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”

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Trump Holds Campaign Style Rally In Florida To Get Republican Spotlight | WTVB | 1590 AM · 95.5 FM | Branch County’s voice

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Mayor vows to retain state cash for Sewerage & Water Board, regardless of metropolis’s large stimulus payout

Mayor LaToya Cantrell said the state has already allocated $ 20 million to the Sewerage & Water Board to incorporate a new Entergy substation planned for its Carrollton facility. It’s money she wants to keep despite New Orleans standing in line to receive a huge grant from the latest round of federal pandemic aid. Cantrell told an S&WB board meeting on Wednesday that she had heard Baton Rouge “rumble” about possible efforts to take back the state money. She said she would reach out to the New Orleans Legislative Delegation for assistance. The latest round of pandemic funds, part of the American Rescue Plan Act, includes $ 375 million for New Orleans – one of the largest grants for any U.S. city and by far the largest in Louisiana. Cantrell said money will offset the city’s spending and loss of tax revenue as a result of the COVID-19 outbreak. “No effort should be made to divert those (state) dollars that have been identified for the substation integration,” said Cantrell. The Sewerage & Water Board needs to borrow $ 34 million from Entergy’s finance department to pay for the substation, which is scheduled to go live in 2023. The state’s $ 20 million will be used to add this new power source to the facility’s existing grid, Ghassan Korban, executive director of the Sewerage & Water Board, said the utility will deploy nearly $ 30 million in federal funds that are already in place available for all of his power plant modernization plans. He is also filing an additional $ 46 million with the Federal Emergency Management Agency. Korban said the Sewerage & Water Board will tap multiple wells to spend $ 45 million on three more frequency converters needed for Entergy’s modern power generation, and hide it for use in its outdated drainage facility. A portion of $ 5 million will come from the 2019 Fair Share Agreement to align tourism tax revenue with urban infrastructure needs. Another $ 30 million will be borrowed from Entergy. Cantrell and other local officials are expected to explore several state ways to pay for Sewerage & Water Board projects. Without state or federal funding, the Sewerage & Water Board would likely have to reach out to customers to pay to upgrade its electrical grid. A series of 10% annual increases in S&W bills that started in 2013 ended last year. A rating service that reviews the utility’s ability to borrow money said a further increase in customer rate would likely be required if the government fails to pay the bill for their large-scale projects.

Mayor LaToya Cantrell said the state has already allocated $ 20 million to the Sewerage & Water Board to incorporate a new Entergy substation planned for its Carrollton facility. It’s money she wants to keep despite New Orleans poised to receive a huge allocation from the latest round of federal pandemic aid.

Cantrell told an S&WB board meeting Wednesday that she had heard Baton Rouge “rumble” about possible efforts to withdraw the state money. She said she would reach out to the New Orleans Legislative Delegation for assistance.

The latest round of pandemic funds, part of the American Rescue Plan Act, includes $ 375 million for New Orleans – one of the largest grants for a U.S. city and by far the largest in Louisiana. Cantrell said money was meant to offset the city’s expenses and lose tax revenue as a result of the COVID-19 outbreak.

“No effort should be made to divert those (state) dollars that have been identified for the substation integration,” said Cantrell.

The Sewerage & Water Board needs to borrow $ 34 million from Entergy’s finance department to pay for the substation, which is scheduled to go live in 2023. The state’s $ 20 million will be used to add this new power source to the facility’s existing grid.

Ghassan Korban, executive director of the Sewerage & Water Board, said the utility will already be putting $ 30 million in federal funds into its overall plans to modernize the power plant. It is also filing an additional $ 46 million with the Federal Emergency Management Agency, he said.

Korban said the Sewerage & Water Board will tap multiple sources to spend $ 45 million on three more frequency converters. This equipment is required to take advantage of Entergy’s modern form of electricity for use in obsolete drainage systems. A portion of $ 5 million will come from the 2019 Fair Share Agreement to align tourism tax revenue with the needs of the city’s infrastructure. Another $ 30 million will be borrowed from Entergy.

Cantrell and other local officials are expected to explore multiple government channels to pay for Sewerage & Water Board projects. Without state or federal funding, the Sewerage & Water Board would likely have to reach out to customers to pay to upgrade its electrical grid.

A series of 10% annual increases in S&W bills that started in 2013 ended last year. A rating service that reviews the utility’s ability to borrow money has determined that if the government fails to pay the bill for their large projects, further increases in customer rates would likely be required.