According to a study published by Kaufman Hall on October 24th on the “2023 State of Healthcare Performance Improvement” numbers were up 44% from last year. Of these results the numbers were only predicted to be up by 27%. Within health systems it has been known that the cost of labor is one of the largest costs if not the largest cost.
To combat this Hospitals have started to act on reducing these labor costs. Some of the methods that have been adopted by hospitals are internal or enterprise float pools and more per diem or pro re nata employees. With the pandemic of COVID-19 softening, a steadier stream of nurses is now beginning to return as full-time employees.
With the cost of labor and turnover staggering according to the CEO of Durham (N.C. based Duke University Health System) hospitals are starting to worry. With this lack of turnover hospitals are being encouraged to hire a Chief Retention Officer in order to not contribute to the high turnover rate.
One of the main forms of combating this turnover that hospitals have practiced is being able to partner with nearby education institutions. Thus, increasing the pipeline of new graduates. Leveraging these connections can effectively provide the health care market with increasing labor costs. As this trend continues to grow, we will monitor it closely and see how ASCs and hospitals tackle this growing problem.
How are labor costs are affecting your ASC or hospital?
CFO’s March Down Contract Labor Costs (beckershospitalreview.com)