Column | Healthcare Business Trends

Ken Perez: Healthcare assailed by a labor crisis, with pharmacy technicians particularly affected

Column | Healthcare Business Trends

Ken Perez: Healthcare assailed by a labor crisis, with pharmacy technicians particularly affected

 

Anthony Klotz, a professor of management at Mays Business School at Texas A&M University, is credited with coining the term Great Resignation to describe the huge number of Americans who quit their jobs in 2021.

According to the U.S. Bureau of Labor Statistics (BLS), an all-time record of nearly 4 million people resigned in April 2021, followed by a string of more record resignations in subsequent months:

  • 4.0 million in July
  • 4.3 million in August
  • 4.4 million in September

In total,  24 million Americans quit their jobs from April to September 2021. And during this period, the number of job openings was generally more than double the number of resignations. For example, there were 10.4 million openings at the end of September 2021.

Why the exodus? Not surprisingly, the top driver was the cumulative stress and burnout caused by the threats posed by COVID-19, and the changes it forced upon societies across the world. In the United States, workers responded by voting with their feet and asserting their desires for better compensation, more flexibility and increased job satisfaction.

Healthcare’s labor losses

Resignations have been highest in the technology and healthcare industries, where workers have been forced by the pandemic to bear much heavier workloads, causing many of them to experience burnout and some to seek early retirement. From February 2020 to September 2021, healthcare lost an astounding 524,000 workers. The confluence of increased demand for care — due to increased case volume and higher acuity of cases — and an aging workforce that has not been sufficiently replaced by younger generations led to the record numbers of employee departures. Whether those who have left will return depends in part on whether their experience during the pandemic has left an indelible stain on the healthcare industry.

Moreover, healthcare is contending with a weakened workforce at the very time when patient volumes are projected to rebound and exceed pre-pandemic levels. A McKinsey & Company survey of 100 large private-sector hospitals concluded that, on average, hospitals’ inpatient admissions have returned to 2019 levels, and inpatient admissions will increase by 4% in 2022 relative to 2019.

The pharmacy technician shortage

Discussions of the healthcare labor shortage are usually limited to healthcare workers in general, with occasional highlighting of the shortages and/or geographic distributions of nurses and primary care physicians, respectively, who obviously play key roles in care delivery.

But much less is written about the acute, nationwide shortage of another category of healthcare worker who is critical to clinical care in inpatient, outpatient and retail settings: the pharmacy technician.

Pharmacy technicians have been described as the backbone of pharmacy services. Behind the scenes in hospitals and health systems, they help procure, compound, dispense and distribute medications. Furthermore, they play a key role in inventory management for thousands of drugs each day, which is critically important, given the nation’s more than 200 current drug shortages.

Although the pharmacy technician is usually the first person a patient sees when walking into a retail pharmacy, the important role that this individual plays is not well understood by the public. Sometimes they are mistaken as pharmacists, sometimes as clerks.

How pharmacy technicians support patient care is becoming increasingly evident as the United States is experiencing a widespread staffing shortage in this area. At the October 2021 meeting of the Autonomous Pharmacy Advisory Board, virtually all chief pharmacy officers on the board reported they were struggling to staff enough pharmacy technicians. Similarly, among 278 respondents to a May 2021 nationwide survey conducted by the National Community Pharmacists Association (NCPA), nearly 90% said they couldn’t find pharmacy technicians. Also, in October 2021, the senior director of external relations for Walgreens reported that the chain is seeing staffing shortages across the country.

 

A key driver of the pharmacy technician shortage

What’s causing the shortage? In addition to the aforementioned heavier workloads and burnout, circumstances largely outside the control of employers of pharmacy technicians have contributed to the problem. It is just one manifestation of the broader challenge faced in entry-level hiring across all industries: For various reasons, many people are reluctant to return to work.

Consequently, many large corporations are offering new workers unprecedentedly high starting hourly wages. In September 2021, Walmart, the nation’s largest private employer, raised its hourly pay for more than 565,000 store workers by at least $1, bringing the chain’s U.S. average hourly wage to $16.40. That same month, Amazon, the nation’s second-largest private employer, increased its average starting wage to more than $18 an hour and announced plans to hire 125,000 warehouse and transportation workers. In contrast, the U.S. average hourly wage for pharmacy technicians in retail pharmacies is about $16, which gives them a reduced incentive to resume work in this area.

Alternative solutions

Faced with this wage competition, many pharmacies have decided to pursue a “fight fire with fire” strategy. Among respondents to the NCPA survey:

  • More than 72% said that they are raising wages to attract workers
  • 56% are offering more flexible work hours
  • More than 20% are increasing benefits

Will this strategy work for pharmacies? Unfortunately, they are limited in their ability to match other industries’ wages. Payer reimbursements — which are controlled by pharmacy benefit managers — have been declining for years, contributing to the closure of nearly 10,000 community pharmacies between 2009 and 2015.a Moreover, as of the third quarter of 2021, the average pharmacy’s pretax profit margin was just 1.51%, leaving little or no room for increasing wages.

Squeezed by the dual challenges of an upward wage spiral and continued payment pressure, pharmacies in both hospital and retail settings need to turn to technology to optimize the use of existing staff. Many labor-intensive tasks can be automated, allowing pharmacy technicians to be more efficient and freeing up time for higher-value activities.

Ultimately, intelligent infrastructure that integrates technologies such as automation, robotics and data intelligence could increase productivity and transform the roles of pharmacy technicians — and pharmacists as well. Such advancements would not only enhance these pharmacy professionals’ career paths but also would improve the ability of pharmacies — inpatient, outpatient and retail — to attract and retain workers. 

Footnote

h. Knoer, S.J., “Payment reform,”  Journal of the American Pharmacists Association, March 1, 2021.

 

About the Author

Ken Perez

is vice president of healthcare policy and government affairs, Omnicell, Inc., Mountain View, Calif., and a member of HFMA’s Northern California Chapter.

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