By Rose O. Sherman, EdD, RN, NEA-BC, FAAN
Business has never been better in health systems. Patient volumes have remained high with no expected decrease in demand anytime soon. The irony in healthcare is that while business may be great, costs continue to rise that can’t be transferred to payers or individual patients. Reimbursement can become more challenging, and patients will continue to receive care in many situations, regardless of their ability to pay.
As I present around the country, nurse leaders are telling me that their health systems are facing some very tough financial and political headwinds, some of which were not anticipated when they planned for 2025. These challenges include the following:
- Loss of Medicaid dollars
- Lowered Medicare reimbursement
- The impact of tariffs on supplies, equipment, and pharmaceuticals
- Loss of research dollars and indirect costs from grants
- Political uncertainty about healthcare funding
- Rising levels of unemployment and loss of insurance
- Loss of federal supplementary funding on health exchanges
Wise nurse leaders confronted with these realities recognize that they must be proactive in their planning. If they wait for the inevitable cuts to happen, they risk having to make even steeper cuts more abruptly. Estimates I have been given indicate that the reductions may warrant a reduction of between 2.5% and 5% in the number of employees.
Initially, many of the cuts came at the expense of support services; however, now nurses in non-direct care positions are also being impacted. Some of those involved are long-term employees who have been tremendously loyal to their organizations. The whole process is painful and seems very unfair. There is so much uncertainty. For those who lose roles, it can seem very personal even when it is not. For those who shift to other roles, it sometimes involves a loss in status and compensation. Either way, there is grief.
Part of the role of being a leader is to frame what is happening for the staff. This is extremely challenging right now because the workload continues to increase, and those who are laid off are often in key support positions. Their loss makes the jobs of those who remain even harder.
Nurse leaders must discuss openly with staff the implications of developments in the policy arena and their impact on their health systems. Most nursing staff have little or no knowledge about healthcare reimbursement and financing. They assume, as would most outsiders, that if beds are full and the demand is high, then the environment is fiscally stable, when nothing could be further from the truth.
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