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.
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Spring 2022 Kaufman Hall Report: Workforce Dislocation, ESG, Consumerism, and Rising Rates
The pandemic and its complex social and economic effects have dislocated the modern workforce. The problem is especially profound in healthcare, where nearly 1 in 5 workers quit their jobs during the pandemic and one-third of nurses plan to leave their current roles by the end of 2022.
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National Hospital Flash Report: April 2022
U.S. hospitals and health systems fared better in March following a difficult start to the year due to January’s devastating Omicron surge. While repercussions of the surge persist, hospitals saw early signs of relief as outpatient volumes and revenues returned and expenses eased with fewer high acuity patients.
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