A new study from Navigant Healthcare and HFMA points to clinician shortages driving increased labor costs for health systems.
Hospital and health system CFOs are keeping a close watch on the growing physician and nursing shortages facing their organizations, while predicting another year of increasing labor budgets.
According to an analysis sponsored by Navigant Healthcare and the Healthcare Financial Management Association (HFMA), 78% of executives surveyed said that they expect labor budgets to increase next year.
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Of that those who expect an increase, 18% of respondents predict their labor costs will rise by more than 5%. However, 14% expect labor think costs will decline, though no respondents expected a drop of more than 5%.
Nearly half of the surveyed hospital finance executives are already targeting labor expenses as an area to reduce operating costs over the next year, more than double the amount for purchased services, the second-most popular answer. Systems also plan on implementing strategic labor management initiatives going forward, primarily focused on improved productivity, workflow design, and reducing skilled staffing shortages.
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As for specific staffing shortages, executives were more pessimistic about the situation compared to this time last year.
- 43% of executives said the nursing shortage got worse, while 27% said the crisis improved.
- 35% said the physician shortage worsened, while 20% said the shortage got better.
- 35% said their mental health provider shortage got worse, compared to 10% who said it improved.
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Jack O'Brien is the Content Team Lead and Finance Editor at HealthLeaders, an HCPro brand.