NEW YORK (Reuters) - HCA Healthcare (HCA.N) is raising the stakes in a fiercely competitive labor market, pledging $300 million for employee benefits that are largely designed to attract nurses, company executives told Reuters.
The nation’s largest publicly-traded hospital chain said in January that it would invest much of its windfall from a U.S. tax overhaul to offer tuition reimbursement, student loan repayment and extra family leave to all of its employees in the next three years.
Company officials provided Reuters with new details on their spending plans, saying a top priority of the program is to keep nurses in its wards. The retention push is vital to HCA plans to grow in states like Florida and Texas, and comes as a worsening labor shortage forces U.S. hospitals collectively to spend billions of dollars more on nursing staff.
A generation of Baby Boomer nurses are retiring, while younger staff can choose from many job opportunities outside hospitals that offer higher salaries and better hours.
HCA and smaller rival Tenet Healthcare (THC.N) are particularly vulnerable in fast-growing Texas and Florida, where up to 40 percent of nurses will retire in the coming years, according to healthcare worker groups. Half of HCA’s hospitals are located in those states and account for 48 percent of revenue.
HCA faces stiff competition for these nurses, however. Reuters interviews with more than a dozen rival hospitals in those two states found that many already offer similar benefits to what HCA plans to introduce.
“What we are trying to do is become the employer of choice,” Jane Englebright, HCA’s chief nursing executive, said in an interview. “Investing in nurses pays dividends in so many ways. This additional funding coming our way is allowing us to take this to a new level.”
HCA has already worked to reduce use of more expensive contract nurses and rates of nurse turnover, which hit 22 percent in 2016 and is now closer to 17 percent.
But some Wall Street analysts worry HCA will face rising costs as the labor shortage intensifies in the next three to four years.
“Are they going to start offering more, and will that hit their margins?” said Michael Newshel, healthcare analyst at Evercore ISI.
HCA is viewed as one of the strongest for-profit hospital operator in the country. Seeking new growth, the company plans to spend $10.5 billion in the next three years to expand and upgrade its facilities. Keeping them adequately staffed with nurses is key to that expansion.
In January, as it devised the benefits plan, HCA surveyed millennial nurses, who account for almost half of its 87,000 nurses. Their answers on workplace priorities helped shape the benefits most likely to help nurses, such as reimbursing up to $5,250 in employee tuition annually and covering certifications for nursing specialties, such as surgery.
Until now, such benefits had been offered in a limited number of HCA hospitals, to a small group of employees.
For example, about 1,100 HCA nurses last year received specialty certification after passing the relevant exam. Englebright expects that number to triple now that HCA will cover study materials, exams and certification dues.
Millennial nurses also requested additional training, equipment, advancement opportunities and a voice in the organization, Englebright said. One of HCA’s responses is to build 13 new centers to provide recent graduates with hands-on training. It currently has one such training center.
Englebright said that other benefits and policies are meant to convince late-career nurses to delay retirement, such as paying college tuition for employees’ children and offering less physically demanding work in call centers.
Many hospitals have offered some of these benefits for a while now. About half of nurses are offered educational funds, according to a survey conducted last summer by American Nurse Today, the journal of the American Nurses Association.
Tenet offers tuition assistance and signing bonuses of $10,000 to $15,000 for experienced nurses in some locations, including Florida. One-time bonuses can be as high as $25,000 in places where competition is fiercest, such as California, the company said.
In Texas, Baylor Scott & White, the largest not-for-profit hospital network in the state, has been focusing on the shortage for years, providing tuition reimbursement of up to $5,250 to more than 2,000 nurses last year. Many organizations cap the tuition at $5,250, the maximum benefit before an employee would pay tax.
A decade ago, Ashley Kent, 33, decided to work there as a patient assistant because of such benefits.
The program allowed her to complete a nursing degree in 2014. Now a manager, Kent is scheduled to graduate in May with a masters degree, which the hospital also helped pay for.
“I didn’t have parents who could help support me through college,” said Kent. “I knew I was paying for it myself out of pocket.”
Reporting by Jilian Mincer; Editing by Michele Gershberg and Edward Tobin