Hospitals across the country are facing renewed financial pressure. Proposed federal budget changes could slash Medicare funding by $490 billion over the next decade, while Catholic health system leaders warn that Medicaid cuts will trigger a "polycrisis" across 39 states increasing the volume of uninsured patients, straining emergency departments, and pushing more hospitals into financial distress.
The timing couldn't be worse. Many hospitals are still recovering from pandemic-related losses and have seen labor costs skyrocket in the last three years.
So how do hospitals stay operational and mission-driven with fewer reimbursement dollars?
One of the most strategic moves hospital executives can make right now is to re-evaluate how they recruit and hire clinical talent.
Why Recruitment Process Outsourcing (RPO) Belongs in the Conversation
Recruitment Process Outsourcing (RPO) allows healthcare organizations to partner with an external firm to manage part or all of their recruitment function. It's scalable, cost-effective, and performance-based which makes it ideal in a time of fiscal uncertainty.
Here's how RPO can help hospitals respond strategically to looming Medicaid and Medicare cuts:
Reduce Cost-Per-Hire
In-house recruiting teams and contingency staffing firms can be costly and hard to scale. RPO centralizes recruitment efforts under a single accountable partner, often reducing cost-per-hire by 3050%. This allows hospitals to redirect savings toward critical care delivery or financial stabilization.
Replace Expensive Contract Labor
Hospitals heavily reliant on travel nurses and locums are paying a premium for flexibility. But flexibility shouldn't come at the cost of sustainability. RPOs are designed to hire full-time, permanent staff which lowers labor costs, improves retention, and strengthens team cohesion.
A recent Emory University study found that replacing contract nurses with permanent hires can increase patient throughput and revenue.
Speed Up Hiring Without Sacrificing Quality
Empty roles mean lost revenue and increased burnout for remaining staff. RPOs deploy experienced recruiters, technology, and streamlined workflows to reduce time-to-fill all while maintaining high standards for quality and compliance.
Gain Workforce Flexibility Without Fixed Overhead
RPOs can flex recruiting resources up or down based on hiring volume. When legislation or economic shifts lead to workforce volatility, RPOs give CHROs and CFOs the agility they need without overcommitting to fixed internal headcount.
Improve Talent Insights and Forecasting
A strong RPO partner brings more than just capacity they bring data. From time-to-fill and source-of-hire to retention forecasts and workforce gaps, RPO partners help organizations plan smarter and act faster.
If you're a healthcare executive staring down the possibility of revenue reductions from Medicare and Medicaid cuts, you can't afford a bloated, inefficient recruitment model. RPO offers a proven way to:
It's not just a hiring strategy it's a financial resilience strategy.
Let's talk about what that could look like for your system.