How hospitals are adapting to 2025’s workforce challenges

The official end of the COVID-19 public health emergency may have passed, but American hospitals continue wrestling with its aftereffects: stretched-thin staffing, financial constraints, and care teams struggling to recover from years of crisis management.

The American Hospital Association’s 2025 Health Care Workforce Scan explores how healthcare organizations are combining artificial intelligence, creative partnerships, and renewed focus on staff well-being to overcome these hurdles.

Pressure points mount

Despite recent workforce growth, staffing shortages persist across healthcare—particularly as America’s aging population requires increasingly complex care. The U.S. is facing a projected shortage of 86,000 physicians by 2036, according to The Association of American Medical Colleges while the U.S. Chamber of Commerce predicts 42 states will face nursing shortages by 2030.

Compounding these challenges, care continues migrating outside traditional settings. Home-based care and outpatient services are projected to see volume increases of 22% and 14% respectively through 2034, with cardiovascular and neurology services leading this outpatient expansion.

Meanwhile, financial pressures grow. Inflation jumped 12.4% between 2021 and 2023—more than double the growth in Medicare’s hospital reimbursement rates—while labor expenses rose over $42.5 billion during the same period.

Let’s take a look at how some leading healthcare organizations are adapting to these challenges and finding ways to support and grow their workforce. 

AI tools lighten clinical burdens

Nebraska Medicine tackled high turnover (18%) among new nurses with an AI platform connecting front-line leaders with staff. The system integrates data from nurse workflows, patient interactions and performance metrics to enable timely, data-driven feedback. The result: almost 50% reduction in first-year nurse turnover within six months.

Similarly, Stanford Medicine implemented an AI model that analyzes patient data every 15 minutes to predict deterioration and facilitate better physician-nurse collaboration. It achieved a 10.4% decrease in deterioration events among high-risk patients.

“The tremendous growth in AI health care technology services is pretty exciting,” said Ron Werft, president and CEO of Cottage Health. “This innovation allows leaders to harness technology to better support their teams and ease the burdens that get in the way of patient care.”

Building new talent pathways

Hospitals increasingly form strategic alliances with educational institutions and community organizations to create new workforce pipelines.

Davidson-Davie Community College and Atrium Health Wake Forest Baptist launched North Carolina’s first registered nursing apprenticeship program, enabling students to gain hands-on experience while earning their degrees. In Hawaii, where LPN vacancy rates reached 30% in 2022, the Healthcare Association of Hawaii created a CNA-to-LPN bridge program that graduated its first class of 30 students in December 2023.

“Health care workforce initiatives remain a priority for the state to mitigate shortages and prepare for future workforce needs,” explained Shane Strum, president and CEO of Broward Health. “Students are provided hands-on experience, and we get to personally train the employees of the future.”

Prioritizing well-being and inclusion

While engagement is improving for the first time since the pandemic, one-third of healthcare workers still report low engagement levels. Hospital leaders recognize that addressing burnout requires comprehensive approaches that integrate diversity initiatives with well-being programs.

Allegheny Health Network’s six-year journey to improve clinician well-being began with addressing basic needs like meal breaks before expanding to more complex issues. The health system created a 24/7 behavioral health helpline, decompression rooms, and peer support programs.

The results speak volumes: physician burnout rates trending 10 percentage points below the national average, 90% of employees reporting joy at work, 41% reduction in nurse turnover, and a 34% drop in nurse burnout.

“Workforce is really our number one problem, and number two and number three problem,” noted Brian Nester, president and CEO of Lehigh Valley Health. “The most important thing we learned is to listen to our colleagues and make sure we give them the best possible environment within which to work.”