Thursday, December 7, 2023

Addressing Widespread Financial Insecurity in the Healthcare Industry – MedCity News

Financial stress in the healthcare industry is often overlooked, but affects the entire healthcare organization. The high price of admission to the healthcare profession can create immense financial strain, with most medical professionals taking on the burden of student loan debt to put themselves through school. The American Association of Colleges of Nursing found that graduate nursing students expect to finish school with a median debt between $40,000 and $54,999.

High-earning healthcare professionals aren’t immune to financial struggles either. Financial insecurity is a serious day-to-day struggle for many healthcare workers, even those who are well-paid. U.S. physicians boast a median annual salary of more than $223,000, but over 70 percent of medical students graduate with debt, and 1 in 5 of those students owes more than $300,000. From lab technicians and medical assistants to administrative and custodial staff, healthcare professionals with lower incomes can face even more formidable obstacles. In fact, 71% of emergency medical service professionals are dependent on overtime and multiple jobs to make ends meet. That means that the first person you interact with during a critical emergency is likely teaching CPR classes on the side or picking up shifts in a restaurant just to keep up with their bills.

How financial stress impacts healthcare professionals

Factors such as global inflation and the rising cost of living have contributed to financial insecurity across many pay scales and industries. High levels of financial stress can lead to poor individual outcomes, such as psychological distress and anxiety, and those who struggle with debt are more than twice as likely to suffer from depression. For those healthcare professionals who attempt to work through the stress, administrators may begin to see patterns of poor job productivity, burnout, and worsening patient outcomes.

High levels of stress can also manifest through physical symptoms including headaches and migraines, high blood pressure, and compromised immune systems, physical challenges that put strain on an industry already dealing with critically low retention. For hospital administrators, these individual challenges can lead to high turnover, which impacts the stability of the organization and reduces the number of individuals available to provide high quality emergency care.

Solutions to help financial stress in the healthcare industry 

There are a variety of tools and benefits to address financial insecurity, but many are blanketed approaches. Most of the financial wellness tools and benefits available to healthcare professionals are for those who don’t struggle with day-to-day cash flow. Tools such as 401Ks and FSAs are great for supporting mid to long term financial goals, but are limited in their ability to address short-term personal finances. This has left many professionals to rely on credit cards or predatory payday loans, which can further exacerbate their debt, impact their credit score, and put them in an even worse financial position. Solutions such as faster payments that can instantly compensate professionals for work performed or increase the cadence which they get paid can enable them to pay their bills faster, help them work towards longer-term financial goals, and avoid that “paycheck-to-paycheck” feeling.

Identify solutions for a range of incomes

Workplaces are evaluating the range of offerings based on their workers’ unique financial situations and income range. For low to moderate income workers, one of the biggest barriers to financial security is getting paid on time, leading healthcare companies to evaluate options for accelerating payments.

Instead of pushing professionals to take on credit card debt—especially those living paycheck-to-paycheck they’re looking to increase the frequency of pay for healthcare workers, moving from bi-weekly to weekly or even at the end of each shift. Our research has shown that on-demand pay options can increase retention rates by as much as 37%—and workers are twice as likely to apply for a job if these benefits are offered.

Offer a range of financial benefits that speak to people’s needs

Given the range of salaries and financial needs of workers in the industry, healthcare organizations are seeking to widen their variety of financial tools and benefits. Some of these perks may include:

  • Financial wellness classes: Implement financial wellness programs with education and resources that can help employees manage their finances effectively. These programs can include budgeting workshops, debt management guidance, and retirement planning assistance.
  • Employee assistance programs (EAPs): EAPs offer counseling and support services to employees facing personal or financial challenges. These programs can help employees navigate financial difficulties.
  • Collaboration with financial institutions: Healthcare organizations can partner with financial institutions to offer special financial products or services tailored to the needs of healthcare professionals. This might include low-interest loans, mortgage assistance, or specialized savings accounts.

Provide opportunities to grow their earning potential

Many organizations are adding skills enhancement and career advancement opportunities that can lead to increased earning potential. There are many clinicians who would consider the option to continue their education and earn additional credentials, but who are stymied by financial stress. Offering tuition reimbursement has become a popular way to encourage more talented healthcare professionals to leverage their expertise and seek additional training.

Some healthcare organizations are also providing loan repayment assistance programs as incentives for employees who commit to working in underserved areas or specialties. This can help alleviate the burden of student loans.

Making a difference in the workplace

It’s not just our lowest-paid healthcare professionals who suffer from financial insecurity. From the hardworking custodian to the extremely specialized surgeon, all healthcare professionals should be offered the resources and means to keep up with inflation and financial concerns. We need to address all income brackets and needs to keep the healthcare system performing optimally and patient care at its best.

Photo: Sylverarts, Getty Images

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