Workforce Supply for Hospitals and Health Systems

Workforce Supply for Hospitals and Health Systems
Issues and Recommendations

Developed by the
AHA Strategic Policy Planning Committee

Approved as a statement of interim positions by the AHA Board
of Trustees
January 23, 2001


The contemporary hospital is a community resource organized to care for the sick and injured and improve the health of the population. To perform these functions, the hospital brings together a broad array of skills, collects and stores information, provides equipment and facilities, and organizes systems of work. Critical to each of these tasks is the people who perform them: community volunteers, paid staff, medical staff, and trustees. Thus, hospital care, at its core, is about people caring for people.

Historically, hospitals have fared well in attracting both voluntary and paid staff, even when hospitals were allowed to pay less than the minimum wage. This success was periodically interrupted by short-term shortages, especially shortages of nurses. Now, however, hospitals find themselves facing both immediate and long-term shortages of personnel.

The shortages are not limited to any one occupation. The shortage of nurses has received the most public attention, but hospitals also are experiencing shortages of pharmacists, technicians, technologists, therapists, housekeepers, food service workers, information service specialists, medical record coders, and others.

In some communities, hospitals have also had difficulty attracting primary care or specialist physicians. A shortage of physicians is a genuine problem; however, at the national level it is more an issue of geographic distribution than of numbers. Therefore, this report addresses the non-physician workforce where hospitals are facing shortages in numbers.

Without sufficient numbers and quality of caregivers and support staff, America's hospitals will not be able to meet the growing health care needs of their communities. Because workforce supply has been one of the significant issues facing our members, the AHA's Strategic Policy Planning Committee has taken an initial look at the growing problem of workforce supply.

This report reviews the present workforce shortage, and it recommends actions that hospitals, health systems, and their associations should consider taking to achieve an adequate supply of well trained and competent personnel. One of the issues identified for consideration, the establishment of an AHA Commission on Workforce has already been considered and adopted by the AHA Board of Trustees.

Workforce Supply

Hospitals and health systems have repeatedly experienced temporary shortages of personnel. For example, many of today's senior executives remember nursing shortages in the 1960s, 1970s, and 1980s. Following a number of changes in personnel practices (and often a recession in the general economy), the shortage disappeared in most communities as already trained nurses returned to the workforce and sought positions in hospitals.

Some of the issues underlying today's shortage are traditional ones. The economy has been booming and unemployment is low. Other employers are offering higher salaries and new benefits to recruit workers. Hospitals confront the need to provide competitive compensation in an era of constrained resources. These stresses on workforce supply are ongoing.

But, today's shortage is different. It is more than simply the traditional stresses peaking at a common time. It is the beginning of a long-term shortage. It reflects fundamental changes in the relative attractiveness of careers in hospitals, increased competition from non-hospital employers for caregivers and support personnel, and the aging and pending retirement of "baby boomers."

No longer a Favored Employer

The Board of AHA's American Society for Healthcare Human Resources Administration (ASHHRA) has examined the developing workforce shortage and believes that the attractiveness of careers in health care, especially hospital care has changed in the past two decades. In a single generation, health care has moved from a favored to a less favored employment sector. This insight reflects five observations:

  • In a manufacturing economy, health care was high tech, but in an information economy, young people see health care as low tech.
  • In the 60s and 70s, healthcare was safe, secure, and prestigious employment, but in today's labor market, health care is seen as chaotic and unstable.
  • In a traditional society, health care was one of only a few employment options for women, but in contemporary society, health care is only one of many choices.
  • In a long-stay hospital system, staff had strong, supportive relationships with patients, but in a short-stay hospital system, staff are focused on disease protocols, regulatory compliance, and documentation.
  • In a mass production society where production schedules controlled work hours, the 24x7 demands of hospitals were seen as unattractive, but in an information society where people schedule work to their own convenience, the 24x7 demands of hospitals as seen as unacceptable. The impact of 24x7 is heightened by the presence of short-stay, high acuity patients who place continuous demands on hospital staff for care and support.

The ASHHRA insights have been shared with the AHA Governing Councils for Small or Rural Hospitals, Metropolitan Hospitals, Healthcare Systems, the Committee on Governance (i.e., hospital trustees) and the Committee on Health Professions. All agree with ASHHRA that fundamental advantages enjoyed by hospitals in the past no longer exist in most communities.

The identification and recognition of these changes provide hospitals with the unavoidable requirement to redesign work and workplace environments so that hospitals are offering careers that attract, retain, and develop the "best and the brightest" in adequate numbers.

Beyond the changing career interests of young people and mid-career entrants, changes in education sponsorship may also contribute to reduced interest in hospitals. Historically, many hospitals offered hospital-based training programs in nursing and numerous allied health fields. Training in the hospital, graduates often sought employment at the hospital offering the program. In the past several decades, junior and community colleges have become the primary location for many former hospital-based training programs, and an individual hospital has become one of several clinical sites in the college program. Graduates of these programs often obtain their first position through a college placement office open to many employers.

A Long-Term Problem

The current workforce shortage is not another short-term issue. Hospitals and health systems employ many members of the "baby boomer" generation. This extra large cohort of workers is followed by the "baby bust" generation, a relatively small pool of workers.

The most visible present impact of the movement of the "baby boomers" through their work years is the aging of the hospital workforce. Large numbers of hospitals report the average age of their staff, nurses and others, is increasing. Baby boomers are continuing their hospital careers, but subsequent generations are entering the hospital field in smaller numbers.

The longer-term impact of the movement of the "baby boomers" will come when large numbers are eligible for retirement. "Normal" retirements will begin in 2010. Many in the hospital workforce may not wait for "normal" retirement. The stress--emotional and often physical--of hospital careers is perceived as increasing. Because Individual Retirement Accounts, 401(k) retirement plans, and a strong stock market have provided many staff with unanticipated retirement resources, the opportunity to retire early is available to increasing numbers. Others may partially retire by working part-time rather than full-time.

When the "baby boomers" retire, large numbers of staff will move from employees to Medicare beneficiaries. No longer providing service to patients, they will join the age groups that use hospitals and health systems heavily. Peter Buerhaus, a nursing manpower researcher at Vanderbilt University and formerly at the Harvard Center for Nursing Research, has studied intensively the nursing workforce. Since the 1960s, his findings show that nursing has not recruited an adequate replacement stock for the "baby boomers." In fact, each five year cohort since the 1960s has been smaller than any cohort that preceded it.

To meet the patient needs of a growing and increasingly older population, hospitals must attract an even larger percentage of the smaller "baby bust," Generation X, and subsequent populations than they attracted of the "baby boomers."

Implications for Hospitals and Health Systems

The shortage of staff that hospitals presently face is but the beginning of a long-term challenge for hospitals. The Strategic Planning Policy Committee believes there are seven major implications for hospitals and health systems, plus issues that hospitals, health systems, and associations should consider.

  1. Health care is fundamentally about people caring for people. It is dependent upon appropriate numbers of motivated and well -trained caregivers and support personnel. While electronic and automated systems may change the nature of some work, they will not replace hands-on care.
  2. Given the changes in employment preferences and in career opportunities for women, it is unlikely that the favorable employment environment for hospitals is going to return to the environment of the 1960s and 1970s.
  3. Hospitals leaders must increasingly recognize personnel as a strategic asset, different from, but as important as, adequate payment, capital acquisition, and market share.
  4. New work arrangements require a broader perspective on employee relations to build loyalty and create a sense of stability. Some hospitals have expanded the use of agency and temporary staff to create more flexibility in the staffing complement. Without a more permanent employer relationship, these employees have loyalty to their profession rather than to the organization. Permanent staff, full and part-time, find the work environment increasingly hectic and uncertain. Some are looking to unionization and collective bargaining as a means of increasing their sense of stability.
  5. Educational systems need hospital involvement to help identify skills and capabilities in demand in the labor market.
  6. New technologies which allow staff to emphasize the care-giving and care-supporting functions of their positions are essential for hospitals to attract, develop, and retain employees.
  7. The workforce will only expand if hospitals attract staff from the economy generally. Concerted efforts are needed to increase the attractiveness of health careers relative to other employment options if the health care workforce shortage is to be corrected.

Issues for Consideration by Hospitals and Health Systems

  1. Health care executives and trustees need to adopt a long-term time horizon for workforce supply. To correct the shortage, executives must assure that the hospital has the staying power to focus on workforce for the full education, recruitment, career development and retention pipelines.
  2. Hospital boards and senior management teams need to recognize that the supply, development, and satisfaction of caregivers and supportive personnel is a critical success factor for the organization. Human resource issues are and should always have been strategic issues for the leadership team rather than simply tasks delegated to a functional department.
  3. Hospital leadership needs to consider investing in innovations that establish a competitive, if not preferred, work environment, including (1) information technologies that reduce manual documentation and repetitive administrative task, (2) work schedules that provide more employee flexibility and (3) work roles which emphasize professional competencies and contributions rather than those defined by bureaucracy, administrative procedures, and regulatory requirements.
  4. Increasingly, hospitals and health systems will have to create the capacity to develop the staff skills necessary for their survival.

    Many hospitals have had limited involvement in formal education or career development programs. They have been able to post vacancies and recruit fully trained staff from outside their organization. Clinical and non-clinical education and career development programs that upgrade skills and help personnel transition from one career to another are becoming critical success factors for hospitals and health systems.

    Hospitals have always supported continuing education, especially for physicians and nurses. The emphasis on continuing education and career development opportunities needs to be extended across all occupational groups and deepened. Individual hospitals and health systems may only be able to develop effective programs through collaboration with one another and/or through joint programs with colleges and universities. Hopefully, electronic education using CDs and interactive web courses will lower the cost and extend the reach of continuing education.

    Hospitals need to consider innovations that encourage present staff to obtain additional training and enter new careers in order to facilitate career development, upward mobility, and increased employee tenure.
  5. Hospitals and health systems need to broaden their workforce initiatives to reach populations that have not traditionally been employed throughout health care. Regional initiatives that combine the efforts of multiple institutions are needed as well as individual hospital initiatives.

    In some cases, nursing as an example, the pool of applicants remains primarily female. In other cases, minorities are found only in the lower paying positions. Meeting the workforce challenge will require expanding the pool of interested persons to reflect fully the diversity of our society.

    As society becomes more diverse and patients come from an increasing number of racial, ethnic, and national backgrounds, hospitals need to recruit a more diverse workforce that can readily understand, relate to, and communicate with their patient population.
  6. Despite the economic pressures faced by hospitals, compensation strategies need to be reviewed and evaluated.

    Hospital careers are demanding. Hospital staff care for patients who are scared and vulnerable. Hospital occupations often require advanced education and continuing training. Unless hospitals provide compensation that is comparable to positions with similar education and responsibility, some potential workers will seek other positions. Comparable compensation is a serious challenge to hospitals with revenues limited by administered prices for Medicare, Medicaid, and other patients. The challenge is made more difficult if hospitals engage in "bidding wars" that raise compensation costs without attracting additional staff to the workforce.

    In the past decade, many for-profit businesses have provided large-numbers of employees with stock ownership as a means of attracting, retaining, and improving the productivity of employees. As business increasingly uses stock to compensate employees, non-profit hospitals without the opportunity to provide stock options must develop other benefits and compensation approaches to remain competitive. For example, some hospitals have found incentive compensation programs and "gainsharing" are approaches which appeal to workers.
  7. Hospitals and health systems, individually and collaboratively, need to consider establishing new relationships with school, colleges, and universities.

    K-12 education is the basic building block of the hospital workforce. Unless primary and secondary schools provide students with skills and attitudes necessary to hold jobs and develop careers, employers of all types will face a workforce shortage. As corporate citizens in their communities, hospitals and health systems should consider working with school systems to evaluate and improve performance; assure that students take the language, math, and science courses necessary to have the foundation for health care careers, and assure that career possibilities in health care are given visibility.

    Participation in K-12 education also offers hospitals the opportunity to increase exposure to hospital careers. Fortunately, most young people are healthy and have only limited contact with hospitals. As a result, many do not appreciate the wide range of career interests and positions offered by hospitals. Involvement with school counselors, science fairs, school clubs, and extra-curricular activities offer hospitals an opportunity to increase awareness of hospital careers.

    Many health care careers require post-secondary education with a hands-on clinical training component. Historically, the bulk of clinical training has been provided in a large, but limited number of mostly urban hospitals. Suburban and rural hospitals need to consider expanding their involvement in clinical education programs.

    Experience indicates many residents who leave rural communities for higher education in an urban community will not return to rural areas unless some significant part of their education occurs in rural hospitals. Rural hospitals need to consider developing "distance learning" or "on site learning" centers.

Issues for Consideration by the American Hospital Association

  1. The shortage of personnel facing hospitals now and for the next two decades has received little attention outside the health care system. The AHA should consider establishing a Commission on Workforce for Hospitals and Health Care Providers charged: to develop bold, actionable recommendations that members, the AHA, and society can take to:

    • increase recognition that human resources are a core, strategic resource of hospitals;
    • fully value and invest in workforce recruitment, retention, and development;
    • design work patterns and employment practices attractive to today and tomorrow's workforce while improving performance and productivity;
    • encourage upward mobility in the workforce;
    • make hospitals and health systems "employers of choice."

  2. There is a critical need to develop and test new work designs for both caregiver and support services. This effort will be highly inefficient if individual hospitals and health systems must each develop and test new work designs. The AHA should consider creating a new organization with the primary purpose of developing, testing, and sharing new work designs across multiple hospitals and systems.
  3. Those from outside the hospital are often struck by the "guild" or "silo" structure of the hospital workforce and by the tendency to organize work along traditional patterns.
  4. Licensure and practice acts mirror the guild structure of the health professions and impose restrictions on the mobility of workers. The AHA should consider working with the state hospital associations and with the associations of individual occupations to remove barriers to workforce mobility and to facilitate employment in multiple states.
  5. While new work design approaches are being developed and tested, the AHA should consider using its publications and meetings to highlight successful recruitment and retention practices by members, as well as by other industries.
  6. Hospital associations—national, state, and metropolitan--need to address workforce issues with the same intensity as payment advocacy. In the developing environment, inadequate staffing threatens the hospital's viability as much as inadequate payment threatens its solvency.

While the Health Resources and Services Administration of the U.S. Department of Health and Human Services has recently released state-specific health workforce profiles, much of the data is from 1996-1998. The AHA should consider having the Health Research and Education Trust (HRET) explore the present availability of contemporary workforce data. If up-to-date date is not produced regularly for the wide range of hospital occupations, either as a single or multiple efforts, HRET should consider investigating ways to stimulate and encourage the collection and publications of such data.


Health care is about people caring for people. Therefore, hospitals require large numbers of caregivers and support personnel. The "baby boomer" population entered the workforce at roughly the same time as Medicare and Medicaid were introduced, and many "baby boomers" were attracted to careers in hospitals. Now, "baby boomers" are approaching retirement, new generations have less interest in hospital careers, and the inadequate supply of caregivers and support personnel is raising genuine operational problems.

Hospitals must actively address workforce issues, including work design and the work environment, in order to care for their communities. The Strategic Policy Planning Committee has offered its ideas to encourage dialogue within the field and to stimulate hospital action, immediate and long-term. The Committee welcomes comments and insights from members about the important issue of workforce supply




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