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Ballad Health investing $10 million in pay increases for key frontline nursing team positions

Friday, May 10, 2019

Ballad Health investing $10 million in pay increases for key frontline nursing team positions

The following email was sent to all Ballad Health team members on May 6, 2019, the first day of National Nurses Week, from Alan Levine, president and CEO of Ballad Health:

Good morning!

As we begin the celebration of National Nurses Week this week, we reflect on the birthday of Florence Nightingale – the legendary nurse who was known, in part, for making the rounds at night to treat wounded soldiers, shining her lamplight to see her patients. Today, for reasons I am going to share here, we are taking a moment to re-shine that lamplight on our nurses and those who support them in the provision of patient care.

Our nurses and those who work with them in the provision of direct patient care are heroes. Each of us does important work, and that, no doubt, is an important fact. Our amazing nurses would be the first to say they could not do their work without all the people who make a hospital or health care facility operate. And that is part of the humility that makes them great servants. However, it is also true that in an environment where we face a significant national shortage of these critical healthcare providers, a shortage so significant that the productivity of our nurses and direct bedside caregivers is as high as it has ever been, it is important we appropriately recognize the sacrifice that is being made.

On behalf of the Board of Directors of Ballad Health, I am pleased to announce that we will be making a major investment into our nursing program, with an annualized increase in our direct patient care nursing and supporting staff wages for the following positions: Acute care RNs, LPNs and nursing assistants in select roles whose primary responsibility is providing direct inpatient care; scrub techs, long-term care LPNs and CNAs, clinical LPNs and certified medical assistants and behavioral health techs. These areas of focus have been most impacted by the national shortages of health manpower, and have consistently shown the greatest number of vacancies throughout the nation, and certainly our experience is no different here. We compete heavily for these professionals and must continue to do so.

The pay increases for existing team members in these roles will take effect June 23. Also beginning June 23, the starting hourly rates for new hires in these affected positions will be increased. New hires in these positions who start between now and June 23 will start at today’s rate and be increased to the new rates on June 23.

I know if you occupy one of these affected positions, you will have questions about how this impacts you individually. Over the course of the next six weeks, our Human Resources leadership will be working with nursing leadership to finalize the specific details of how this increase in pay will be deployed for each affected team member. You will hear directly from your managers, but please know, they are not in a position to give you details today. The details will be shared with you individually as we finalize the process for deployment of the wage adjustments.  This will be done over the next six weeks prior to the June 23 effective date. 

This is an annualized incremental investment of $10 million into our nursing programs.

There are a couple of major reasons we are able to take this action, and I will briefly describe them here.

Because of the work that has been done by Ballad Health to reduce unnecessary duplication of services, leading to elimination of wasteful spending and improvement in productivity, we have been successful in turning prior year operating losses from what were two independently operating rural health systems into operating gains by our new, merged health system. Our board of directors has determined that our direct bedside nursing and associated caregivers, who have been impacted by the national shortages for these positions, have seen significant increases in productivity tied directly to these shortages. Thus, the investment into these impacted positions is appropriate.

The Trump administration, led by actions from the Centers for Medicare and Medicaid Services within the U.S. Department of Health and Human Services, has made a major rule change to hospital reimbursement that, after decades of harming hospitals in rural and non-urban communities while favoring larger communities, now provides some relief to the rural and non-urban areas like ours. They have proposed a change to the antiquated and flawed Medicare funding formula adjustment called the Medicare Area Wage Index, which has served to suppress Medicare funding for hospitals in rural and non-urban communities. This proposed change indicates that Washington finally understands that rural health systems, like ours, have been historically unable to keep up with the real cost growth of nursing and other direct care providers. Rural health systems are paid significantly less for services we provide, even though they are the exact same services provided in larger urban hospitals. This has resulted in a major disparity in rural health systems’ ability to keep up with the cost of direct caregivers, and is a major factor contributing to the closure of rural hospitals in America. While CMS has proposed a new rule change which will benefit rural health systems, and help close this unfair gap, the rule is not yet final. We certainly hope CMS will finalize the rule, as if they do, it will enable systems like ours to look beyond direct care nursing services for targeted wage adjustments in some other areas which may be needed. To be clear, if CMS finalizes this rule, it will enable Ballad Health, and systems like ours, the ability to review compensation of additional targeted positions which merit adjustments, but which the systems have been unable to address due to the lack of revenue related to the flawed Medicare Area Wage Index.

Later this week, I will provide more color on the Medicare Area Wage Index, and the impact it has had on hospital reimbursement in rural markets like ours.  Suffice it to say, the new policies proposed by the Trump administration are favorable to rural hospitals and health systems, and we hope those policies will become finalized.  I should also mention the appreciation we have for the entire Tennessee Congressional delegation, the SW Virginia legislative delegation and our US Senators from both Virginia and Tennessee – all of whom have advocated for a correction to the flawed Medicare funding formula for rural health systems.  Ballad Health has been working with our delegation and intensely advocating in Washington to address this issue, and as recently as a few months ago, I personally testified before the U.S. Senate on your behalf. We are heartened that Washington has been listening.

For your reference, I’m providing you with a link to the written testimony I provided to the US Senate here.  Hopefully, it can be educational.

Read the testimony here

And I’m also providing you with some discussion between myself and Tennessee’s own Sen. Lamar Alexander at a recent Senate hearing where we discussed the Medicare funding formula and rural hospital sustainability. Watch the video

The management team and board of directors of Ballad health wish to convey to our nurses who provide direct care for patients, including our LPNs, CNAs and the others identified in this message, that we are grateful for the work you have been doing in the face of this shortage, and through all the changes we have been through in the past year. Taking care of our patients and their families is the most important thing we do, and we are pleased to be able to take this action.

God bless each of you, and I hope this Nurses Week, you can find complete joy in the work you do!

Alan

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