U.S. nonprofit hospital margins will be negatively affected by an extreme nursing shortage for at least the next three to four years, according to a new report from Moody’s Investors Service.
To attract and retain nursing talent, many hospitals are increasing compensation and offering sign-on bonuses and attractive fringe benefits. However, these incentives are putting expense pressure on hospitals.
“Labor is the largest hospital expense and is increasing faster than total expense growth while outpacing revenue growth,” Safat Hannan, a Moody’s analyst, said. “The lack of qualified nurses will compound these expense pressures and negatively affect hospital margins.”
The nursing shortage is most prevalent in Florida, Georgia, Texas, California, Louisiana, Mississippi, Alabama and West Virginia, according to the report.