LMH to allow hundreds of employees to work from home; hospital finalizing purchase of another doctor’s office
photo by: LMH Health
Hundreds of employees at Lawrence’s hospital may continue to work remotely long after the pandemic is over.
Leaders of LMH Health on Wednesday told the nonprofit’s board of directors that allowing employees to work remotely was partly a reaction to a tight labor market, but also was a way to address some longstanding problems.
“Our sense is we are seeing a more collective and seismic shift in how people are thinking about work and engaging in work,” Russ Johnson, president and CEO of LMH Health, told the board.
Johnson said a trend of using technology to work remotely has been building for a long time, but he estimated that the pandemic probably moved the trend ahead “easily by 10 years.”
“We have laughed about it at times because we were like ‘why didn’t it occur to us earlier that we could do these things?'” Johnson said. “Why do we have a parking problem at the hospital when we have 250 employees who want to work somewhere else?”
At Wednesday’s meeting, LMH leaders did not provide a specific number of employees who may begin working remotely. But they did estimate that at times during the pandemic about 25% of LMH’s workforce was working remotely. Based on previously reported employee totals, that would have equated to about 375 full-time employees working remotely.
Some of that remote work has continued even though pandemic restrictions have eased. As an example, board members were told the “vast majority” of all the employees in the business services division — which encompasses financial and other similar professionals — are working remotely 80% or more of the time.
Despite giving employees more flexibility in their work environments, the hospital continues to see employee turnover rates increase, which has been a trend in the hospital industry. For 2021, LMH is projected to have an employee turnover rate of 20.9%. That’s up from about 18% in 2020. Hospitals in the Kansas City region are reporting an average turnover rate of just a little more than 21%, Colleen Browne, who oversees human resources for LMH Health, said.
The hospital also is having trouble filling some of the vacated positions. Browne said the vacancy rate for registered nurses was at 9.97%, which she said appeared to be an all-time high for LMH.
“It is a tough market,” Browne said.
LMH is offering a $5,000 signing bonus for certain nursing positions, but Browne noted that some Kansas City competitors are offering a $10,000 signing bonus for the same type of positions. Browne said LMH was reviewing its compensation and pay structure hospitalwide because the current system has some shortcomings.
“It is still competitive, but it is a little clunky,” she said.
Browne said LMH was working diligently on coming up with new pay plans for some positions. That likely will be important, along with addressing other work/life interaction issues, because a hallmark of the current generation of employees is that they will leave quickly to find a better situation.
“The free-agent mentality of the next-generation workforce is real,” Browne said. “There are other generations that wanted these things but maybe didn’t have the leverage to make it happen.”
That’s likely changing, though, Johnson said. He told board members he’s spending a lot of time contemplating how the employer-employee relationship will change as the workforce likely becomes tighter as many baby boomers reach retirement and fewer new workers are available to replace them.
“Do we as an organization need to have a fundamentally different message to our employees around our commitment to them?” Johnson said. “Are we moving away from an era where employers kind of held the cards?”
Johnson said it was worth reflecting on how employers have historically interacted with employees.
“We talk about younger generations not having a lot of loyalty to an organization and they move around a lot,” Johnson said. “As employers, I think we taught them that by not always having a lot of loyalty to them.”
In other news from Wednesday’s LMH board meeting:
• LMH Health expects to finalize the purchase of another medical practice this summer. Medical providers at Lawrence Family Medicine & Obstetrics have signed contracts to become LMH Health employees on Sept. 1. The practice, which is at 1220 Biltmore Drive in west Lawrence, includes doctors Malati Harris, Larisa Kimuri, Pamela Huerter and Lori Nichols.
“It is a really strong and exceptional primary care group,” Johnson said. “It is a group we are really proud to be associated with.”
Terms of the sale weren’t disclosed. The deal continues a trend of more independently owned medical practices becoming affiliated with hospital groups.
• May financial results for LMH Health were presented to the board. The nonprofit hospital continues to post revenues greater than expenses. In May, the hospital posted an operating profit of about $72,000, which slightly exceeded expectations. A continued rise in the stock market, though, continues to benefit LMH’s bottom line. The hospital has tens of millions in investments. Those investments increased in value by about $630,000 in May. When those investments are added to the results, LMH posted total net income of $702,472 for the month.
Year to date, LMH has posted an operating profit of about $892,000. But when investment gains are added to the mix, the bottom-line profit grows to $7.1 million, which is nearly $6 million greater than what hospital leaders expected when they created LMH’s budget for the year.