Workers leaving, expenses for labor, drugs, supplies rising in hospitals

Expenses per patient increase, even accounting for COVID-19 pandemic, AHA says.

Health care workers are fleeing and costs are rising as the United States continues to deal with the COVID-19 pandemic.

The American Hospital Association (AHA) said massive growth in expenses and rising inflation fuel continued financial challenges for hospitals and health care systems. AHA published its findings in the report “Costs of Caring” on April 25.

Hospital employment is down about 100,000 from pre-pandemic levels according to data from the federal Bureau of Labor Statistics. At the same time, labor expenses per patient increased 19.1% through 2021, compared to 2019 levels, according to AHA.

“America’s hospitals and health systems, and our caregivers, have been on the front lines in fighting the pandemic for over two years now, facing numerous challenges along the way,” AHA President and CEO Rick Pollack said in a press release. “While we have made great progress in the fight against the virus, this report shows that we are not out of the woods yet when it comes to addressing the need to repair and rebuild our hospitals.”

Data from Kaufman Hall, a consulting firm that tracks hospital financial metrics, shows that by the end of 2021, total hospital expenses were up 11% compared to pre-pandemic levels in 2019. Even accounting for changes in volume that occurred during the pandemic, hospital expenses per patient increased significantly from pre-pandemic levels across every category, according to AHA.

Median hospital drug expenses by the end of 2021 were 28.2% higher than pre-pandemic levels through the end of 2019 and 36.9% higher per patient.

Overall, supply expenses for hospitals were 15.9% higher by the end of 2021 compared to the end of 2019 and 20.6% higher per patient.

“The dramatic rise in costs of labor, drugs, supplies and equipment continue to put enormous pressure on our ability to provide care to our patients and communities,” Pollack said. “The pandemic has clearly demonstrated that America cannot be strong without its hospitals and health systems being strong.”

Pollack said AHA continues to urge Congress to provide additional support to hospitals by:

  • Reversing harmful Medicare cuts
  • Replenishing the Provider Relief Fund
  • Granting flexibility on accelerated and advance Medicare repayments
  • Extending or making permanent waivers that have improved patient care