Labor shortages will strain hospital budgets through 2022, says Moody’s
- The delta variant of the coronavirus continues to pose staffing challenges for hospitals as they spend more resources on recruiting and retaining employees, increasing benefit options and offering high sign-in bonuses, report says Tuesday from Moody’s Investors Service.
- These expenses will put a strain on the profitability of hospitals at a time when lucrative non-emergency procedures are suspended in some areas to manage incoming COVID-19 hospital patients. Moody’s expects the strain on hospital budgets to continue until next year.
- Although demand for temporary nurses fell last week, it is still well above pre-pandemic levels, according to data collected by analysts at Jefferies. Crisis jobs – those that respond quickly or charge more than $ 100 an hour – account for more than three-quarters of openings at recruiting firm Aya Healthcare, the third highest percentage recorded by Jefferies.
The highly contagious delta variant is wreaking havoc in the U.S. healthcare system, as most unvaccinated people fill intensive care units more than a year and a half after the start of the pandemic. Clinicians who have been stressed throughout this time by working long, hard hours report severe burnout as some consider leaving the profession altogether.
Meanwhile, vaccination warrants came into effect for many hospitals. While they report that the vast majority of employees comply, even small losses from those who refuse can impact staff resources.
This need has resulted in increases in salaries that nurses can order, as well as benefits, enrollment bonuses and the provision of services like childcare, Moody’s said.
The report also noted that the current shortage – unlike previous ones – also includes non-clinical staff such as dietary and environmental service workers.
As Moody’s focuses on not-for-profit operators, spending challenges will be an important metric to watch in the upcoming earnings season. While all of the major for-profit hospital operators beat Wall Street expectations for profits and revenues in the second quarter, and most posted profit increases, spending was a rising item.
Hospital labor costs increase
Year-to-year for-profit health systems labor costs
And consultancy firm Kaufman Hall has warned that U.S. hospitals will lose an estimated $ 54 billion in net revenue this year, while a previous Moody’s report predicted the impacts of COVID-19 on the nation’s healthcare system to last for decades. decades.
As the Biden administration works to encourage more vaccinations through a combination of carrots and sticks, it’s unclear when the delta may peak and what future variants might bring. Even once hospitals are on more stable ground in terms of capacity, other challenges will remain as patients return for care they postponed earlier.
And there are longer-term concerns as well. “Even after the pandemic, competition for the workforce is expected to continue as the population ages – a key social risk – and demand for services increases,” according to the Moody’s report.
Jefferies analysts agreed, saying demand for temporary nurses will decline but remain high. In addition, the fundamental demand drivers for nurses that existed even before COVID (i.e. the demographics of the nursing population) have been driven by the lingering effects of the pandemic on the profession and are likely to stimulate demand for temporary staff after 2022, “they wrote. in the Wednesday note.