Staffing shortages ramp up recruitment pressure on hospitals 

Photo: Reza Estakhrian/Getty Images

The spread of the Delta variant is prolonging the shortage of workers across the healthcare industry, straining hospital profitability and adding to burnout rates, according to a report from Moody's Investor Service.

Insufficient staffing in some regions of the United States has spread beyond clinical staff, such as nurses, respiratory therapists and technicians, to nonclinical workers, such as dietary and environmental services staff. This has led to hospitals suspending elective overnight surgeries.

In addition, the shortage of hospital workers has hampered recruitment and retention and driven up wages -- which the report predicts will continue into next year. This will lead to a further decline in profit margins.

Heightened demand due to the pandemic will drive higher use of contract labor and increase salary and benefit expenses, the report noted. Growth in salaries and benefits has exceeded hospitals' expense growth, a trend likely to continue for the remainder of 2021 and into 2022.

In one bright spot in the report, Moody's noted recent rises in nursing school enrollment indicating a more robust long-term staffing pipeline.

However, the aging population, combined with a healthcare workforce that may be retiring from their jobs or quitting due to burnout, represent long-term healthcare staffing challenges nationwide.

"Even after the pandemic, competition for labor is likely to continue as the population ages -- a key social risk -- and demand for services increases," the report concluded. "Even if the near-term shortage is contained, rising demand for healthcare as the U.S. population ages will continue to put pressure on the supply of nurses and workers over the longer term."

WHY THIS MATTERS

Healthcare staffing shortages have been a worry for some time now due to the nation's increasingly aging population, but COVID-19 has only added to the concern.

Even before the pandemic, studies predicted physician staffing shortages by upwards of 140,000 by 2030, as well as shortages of in-home health aides, nursing assistants, nurse practitioners and medical lab technicians by 2025.

Hospitals and health systems across the country are paying $24 billion more per year for qualified clinical labor than they did pre-pandemic, according to recent analysis by PINC AI.

THE LARGER TREND

The American Nurses Association recently cited the Delta variant of COVID-19 as a complicating factor that has exacerbated workforce shortage challenges. In September the ANA sent a letter to the HHS asking the agency to declare the ongoing nursing shortage a national crisis, citing overwhelmed health systems and burnt-out staff.

A landmark 2013 report of the Institute of Medicine's (IOM) Committee on the Adequacy of Nurse Staffing in Hospitals and Nursing Homes found nurse fatigue not only negatively affects operational costs, but patient and employee satisfaction as well.

Other studies, conducted around the same time, had come to the same conclusion.

ON THE RECORD

"The surge in Delta cases has forced hospitals to run operations with fewer workers, causing challenges for recruitment and retention efforts while placing additional strain on operating performance," Lisa Goldstein, associate managing director of Moody's Investors Service, said in a statement. "To sustain operations and meet increased demand for services, not-for-profit hospitals will need to commit more resources to fill labor shortages, leading to further margin pressure." 

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