Contract labor costs may be easing but still top of mind

There may be signs of costs coming down when it comes to contract labor in the healthcare world, but such workforce costs, as well as inflationary and supply pressures, continue to cause anxiety for industry administrators, according to the Institute of Supply Management.

“Employment continued to improve, with comments suggesting hospitals have been able to shift from temporary, agency staffing to permanent employees,” said Nancy LeMaster, chair of the ISM.

However, “the pressure on hospital margins from inflationary conditions and labor and supply costs were top-of-mind concerns.”

The March 2023 Hospital ISM Report on Business, published April 7, registered a Hospital Purchase Managers Index of 53.4 percent in March, the 34th straight month of growth. An index reading above 50 percent indicates that the hospital subsector is generally expanding.

Some shortages persist in the supply chain, particularly with products made from resin, while there has been a shift away from personal protective equipment toward complex medical devices on the inventory side. Prices for supplies and pharmaceuticals generally remain elevated, the ISM said.

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