A nationwide shortage of healthcare workers made worse by the pandemic, and hospital and health systems’ increased reliance on contract labor, is driving expenses upward and contributing to steep declines in profit margins, according to a Special Workforce Edition of Kaufman Hall’s National Hospital Flash Report.
The report’s key findings include:
- Nationally, hospital labor expenses increased by more than one-third from pre-pandemic levels
- The largest increases were in the South and West, while the highest expense levels consistently were in the West and Northeast/Mid-Atlantic
- Contract labor as a percentage of total labor expenses increased more than five times the rate from pre-pandemic levels
- As of March 2022, the median wage rate for contract nurses had risen to more than three times that of employed nurses
- In the first three months of 2022, hospitals saw dramatic declines in YTD operating margin in a perfect storm of expense, volume, and revenue pressures attributable largely to the effects of COVID
For more data and insights on the hospital workforce challenge, read the May 2022 report, The Financial Effects of Hospital Workforce Dislocation: A Special Workforce Edition of the National Hospital Flash Report.