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American Focus > Blog > Health and Wellness > Are Healthcare Labor Woes Ending? Some Might Be In A Post-Covid First
Health and Wellness

Are Healthcare Labor Woes Ending? Some Might Be In A Post-Covid First

Last updated: September 24, 2024 4:53 pm
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Are Healthcare Labor Woes Ending? Some Might Be In A Post-Covid First
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Labor challenges in hospitals and health systems across the nation may finally be easing, according to a recent report from Fitch Ratings. The healthcare industry has been grappling with staffing shortages since the onset of the COVID-19 pandemic, leading to a significant exodus of healthcare workers.

Fitch Ratings’ report suggests that the worst of the labor downturn for not-for-profit hospitals in the U.S. could be coming to an end. Not-for-profit hospitals, which make up the majority of healthcare facilities in the country, have been hit hard by staffing issues exacerbated by the “Great Resignation” phenomenon that swept through various industries.

Recent data indicates a positive trend in the healthcare sector, with average hourly earnings growth for hospital employees declining favorably from 4.2% in 2023 to 3% in 2024. This cooling of wage inflation is a welcome development, as it brings hospital wage growth more in line with that of other healthcare sectors.

Despite the positive signs, Fitch notes that hospital payrolls have been steadily increasing over the past 32 months, reflecting a 6.7% rise since February 2020. The healthcare and social assistance sector has seen a decline in job openings, dropping to 6% in July from 7.9% in January, although it remains higher than pre-pandemic levels.

The healthcare staffing industry continues to face challenges, with labor shortages still impacting hospitals nationwide. AMN Healthcare, a leading healthcare staffing firm, acknowledges that while conditions are improving, underlying factors contributing to workforce shortages persist. Geographic and specialty mismatches between demand and supply of healthcare professionals remain a long-term challenge.

One area experiencing heightened demand for healthcare providers is the care of Medicare-eligible individuals aged 65 and over. Health insurance companies offering Medicare Advantage plans have reported higher-than-expected medical costs, particularly from delayed hospital admissions and surgeries during the pandemic.

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Hospitals are still contending with pent-up demand for services, especially from seniors, which has kept labor needs high. While sustained high patient volumes are a positive for health systems, they also present administrative challenges such as slow payments and denials of prior authorizations, particularly with Medicare Advantage insurers.

In conclusion, the healthcare industry is showing signs of recovery from the labor challenges brought on by the COVID-19 pandemic. While progress is being made, ongoing efforts are needed to address workforce shortages and ensure the long-term sustainability of healthcare delivery in the U.S.

TAGGED:HealthcareLaborpostCOVIDWoes
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