Hospitals are spending extra money to rent and retain well being care employees throughout the pandemic. That is dangerous for his or her margins.

Hospitals are facing staff shortages made worse by the COVID-19 pandemic, and Wall Street analysts are increasingly concerned that there are insufficient staff for these facilities, which is hurting margins.

“The surge in COVID-19 cases from the Delta variant continues to exacerbate hospital staff shortages, hinder recruitment and retention, drive up wages and hurt hospital profitability,” Moody’s Investors Service said Tuesday. “Over the course of the next year, we expect margins to decline in light of wage inflation, the use of expensive care agencies, increased recruitment and retention efforts, and expanded service packages that include more behavioral health services and offers such as childcare.”

There are several problems involved.

Nursing staff and doctors have been in short supply in some parts of the country for years. Many have burned out – and after 20 months of the pandemic, some are choosing to retire or quit. (A recent survey of 6,000 critical care workers found that 66% considered quitting nursing because of the pandemic.)

“There is no question that the labor market has been under pressure for some time with COVID activity,” said William Rutherford, CFO of HCA Healthcare Inc.
HCA, -0.77%,
one of the largest hospital chains in the US said at the Morgan Stanley Health Care Conference last month, according to a FactSet transcript of the presentation.

Then came the Delta variant and an increase in hospital admissions, which in particular increased the need for nurses to care for COVID-19 patients.

Many hospitals have had to limit or discontinue elective procedures, which are considered critical to their financial success, in order to focus their resources on these patients.

This includes Intermountain Healthcare, Utah’s largest hospital system, which began postponing all non-urgent procedures in 13 nonprofit hospitals due to lack of beds in mid-September. That same week, Idaho began rationing care to hospitals there, citing the “massive increase in COVID-19 patients requiring hospitalization in all areas of the state.”

“In some US regions, hospitals have suspended elective overnight operations, not only because of an increase in cases, but also because of insufficient staffing, which led to a decline in sales,” the analysts from Moody’s write in the report.

And finally some workers made up their minds quit or get fired instead of following the COVID-19 vaccination regulations introduced by some health organizations.

Add all these factors together and consider that salaries and benefits typically make up half the total cost of a hospital.

Hospitals now have to pay their workers more, including hiring more expensive temporary or travel nurses; spend more on social benefits and other “perks” to keep; and increase the amount of money they invest in recruiting clinical talent. (This is a good thing for healthcare recruitment agencies like AMN Healthcare Services Inc.
AMN, -0.33%
and Cross Country Healthcare Inc.
CCRN, + 1.69%,
Analysts say.)

“When COVID spikes occur, hospital beds will primarily be assigned to COVID patients and non-COVID admissions will be postponed,” Jefferies analysts wrote this week in a notice to investors on nonprofit hospitals. “If we leave the delta rise, we believe that demand for temporary nurses will weaken from current levels, but will remain elevated (lower placement rates compared to current average) as postponed admissions and procedures are rescheduled.”

The delta rise subsides, and the number of new cases, hospital admissions and deaths are falling. The current 7-day average for COVID-19 hospital admissions is 7,271 (as of Friday), according to the Centers for Disease Control and Prevention. That’s already lower than last week’s 7-day average of 8,378, but that doesn’t mean all hospitals aren’t ready.

“Even if the average daily COVID hospital stays are decreasing, we continue to see many hospitals and intensive care units across the country operating at full capacity,” said CDC director Rochelle Walensky on Wednesday during a briefing at the White House.

Read more about related coverage from MarketWatch:

New York health workers who are laid off for getting vaccinated are in most cases not eligible for unemployment benefits

“You have to do the right thing”: 50 health groups ask employers to prescribe COVID vaccines for workers – but one major obstacle remains

Court Upholds Houston Hospital’s Mandatory COVID-19 Vaccine Policy: “All Employment Has Restrictions On Worker Behavior”

County agrees to rent spending advisor for reduction cash

With $ 16.2 million in the Bartholomew County’s government under the American Rescue Plan (ARP), local officials have chosen to seek professional advice to ensure they are spending it properly.

Baker Tilly US, LLP – a Chicago-based accounting and advisory firm based in Indianapolis – made an offer to ensure that all Bartholomew County officials who shop with these funds are subject to strict federal guidelines.

The county will receive about $ 8 million on or before May 11, while the remaining $ 8.2 million will come in next year, said county auditor Pia O’Connor.

Under the agreement, Baker will charge Tilly a variable hourly rate for her advice, but the total amount of the contract, approved by the Bartholomew County Commissioners on Monday, cannot exceed $ 25,000 over the next two years, commissioner chairman Larry said Kleinhenz.

The offer was made less than a week after the commissioners and Bartholomew County Council reached an informal consensus that professional advice was needed.

During the council meeting on April 19, Kleinhenz warned that the county would face significant fines if the money was not spent according to the set criteria, including getting the money back.

O’Connor said while her office was able to ensure that the $ 2.68 million received almost a year ago through the Coronavirus Aid, Aid, and Economic Security (CARES) Act was properly used and allocated, the restrictions on these new agents are much greater and more specific.

“It’s one of those things that if we don’t spend this money properly we definitely don’t want to be able to pay it back,” O’Connor told commissioners.

Elected officials limit their spending on the following general areas:

Responding to the public health emergency related to COVID-19 or its adverse economic impact. This could include helping households, small businesses, nonprofits, or helping affected industries such as tourism, travel, and hospitality.

To respond to workers performing essential work during the public health emergency by providing award payment to eligible Columbus, Bartholomew County government and unqualified local government employees. The funds could also grant grants to certain employers who have eligible employees who do essential work.

For providing government services to the extent of reducing revenue for Columbus, the Bartholomew County Government, and unqualified local government entities due to the COVID-19 public health emergency. This provision would relate to the revenue generated in the last full fiscal year of the local government.

Necessary investments in water, sewer or broadband infrastructure as approved by the US Treasury Department.

In addition, the district is prohibited from using these funds to lower taxes, to increase pension funds or to finance the general expenses of the district.

But Commissioner Tony London said the relief fund has other buckets of money that could include millions for things like transportation, mental health care, infrastructure, rural broadband expansion and public health.

“Baker Tilly will also help us raise these funds,” said London. “That is part of their professional service. If money is available we have to try. “

The commissioners are expected to work with financial advisor Jason Semler, who worked for HJ Umbaugh and Associates until that firm was acquired by Baker Tilly in 2019.

The aid came after President Joe Biden signed a law on March 11 to approve aid to local and state governments.