Hospitals still spending more on PPE, labor as result of COVID-19


Dive Brief:

  • Hospitals across the country have spent more than $3 billion on personal protective equipment since the start of the COVID-19 pandemic, though costs have steadily declined since the worst shortages experienced during the second quarter of 2020, according to an analysis from Premier, a group purchasing organization.
  • Before the pandemic, hospitals normally spent about $7 on PPE costs per patient per day. That figure shot to $20.40 during the second quarter of last year, and during the first quarter of this year was around $12.45 per patient per day, according to Premier.
  • Hospitals are also still paying more for qualified clinical labor — roughly $24 billion more in total per year compared to before the pandemic, according to another Premier analysis out last week.

Dive Insight:

PPE was in short supply early in the pandemic, spurring bidding wars and financially straining hospitals as they suffered from the budgetary fallout of canceled elective surgeries and other lucrative services.

While supply chain challenges have since eased and costs are down since their peak, hospitals are still spending more on PPE than before the pandemic, and consumption and demand remains strong in light of the delta variant, according to the report.

Premier used a database representing 30% of U.S. hospitals across all regions from September 2019 through last month to track spending trends, looking at costs for eye protection, surgical gowns, N95 respirators, face masks, exam gloves and swabs. It then calculated total costs measuring quantities used per patient, per day, multiplied by the percent change in pricing for the quarter.

Ultimately, hospitals are still using far more N95 respirators than they were prior to the pandemic.

Demand is still up for eye protection, surgical gowns and face masks, though pricing is close to pre-pandemic levels for those items. Costs for surgical gloves and N95 respirators are still above pre-pandemic levels, according to the analysis.

While most PPE costs have steadily declined for hospitals, other expenses have not, namely labor costs.

Contract labor costs have fluctuated, though they reached record highs amid COVID-19 surges, commanding record rates from providers. And nursing shortages, especially, have been so dire that hospitals are spending more on recruiting and retaining for the positions, boosting benefits and offering steep sign on bonuses.

Clinical labor costs are up 8% on average per patient, per day compared to before the pandemic, according to the earlier Premier analysis. That translates to about $17 million in additional annual labor expenses for the average 500-bed facility.

As of last month, overtime hours are up 52% since before the pandemic. The use of agency and temporary labor is up 132% for full-time employees and 131% for part-time employees.

The most expensive labor choices for hospitals are contract labor and overtime, typically adding 50% or more to an employee’s hourly rate, according to Premier.

For that report, Premier used a database with daily data from about 250 hospitals, bi-weekly data from 650 hospitals and quarterly data for 500 hospitals from October 2019 through August to analyze workforce trends among employees in emergency departments, intensive care units or nursing areas.

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