Experts say expect continual increases in health care wages

Labor costs in health care will remain higher than pre-pandemic levels, prompting new recruitment and retention strategies.

Nearly all of the 73 healthcare administrators surveyed were having trouble filling vacancies as more medical staff burned out, according to a new study. survey from Kaufman Hall. As a result, almost three-quarters of managers raised the salaries of doctors, and about 90% raised the salaries of auxiliary personnel.

“Labor shortages are one, two and three top management priorities at the moment,” said Kevin Holloran, a senior director at Fitch Ratings, who expects the continued wage increases will reduce hospitals’ bottom line by a percentage point. “This is an absolutely chronic problem.”

Nurses, technicians and other medical personnel are in short supply as more people leave the industry in search of higher pay and less stressful jobs. There is also a labor shortage among hospital partners. Patients stay longer in hospital, according to health workforce experts, because clinicians cannot find adequately staffed mental health and long-term care facilities.

“Lack of staff limits the scope of services that can be provided, while a lack of support staff in areas such as environmental services makes it difficult to transfer patient rooms on time,” said Lance Robinson, managing director. director of Kaufman Hall.

In addition to increasing base wages, more than two-thirds of respondents offered signing bonuses and almost 60% paid extra overtime. One respondent to Kaufman Hall’s study expects a long-term upward wage adjustment.

“Wages are likely to rise everywhere,” Robinson said. “A shortage of clinical specialists can stimulate efforts to expand the portfolio of new specialists.”

Suppliers may increasingly resort to automation or outsourcing, where appropriate, to reduce labor costs. They will also try to strengthen their partnerships with nursing schools, experts said.

“We are losing more money than we can count with the wage premiums,” the chief financial officer of a large city health care system told Kaufman Hall researchers.

Constant supply shortages are also depleting resources. At least 81% of respondents recently faced a shortage of supplies of key goods, noticed a significant increase in prices and accumulated stocks.

Many health care systems are moving from just-in-time inventory strategies to more reliable safety stocks. They store more in their warehouses and reserve capacity on production lines.

Some are experimenting with 3D printing personal protective equipment and adding manufacturing in the US. Although with the onset of the pandemic, many of these endeavors have ceased.

“I think you’ll see some combination of old and new approaches to managing uncertainty or fluctuations in demand that contribute to the bullish whip effect,” said David Dobjikowski, assistant professor of supply chain management at the University of Arkansas.

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