LMH begins shift away from high number of contract employees, which added $12M in labor costs per year
photo by: John Young
Lawrence Memorial Hospital CEO Russell Johnson is pictured on Aug. 4, 2016.
Since the start of this year, LMH Health has hired upward of 200 new employees — 40 of them nurses — and CEO Russ Johnson told the Journal-World it’s an encouraging sign that the health care workforce may be returning to what it was before the coronavirus pandemic.
During the pandemic, the number of contract and agency hires to the nursing staff at LMH has been much higher than normal. At one time, that number was more than 10 times the amount of contract and agency labor the hospital usually employs — 45 to 50 such employees, rather than three or four.
LMH has been dialing that ratio back, Johnson told the Journal-World Thursday. In addition to the 40 new nurses — not hired on contract or through an agency — brought on board since the start of 2022, LMH has hired another 150 employees in the same period, according to LMH spokesperson Amy Northrop. That includes clinical staff like technologists and medical assistants and other nonclinical support staff.
As agency contracts expire, LMH has slowly begun filling those spots with permanent employees. Johnson said the hospital was likely nine to 12 months away from being at a level of contract staff that was used pre-pandemic.
“So we’re beginning to see our way back to full and complete recovery of our workforce,” Johnson said. “… It’s a very encouraging signal that, on a broad scale, people are ready to come back to work and ready to make a commitment to an organization where they want to work and stay, I hope.”
On the one hand, Johnson said LMH has been grateful to have the contract staff, because it has spread the workload and has allowed the hospital to keep providing a range of services during the pandemic. On the other hand, it’s been a complicated solution because it creates a pay disparity across the hospital’s workforce. Generally, contract workers command significantly higher pay than noncontract ones, although the hospital did not provide specific numbers related to that discrepancy.
Contract labor has led to major costs for the hospital system. Contract and agency staff have represented an additional $1 million per month in labor costs for LMH. At $12 million per year, Johnson said, the cost is simply not sustainable, even though LMH has been lucky enough to keep its budget in the black during the pandemic despite some uncertainty at the end of last year.
Johnson stopped short of saying the money LMH has been spending on contract and agency hires, once freed up, would translate to higher pay rates for permanent employees, though. LMH is trying to stay competitive with its benefits and compensation, he said, but salary and wages for regular employees are set more by the marketplace — while the much higher agency and contract labor rates reflect both the temporary nature of those jobs and the fact that such workers are generally hired when there’s no other option.
“I don’t think about it as ‘Well, I used to spend that money over here, now I need to spend it over here,'” Johnson said. “What I think about is how do we make sure we remain a fair and competitive employer for our employees?”
Johnson said the decline in agency staff was an opportunity to do just that — to become more competitive and to examine where LMH may have fallen behind compared with other employers. While he didn’t share any specifics about how much LMH’s new hires are earning, Johnson said having 40 new nursing staff come aboard indicated to him that LMH’s compensation and benefits were deemed fair.
The health care workforce has been notably dynamic recently, Johnson said. Amid the demands of the pandemic, community hospitals across the country have had to determine how they can attract and keep employees. LMH is in that boat, he said, and those concerns are top of mind when it comes to new hires.
While some things are looking more “normal” in the health care landscape, Johnson said that normal at this point was kind of an evolving concept.
“There’s no question that sense of emotional wear and tear and physical commitment and weariness is not just over,” Johnson said. “I think at a very high level, what I believe is that we are going to see a changing nature of workforce going forward. Not just LMH, but across our country. I think the way people think about work, their relationship to work, how much they want to work, is changing. And so is our organization; we’ve got to adapt to that.”
That change is evident in LMH’s adoption of greater scheduling flexibility and allowing nonclinical staff to work from home if they wish, he said.
The health care workforce has been put to the test by the pandemic, Johnson said, and they deserve the public’s gratitude, support and resources. He called LMH’s staff in all areas “remarkable.”
“It’s individuals with their own families and their own challenges coming to work every day, being in harm’s way and taking care of patients is what makes them remarkable,” Johnson said.
Broadly speaking, it’s a hopeful moment in public health, Johnson said. Though LMH had one inpatient hospitalized for COVID on Thursday, the previous two days were the first time the hospital has had no COVID inpatients on any given day since June 11, 2021. Early summer of last year was the last time it felt like we were “turning a corner” on the pandemic, he said, and then the highly contagious omicron variant reared its head.
“I think from my perspective, this whole experience has been one unlike the 38 years in my health care career,” Johnson said. “It has been such an opportunity for a hospital to learn what it means to be in public health, to be supportive in a pandemic, and to adjust and change.”
The pandemic has clearly reinforced that health care is a “collaborative enterprise,” Johnson said. We’re better served as a community and as individuals when there’s open conversation and dialogue about public health, he said, and when entities like Lawrence-Douglas County Public Health and Bert Nash Community Mental Health Center and members of the public are part of determining the best approach.




