Costly ER labor expenses continue into early 2023 even as margins improve

Labor expenses in healthcare have been a bane for hospitals and health systems for a few years now, and they show no sign of abating in the first days of 2023, especially in the emergency room, a new report says.

Emergency department labor costs have climbed 50 percent over the past three years and reached a median of $186 per visit in January, according to the Syntellis Performance Trends-Healthcare report.

The figures build on data showing contract labor skyrocketed 258 percent from 2019 to 2022, with emergency room staffing contributing significantly in that period.

Over the past four years, the median labor expense per emergency visit for hospitals nationwide ranged from $117 in May 2019 to $230 in February 2022.

Registered nurse wages, including both employed and contract staff, rose to a median of $42.24 in January 2023, up 19 percent from January 2020.

Despite the ongoing labor pressures, there may be some signs for optimism as hospital margins rose year-over-year in January for the first time since December 2021, the report said.

While the median change in operating margin in January was 2.2 percentage points down on December 2022, there was a 3.7 percentage point increase compared to January 2022, the report said.

"Our data from the first month of 2023 indicates this will be another challenging year for the healthcare industry," said Steve Wasson, executive vice president and general manager for data and intelligence solutions at Syntellis. "High labor costs are the new normal for the nation's hospitals, as illustrated by escalating labor expenses in emergency departments nationwide."

The full report, which draws data from more than 1,300 hospitals and 135,000 physicians, can be accessed here.

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