The Healthcare Industry Has a Massive Labor Shortage. Can On-Demand Workforce Services Help?

In a trend accelerated by the COVID-19 pandemic, healthcare organizations across the U.S. are struggling to maintain adequate staffing levels to treat aging populations, while an unsustainable amount of healthcare workers are considering leaving the industry altogether in the face of difficult working conditions, stress, and negative impacts on their mental health.  

It is no longer financial challenges that are keeping healthcare executives up at night. The ongoing and worsening shortage of healthcare workers is the most critical challenge facing healthcare organizations, leading to an overflow of appointments, staff burnout, inefficient processes, stagnated growth, and ultimately a negative impact on patient outcomes.  

The healthcare staffing shortage 

Advancements in medicine means that people are living longer while managing chronic health conditions as they age, leading to a need for highly skilled medical professionals, but the COVID-19 pandemic poured fuel on the fire, leading to unsustainable levels of burnout in the industry. Specifically, 3 in 10 healthcare workers are considering leaving the profession, and 6 in 10 say pandemic related-stress has harmed their mental health and outlook on their jobs. Along with other significant issues, hospitals and healthcare practices across the country are faced with critical staffing shortages. 

Some analysis suggests that hospital employment has decreased by nearly 94,000 since the COVID-19 pandemic began, including a decrease of over 8,000 between August 2021 and September 2021 alone. This shortage is expected to last well into the future, with the demand for healthcare only expected to increase. Because of that, the healthcare industry is projected to add the most jobs of all industry sectors by 2030 at about 3.3 million jobs.  

According to one study, this dynamic will lead to a 2025 healthcare workforce gap of nearly 700,000 by 2025, including more than 446,000 home health aides, 95,000 nursing assistants, nearly 100,000 medical and clinical lab technologists and technicians, 29,400 nurse practitioners and 11,000 physicians and surgeons.  

To make matters worse, in areas with already limited access to quality healthcare, rural areas could see more staffing problems than urban areas, with states such as Utah, Vermont, Tennessee and other locations experiencing higher-than-average shortages in medical professionals per capita due to a lack of available local talent in those states.  

This shortage not only affects hospitals and healthcare systems, but also healthcare education institutions, as nursing specifically struggles to find professionals to educate the next generation of medical professionals the U.S. desperately needs.  

However, it’s not just medical professionals that healthcare organizations are struggling to find right now–it’s also finance department workers, with one in four healthcare finance leaders saying they need to hire more than 20 employees to fully staff their department, according to one recent study.  

At a time when the healthcare industry can’t fill open clinical and nursing jobs, difficulties staffing finance positions and ensuring a stable revenue cycle could spell disaster for healthcare organizations.  

The negative effects of the healthcare staffing shortage 

When any business can’t fill open jobs, performance and efficiencies will suffer, and customers will be left wanting more. In an industry as critical as healthcare, there is no room for simply living with these shortages and the negative impact they cause on the organization, especially as patient volumes remain high.  

One study from the U.S. Centers for Disease Control from September 2021 suggests that healthcare-associated infections increased significantly in 2020 after years of decline, with researchers attributing the increase to labor shortages and the steady flow of patients. This limited hospitals’ ability to follow standard infection control practices.  

The crisis is also threatening to impact patient outcomes, with the number of staff per patient decreasing to less-than-desirable levels. In addition to burnout, healthcare labor shortages have been shown to lead to an increase in errors, higher morbidity, and mortality rates.  

Appointments for new patients are taking more than two weeks on average to schedule, and hospitals are still expecting demand to exceed their capacity in several specialties in 2022, especially in elective care for patients that put off procedures over the last two years.  


However, perhaps the largest negative impact of healthcare’s labor crisis is financial, with hospitals seeing a 37% increase in labor expenses from pre-pandemic levels. The increase is fueled by heightened temporary and traveling labor costs, with contract labor making up 11`% of hospitals’ total labor expenses in 2022 compared to 2% in 2019.  

The healthcare labor crisis and increasing labor costs are projected to decrease operating cash flow up to 9%, according to Moody’s, which gives the healthcare sector a negative outlook in its 2022 credit landscape report.  

With the national shortage of healthcare workers expected to persist for some time as patient demand only continues to rise, healthcare organizations should be doing everything they can to limit the impact to their ability to provide excellent patient care, and ultimately, their bottom line and long-term financial viability.  

The solution: workforce extension services 

For organizations struggling to maintain adequate staffing levels, especially in the finance department, they should consider workforce extension services and augmenting their staff with a dedicated team of professionals to help them support their RCM operations or healthcare IT objectives. This can take the pressure off of the existing RCM staff and allow the organization to prioritize the hiring of skilled medical professionals and technicians.  

While revenue cycle companies already depend on workforce extension services, providers can also take advantage of on-demand staff to help augment their own workers and keep them from burning out due to a heavy workload. As the demand for healthcare continues to rise, outsourcing to a third-party billing expert could be the perfect way to provide top-level services without putting stress on existing operations.  

These outsourced services take routine, repetitive tasks off the backs of existing workers, resulting in an average of $65,000 savings per month and an 80% reduction in cost per billing resource. By partnering with a workforce extension services provider, organizations will become more efficient, see more opportunities for growth, and enhance the patient experience.  

Increased team efficiency 

With a team of highly skilled staff trained in electronic health record systems (EHR), billing, claims, denial management, self-pay eligibility, health wellness check, medical record upload, credentialing, prior authorization, and other repetitive back-office tasks, burnt out staff can rest assured that those critical functions are being handled by an expert team of on-demand workers. 

In addition, workforce extension services can serve as a stopgap during employee turnover, helping the organization to keep its back-office functions as efficient as possible while the next crop of healthcare finance professionals is hired and trained.  

In an industry as regulation-heavy as healthcare, a smooth-running revenue cycle is critical to success, but a burnt-out finance department with a dwindling number of workers will be prone to making mistakes while managing the revenue cycle. By offloading that stress and trusting those duties to a workforce extension provider, staff can focus on improving their own internal processes elsewhere and preserve the organization’s bottom line. When combined with a robust cloud-based RCM platform and robotic process automation, workforce extension services can seamlessly blend into the organization’s processes.  

Opportunities for growth 

With an on-demand workforce that is ready at a moment’s notice to supplement the existing back-office staff, healthcare organizations can grow without having to worry about hiring additional staff and budgeting for salaries, benefits, and workstations. When combined with flexible platform technology capabilities, workforce extension services support the organization’s growth by scaling efficiently to achieve the next level of success.  

These skilled professionals are completely dedicated to administrative tasks and are in lock step with the healthcare industry’s rapid pace of change, removing that burden from the organization and keeping businesses current with regulatory changes. Healthcare organizations that are ready to grow, but aren’t quite ready to expand internally and add team members, can leverage workforce extension services as a way to efficiently scale without breaking the bank and committing to increasing costs.  

Enhanced patient experience 

When tedious, but critical back-office tasks and administrative burdens are handled by a dedicated team of highly trained experts and the RCM process is seamless, the patient experience is immediately enhanced, as medical staff has more time to focus on patient outcomes rather than busy work. However, when that on-demand workforce is combined with robust cloud-based healthcare technology solutions such as an EHR, practice management, and telehealth software, patients get the added benefit of consumer-friendly solutions that enhance their experience even further.  


Workforce extension services can also provide provider credentialing, authorization management, patient collection services, and out-of-network billing to ensure patients get timely access to the care they desperately need.  


Given that the healthcare industry’s well-documented labor shortage is not expected to let up anytime soon, healthcare organizations should begin to think creatively about how to augment their staff to ensure that they don’t skip a beat in what is currently a hectic healthcare climate.  

Workforce extension services can be the answer to those problems and help put healthcare organizations on the right path to efficiency, sustainability, and patient satisfaction.  


Staffing in the New Economy

Keep your staff focused on patient experiences

Download our free e-book

Start typing and press Enter to search