Report: Some Hospitals Face ‘Financial Ruin’ Due to Staffing Shortages

Hospitals across the country are facing “financial ruin” due to ongoing nursing shortages, Bloomberg reported on Tuesday.

According to the report:

The U.S. health-care profession is suffering its own Great Resignation, pushing more hospitals into financial distress just as a winter surge of the coronavirus hits. Across the country, hospitals are buckling under the strain of nursing shortfalls and the spiraling cost of hiring replacements.

A person familiar with the matter told the publication that Watsonville Community Hospital in California is going through bankruptcy because “those costs became too much to bear.” According to the report, shortages are worst at hospitals like Watsonville because they count on government funding to treat less financially stable patients and have fewer resources to keep up with the rising cost of keeping staff. 

“This is like survival stakes,” Steven Shill, head of the health-care practice at advisory firm BDO USA told Bloomberg. Shill added that  “whoever’s highest on the food chain and who has the biggest checkbook”  are the companies that come first and that staffing companies are “really, really, really gouging hospitals.”

Maureen May, who has worked for 30 years in a pediatric ICU, said it is the “worst nursing shortage that [she has] witnessed in [her] career.” According to the report:

The pain spreads beyond nurses. A report by human-resources firm Mercer this year estimated a shortfall of 3.2 million lower-wage workers, such as nursing assistants and home health aides, by 2026. Employers will also need to hire more than 1.1 million registered nurses in that period, Mercer said. Walsh said his hospital is also struggling to fill lab, respiratory therapist and administrative positions. 

According to the consulting firm Kaufman Hall, hospital labor costs have risen 12.6 percent.

Another company going bankrupt is Gulf Coast Health Care, a nursing home chain. The company is “pleading for permission to pay $4 million to staffing agencies and other wages before compensating landlords and other creditors with a higher priority payment.” The Gulf Coast Health Care was reportedly relying on staffing from outside agencies to deal with shortages, the company’s lawyer David Hurst said.

Scott Palmer, the spokesman for Oregon Nurses Association, said nursing shortages are the outcome of years of “underinvestment” in pay and training and have been made worse by the coronavirus pandemic.

“When we talk to our nurses, they are screaming about safe staffing,” Palmer said. 

Chief executive officer of digital health-care staffing company Vivian Health Parth Bhakta told Bloomberg that facilities are also having a hard time retaining nurses because temporary rates for traveling nurse positions are higher. Vivian Health’s website reportedly shows traveling nurse positions that pay $13,000 a week — much higher than an ICU job paying $30 an hour. 

“Permanent jobs aren’t compelling enough for people to stay,” Bhakta said. 

Bhakta said he thinks the overall strain will mean federal pandemic aid to hospitals will have to be extended.  

“With aid ending, it’s going to be difficult to survive, and ultimately, the government is going to have to continue to step in,” he said. 

The report cited a survey from the American Association fo Critical-Care Nurses, which found that two-thirds of nurses polled have considered leaving the medical field because of the pandemic. Twenty-one percent  of those polled in a study for the American Nurses Foundation said they plan on leaving their jobs in six months, and another 29 percent are considering doing so. 

Shortages could be exacerbated by vaccine mandates for healthcare workers. Another report found that some hospitals, healthcare providers, and nursing homes stand to lose up to a third of their workers for not complying with President Joe Biden’s coronavirus vaccine mandate by January 4.