Why Value-Based Healthcare Demands Strategic Workforce Planning
Healthcare is in the middle of one of the most significant business model shifts in its history. As the industry moves away from fee-for-service models toward value-based care, they are financially incented to keep the population healthy rather than only treat illness. This makes proactive prediction and prevention core operating principles. Yet while healthcare leaders are reimagining how care is delivered, many are still managing their workforce the same way they have for decades: reactively. The industry’s lack of willingness to innovate in their workforce operations is becoming one of the most significant risks facing healthcare organizations today.
The Workforce Paradox in Value-Based Care
Efforts to transform the healthcare industry gained momentum in 2009 with the passage of the Health Information Technology for Economic and Clinical Health (HITECH) Act, which required providers to embrace technology (Electronic Medical Records) and demonstrate “meaningful use”. A year later, the Affordable Care Act (ACA) of 2010 created programs like Accountable Care Organizations (ACOs) to shift from volume to value and introduce payment reforms. The idea is simple: focusing on prevention of illness versus waiting until people get sick will be better for the population and less expensive for the providers.
Now consider how most healthcare organizations manage their workforce:
- Burnout is recognized post-mortem once turnover accelerates and staffing gaps become intolerable
- Labor shortages are reactively addressed by asking people to work overtime or by hiring expensive outside contingent staff
- Staffing ratios, acuity levels and skill mix are inconsistently monitored and measured, leading to the inability to adapt quickly to changing demand
- Workforce plans are often static headcount models, if they exist at all.
In other words, most healthcare organizations have yet to embrace a proactive model of keeping their employee population healthy – rather they are still practicing traditional sick care. This reactive posture might have been survivable in a volume-driven system where the talent supply was stable. However, it is untenable in a value-based world where outcomes, continuity of care, clinician experience, and cost discipline are tightly linked. If healthcare is serious about prevention, resilience, and long-term value, the workforce must be managed the same way the patient population is.
The Cost of Waiting Until the Workforce Is Unhealthy
A simple understanding of supply and demand illustrates how critical this issue is. The Bureau of Labor Statistics projects that in the next decade the healthcare and social assistance sector will experience the highest growth in employment of all industries, with an 8.4% increase. This will largely be driven by an aging population and their associated chronic conditions. Most healthcare CHROs don’t need convincing that the workforce is under strain. They see it every day, in the form of:
- Clinician burnout, which peaked during the pandemic but remains elevated
- Persistent shortages in nursing, behavioral health, and specialized roles
- Rising labor costs eroding already thin margins
- Turnover disrupting continuity of care and the patient experience
The problem is not awareness. The problem is a lack of proactive planning and ongoing attention. By the time most organizations act, the patient (ie worker) is already in critical condition. An endless loop emerges, with vacancies becoming chronic and resulting in burnout which leads to more attrition, including clinicians leaving the industry for good. Institutional knowledge and intellectual capital are lost, care quality suffers and patient experience is negatively impacted. And all of this can impact reimbursement rates, diminishing already thin margins. Even non-profit health systems understand: no margin, no mission.
Just as late-stage intervention is more expensive and less effective in clinical care, late-stage workforce intervention is costly, disruptive, and difficult to reverse.
A Preventive Model: Strategic Workforce Planning
Strategic Workforce Planning (SWP) offers healthcare leaders a fundamentally different approach. At its core, SWP is about anticipation, alignment, and ongoing action. The essential elements include:
- Anticipating future workforce demand based on care model redesign (including the use of AI), anticipated volumes, and population demographics
- Understanding the current supply of internal and external talent and identifying gaps
- Taking deliberate action to reskill, redeploy, redesign, or revise talent sourcing strategies
This is not traditional workforce forecasting, and it is not annual headcount budgeting. Strategic workforce planning is the value-based care equivalent for talent. It shifts the question from “how many people do we need next year?” to “what skills and capabilities will we need to deliver care differently, and how do we sustain our ability to adapt as needs and conditions change over time?” In the era of AI, the additional question is “what administrative and transactional tasks can be automated by Agentic AI and how can we use other forms of AI to augment our clinical staff to make them more productive and efficient?”
If strategic workforce planning is so powerful, why have so few healthcare organizations embraced it? There are three common reasons:
1. The data has been fragmented.
Workforce data has historically lived in disconnected systems including HR, finance, scheduling, and operations. This makes it extremely difficult and time-consuming to do any type of holistic analysis.
2. The models were too rigid.
Traditional workforce planning approaches struggle to adapt to rapid demand shifts and unexpected shocks (think Covid). Today’s need to embrace new care delivery models while maintaining regulatory compliance makes this even more important.
3. The planning horizon was too short.
Most workforce decisions were tied to annual cycles, not long-term strategy. As a result, workforce planning became an academic exercise rather than an operational capability.
The Case for Change
Several forces are converging to make strategic workforce planning not only possible, but essential. The delivery of value-based care requires both stability and continuity. Outcomes are dependent on teams of individuals coordinating care across the community, with clinicians maintaining ongoing relationships with patients. Put simply: you cannot deliver value-based outcomes with a perpetually destabilized workforce.
The use of AI-enabled technologies is reshaping the way care is delivered and facilitating the execution of strategic workforce plans. Healthcare leaders can leverage machine learning to model future demand based on evolving care delivery models, simulating “what-if” scenarios like AI adoption, new service lines and shifting reimbursements. All of this points to the newfound ability to prevent burnout, address skills obsolescence and mitigate labor shortages in critical roles.
A New Mandate for Healthcare CHROs
Gartner Vice President Harsh Kundulli recently suggested that HR’s mandate is moving from a focus only on the workforce toward redesigning the work itself. This is possible due to new AI-driven technologies automating the compliance related tasks and administrative minutia that have historically accompanied the discipline of HR. New tools can enable HR leaders to work with clinical leadership, finance and IT to align workforce decisions with quality outcomes and financial incentives while minimizing the cognitive burden of disparate systems. This elevates workforce planning from a finance or HR activity to an enterprise strategy.
In a value-based healthcare system, the workforce is not just a cost to manage - it is a valuable population to keep healthy. HR leaders would be well served to consider three ways to shift their focus from reacting to workforce challenges to preventing them:
1. Reach out to your counterparts in finance, IT and the clinical side of the organization.
Creating an ongoing dialogue with influential stakeholders is critical. This should include identifying ways to redesign the care delivery process without sacrificing quality or breaking the bank.
2. Embrace new technology and give people time to learn.
You may have gotten by without utilizing HR analytics and SWP tools in the past, but a value-based model requires more. While it may sound counterintuitive, the more you embrace technology, the more human care delivery can become.
3. Stop focusing on mitigating risk and start taking risks.
The days of HR spending time enforcing policies and procedures are gone. It is time to get creative in how we deliver value to the organization, and you can’t be creative without taking some risks.
The future of healthcare depends on prevention and maintaining the health of the population. It’s time to apply that same philosophy to the healthcare workforce.
About LYTIQS
LYTIQS helps healthcare organizations navigate this new reality. Our AI-enabled workforce analytics and strategic workforce planning solutions empower leaders to understand their workforce at a deeper level, model future scenarios, and make confident, data-driven decisions in an era of unprecedented change. The future of work is already here. Are you ready?
About Marcus Mossberger
Marcus is genuinely passionate about elevating humanity’s experience at work. He has spent several decades deciphering the various challenges and opportunities related to the world of work and today is focused on bringing that knowledge to bear by helping organizations chart a path forward. His focus at LYTIQS is to channel his market perspective into the strategy and execution of LYTIQS offerings, with the goal of building and delivering what matters most to their customers and partners.
