Did Emory’s $150 million for raises work?

When Joon Lee, MD, took over as CEO of Atlanta-based Emory Healthcare in July 2023, he identified the workforce as a major area for improvement. He wanted to reduce the use of contract labor and improve staff turnover rates.

Its management team deployed several tactics to achieve its goals, including giving raises to almost every employee. The health system invested $150 million to raise salaries for 20,000 of the system’s 25,000 employees, at a time when other health systems were cutting executive salaries and making layoffs.

The results?

Emory reduced the number of contract nurses to fewer than 300 nurses, down from 1,370 in March 2023, and improved staff turnover below 2019 levels.

“We have made many different investments in the workforce in terms of our focus on benefits and compensation, and we are committed to becoming a market leader in front-line worker compensation, focusing on focusing on nurses, including MAs, environmental service, as well as technicians and technologists who are part of our workforce,” Dr. Lee said in an interview for the “Becker’s Healthcare Podcast“, specifying: “We are very proud to have achieved significant improvements in terms of turnover.”

Dr Lee said the $150 million investment to increase employee salaries yielded the expected results and occurred simultaneously with a broader financial turnaround. This helped to quickly and significantly reduce the reliance on subcontracted labor. When Dr. Lee joined the system, contract work made up about 20 percent of all nurses; now it is less than 15%.

“We’re still not where we want to be, but we’re actually lower than the pre-pandemic rate compared to what we saw in 2019,” he said. “But even beyond that, it’s a little harder to quantify, but we think it’s had a significant impact in terms of culture.”

Dr. Lee believes that long-term retention of nurses, masters and technicians who build their careers at Emory produces a more engaged workforce and provides the opportunity to institute a functional, collaborative system between different business units .

Raising employee salaries helped meet Emory’s goals, but it wasn’t the only factor. Dr Lee said the second element of rapid system transformation was creating a high-performing leadership team that had increased agility and operated more like a system.

The “systems” approach benefited Emory last year after three vendor-related incidents tested the system. Emory was affected by the Change Healthcare hack in February and the Microsoft outage caused by CrowdStrike in July. The health system also felt the effects of a shortage of IVs after the Bayer factory was destroyed by a hurricane in September. The health system was able to address all challenges with minimal impact on patient care and throughput.

“I view this as a testament to what our leadership team has been able to do, being agile, operating much larger and leveraging the power of a system rather than a single hospital,” said Dr. Lee. “By keeping these pillars in mind, we have seen significant improvement in our finances.”