stopped working to devote their full energies to raising children.
“Although we weren’t losing people to the metropolitan market, our first strategy was to create a wage differential favorable to us,” said Serrano. “ So, on January 1, 2001, we raised wages by $2.00 across the board. This placed us above the average med tech wage in Memphis.”
Because the lab division at WTH must staff multiple lab locations at odd hours, the next management decision was to create a pay package that would encourage people to opt for second and third shifts.
Second & Third Shift Pay
“We increased the money paid in the following way,” explained Serrano. “For medical technologists with a B.S. degree, second shift differential is $2.00 per hour and third shift differential is $3.00 per hour. For medical technicians, the second and third shift differentials are $1.50 and $2.50 per hour, respectively.
“This has helped us staff these time periods,” he continued. “To further encourage med techs to stay hands-on with testing, we created a ‘bench bonus.’ For anyone whose job description requires them to spend at least 80% of their time at the bench generating test results, we pay an additional 50¢ for each hour worked. This particular incentive has really proven effective.”
Employee retention was the primary objective in the management strategies presented above. In recruiting, WTH recognized not only the need to fill open positions within its various laboratory sites, but the fact that employee demographics would work against staffing goals as time passed.
Median Age By Department
“We looked at the age of our staff by departments,” commented Serrano. “In histology, toxicology, and the core lab, median age ranged between 41 and 43. Staff in blood bank and micro- biology had the youngest median age, under 40.
“These demographics encouraged us to identify two strategic goals. First, we want to maintain an active recruitment program,” he offered. “We want the community to know there are good opportunities available in our laboratory division. This will help us fill openings in years to come. Second, we want to encourage our existing people to develop their professional skills. That also has long-term benefits to our lab staffing needs.”
The obvious method to make recruitment more attractive was to offer signing bonuses, which WTH does. But the other method is a generous, but unorthodox, opportunity.
“Our recruitment bonus is $5,000 for a third shift hire and $3,000 for a second shift hire,” Serrano stated. “For new hires accepted in our student loan forgiveness program, at the end of the first year, WTH will pay down $3,000 of the student loan. For each year of employment completed thereafter, WTH will pay the student loan down by an additional $3,000. The maximum amount that can be earned in this program is $20,000.”
Of course, WTH offers scholarships and financial assistance to existing lab employees. “This is an ongoing benefit within our health system,” Serrano said. “It’s been paying dividends for the lab. In the past year, five of our MLTs earned Bachelors’ Degrees. We also have four non-technical staff enrolled in the two- year clinical training program.”
Creativity in Med Tech Recruiting and Retention Supported by Health System Administration
IT’S NO ACCIDENT that the laboratory division of West Tennessee Healthcare (WTH) has such a creative menu of pro- grams for recruiting and retaining trained laboratory technical staff. System administrators and lab directors have a close working relationship.
“Our administration understands the essential role of laboratory testing,” said Leo Serrano, Director of Laboratory Services at WTH. “They know we must have the staff to do the work and they get credit for the unique management environment we have here. They tell us to be innovative on staffing issues and they are willing to fund these programs.”
Serrano admits that he always has an eye out for good ideas and borrows freely. “We’ve taken many of our ideas from the nursing department,” he explained. “Nurses are very visible in a hospital. Everyone, including the patients, sees the nurses. So nursing usually gets lots of support when it comes to retaining staff and filling vacant slots.
“But unseen personnel in the hospital, like laboratory staff, usually don’t get the same type of incentives as does nursing,” he continued. “It is a testimony to our administration that they are willing to extend similar recruitment and retention incentives to our laboratory.”
“Recruitment bonuses come from the health system’s human resources budget because there are many positions outside of laboratory services that offer similar bonuses. Scholarships and student loan redemptions are paid out of the laboratory division’s budget,” commented Serrano.
The budget impact of these retention and recruiting programs illustrate how the economics of lab medicine are changing. “For 2002, the lab division’s labor costs are 5.5% over budget,” observed Serrano. “Compared to the previous year, our labor costs are up 8.8%.”
According to Serrano, cost of technical labor is up 12% over the previous year while clerical labor increased only 3.7% and lab management is actually 15% under this year’s budget.
“We know the extra spending affects overall laboratory costs,” he added. “But administration has made it clear that the strategic priority is to maintain the staffing levels necessary to deliver the targeted menu of lab testing services. It’s a quality decision and the economic impact is assessed in the context of the health systems’ needs.”
Serrano’s comments show how the value of lab testing to an integrated delivery network (IDN) is changing the way administration supports its laboratory division. In recent years, lab administration moved aggressively to implement several management strategies simultaneously. There has been the creation of a core lab and consolidation of testing. Instruments and tests have been standardized across the seven hospitals, as has LIS and information system capabilities.
“You name it, we’ve tried it!” he exclaimed. “We are flexible, innovative, and will consider any reasonable approach to match people’s work preferences with our staffing needs.”
A thriving lab testing outreach program has generated steady increases in specimen volume. This has not only brought in additional revenue, but has allowed Serrano and his executive team to reduce the year-to-year increase in average cost per test for hospital inpatient work.
“Throughout this period, we’ve been dogged by unfilled technical positions,” noted Serrano. “Despite our successes in many operational areas, unfilled technical positions are always a major limiting factor in our planning.”
Still Have 15% Open Slots
A lab automation project was implemented in the core lab following consolidation. One of the major goals of the automation was to free up med techs for assignment to other duties. “We implemented task-targeted automation solutions,” Serrano said. “It allowed us to reallocate 11 FTEs. In a lab our size, that was a major gain. But even after that success, we find ourselves with a 15% vacancy factor for technical staff.”
Another strategy Serrano’s team uses is flex-time scheduling. The lab has offered 10-hour and 12-hour shifts, as well as 3-day and 4-day schedules. “You name it, we’ve tried it!” he exclaimed. “We are flexible, innovative, and willing to consider any reasonable approach to match people’s work preferences with our staffing needs.”
The experience of West Tennessee Healthcare is increasingly shared by other labs around the United States. Although some metropolitan regions still report adequate numbers of med techs, there are a growing number of cities where the shortage of trained technical lab staff is acute—and increasing.
It is a lab industry problem without a lab industry solution. At WTH, both health system administrators and the lab director have acknowledged the problem, made fixing it a priority, and backed this organizational goal with an increased budget to both hire new lab staff and retain the existing team.
Substituting For Lab Labor
But few laboratories, and even fewer hospitals, are either willing, or have the financial resources, to match the willingness to be creative and spend extra dollars to maintain lab staffing at desired levels. Most likely, the market will respond to this situation by developing “labor substitution” options for lab testing.
This can already be seen in the steady flow of new products from the diagnostics manufacturers. These pro- ducts have one thing in common—they require less technical labor to accomplish the same amount of work, and, in some cases, can improve the quality of the testing performed.
THE DARK REPORT predicts another source of “labor substitution” in the laboratory will be POCT solutions that move testing outside the core lab, to be performed by other types of healthcare professionals.