May 2, 2023 – Vizient released its latest Workforce Intelligence Report, finding that regular nursing hours have begun to stabilize but continue to be supplemented by overtime and contract labor hours at higher than pre-pandemic levels. The report, a collaboration between Vizient and Vaya Workforce, demonstrates how staffing shortages are negatively impacting hospital operating margins, and potentially, patient care.
The latest data reflects the continued struggle of providers to retain full-time nurses since the pandemic and their reliance on costlier contract and overtime labor to deliver care. For example, while the percent of licensed nurse turnover has begun to trend downward, it is currently around 7%, about 47% higher than the turnover rate prior to the pandemic.
The report outlines current and projected staffing challenges and highlights steps providers can take to mitigate the effects of nurse burnout and retain optimal nurse staffing levels. Retention is critical, as it can cost up to $88,000 to replace a registered nurse, according to at least one study.
Report findings include:
- The impact of high labor costs on hospital margins: Even while nursing unit labor expense and operating expense have greatly improved in a half a year, down 34% and 7% respectively, they are still above pre-pandemic levels, impacting operating margins, which remain between -0.5% and -1%.
- Travel nurse demand remains high: The need for contract labor has abated somewhat but is not solved: Projected demand for travel nurses has decreased since mid-2022 but is still 15% higher than pre-pandemic demand, and the hourly rate continues to be projected 15% above pre-pandemic rates as well.
- Impact to patient care: As patient days rise, a gap between expected and observed patient length of stay is widening. Burch attributes this to a variety of factors, including workforce shortages.