Labor and supply expenses for hospitals dropped from June to July, but are still much higher than they were pre-pandemic, according to Kaufman Hall's August National Hospital Flash Report released Aug. 28.
"Last year, our industry faced an economic tsunami, and while I don't think we are currently facing a giant wave, the healthcare industry continues to navigate rough waters -- dominated by increasing costs, shrinking margins, staffing issues, and an ever-increasing need to re-imagine how we deliver care," Cliff Megerian, MD, CEO of University Hospitals in Cleveland, told Becker's recently.
While labor expenses per calendar day dropped 1 percent from June to July, they were up 2 percent compared to July 2022. Year to date, labor expenses are up 20 percent in 2023 compared with 2020. The number of full-time employees per adjusted occupied bed was up 1 percent from June to July but down 4 percent year over year.
Year to date FTEs per AOB dropped 19 percent from 2020 to 2023, a reflection of the workforce shortages in healthcare.
"The workforce continues to be a priority, particularly the recruitment and retention of nurses. We knew there was going to be a nursing shortage prior to the pandemic as the result of Baby Boomer retirements and broadening career choices for women," Nancy Howell Agee, CEO of Carilion Clinic in Roanoke, Va., told Becker's. "For many reasons, the shortage escalated during COVID and seems more concerning as we look to supply vs. need going forward."
On the supply side, supply expenses per calendar day dropped 13 percent from June to July, but were up 5 percent year over year. Year to date, supply expenses were up 28 percent in July compared with 2020. Drug expenses per calendar day dropped 12 percent from June to July but are still up 22 percent year to date over 2020.
Here is the breakdown regionally:
West
Labor expenses per calendar day
June to July: -2 percent
July 2022 vs. 2023: 3 percent
Year-to-date 2020 vs. 2023: 26 percent
Supply expenses per calendar day
June to July: -12 percent
July 2022 vs. 2023: 9 percent
Year-to-date 2020 vs. 2023: 30 percent
Midwest
Labor expenses per calendar day
June to July: -1 percent
July 2022 vs. 2023: -3 percent
Year-to-date 2020 vs. 2023: 12 percent
Supply expenses per calendar day
June to July: -14 percent
July 2022 vs. 2023: 5 percent
Year-to-date 2020 vs. 2023: 22 percent
South
Labor expenses per calendar day
June to July:
July 2022 vs. 2023:
Year-to-date 2020 vs. 2023:
Supply expenses per calendar day
June to July: -1 percent
July 2022 vs. 2023: 3 percent
Year-to-date 2020 vs. 2023: 28 percent
Northeast / Mid-Atlantic
Labor expenses per calendar day
June to July: -1 percent
July 2022 vs. 2023: 4 percent
Year-to-date 2020 vs. 2023: 19 percent
Supply expenses per calendar day
June to July: -14 percent
July 2022 vs. 2023: 4 percent
Year-to-date 2020 vs. 2023: 21 percent
Great Plains
Labor expenses per calendar day
June to July: -2 percent
July 2022 vs. 2023: 3 percent
Year-to-date 2020 vs. 2023: 16 percent
Supply expenses per calendar day
June to July: -12 percent
July 2022 vs. 2023: 10 percent
Year-to-date 2020 vs. 2023: 35 percent