Labor costs easing but supply expenses among 'relentless' hospital challenges

Labor costs linked to contract labor may be easing slightly for hospitals and health systems, but supply costs remain a key challenge well into 2023, according to an Aug. 3 report from Syntellis.

Operating room medical supply expense per minute at hospitals nationwide climbed 9 percent in June compared to the same month last year, the report said.

And while total hospital expenses rose 2 percent compared with this time last year, non-labor expenses such as drugs and supplies were up 4.7 percent in June.

While the share of hours worked by contract labor nurses declined from 12.4 percent in March to 8.3 percent in June, other expenses such as supplies continued to weigh heavily on the prospect of sustained recovery for hospitals and health systems.

"Numerous challenges continue to stifle their progress, including relentless increases in overall hospital expenses, workforce shortages, and mounting competition from non-traditional healthcare providers," Steve Wasson, executive vice president and general manager for data and intelligence solutions at Syntellis, said in a statement.

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