(The Center Square) – Labor cost pressures are forcing Illinois hospitals to make hard decisions, like cutting services.
A national imbalance between supply and demand for nurses has led to an increase in what hospitals shell out to attract nurses.
A.J. Wilhelmi, Illinois’ Health and Hospital Association’s president and CEO, says 50% of a hospital’s budget is for staff, and over the past year, their hospitals have experienced a 20% increase in staffing costs.
“If 50% of their annual budget has seen an increase of 20% over the past year, which is a significant increase, that is going to present serious financial strain and put hospitals in a position to make difficult decisions,” Wilhelmi told The Center Square.
The biggest factor contributing to upward pressure on nurses’ salaries is the exorbitant rate charged by agencies for traveling nurses.
“The increased reliance on traveling nurses during the pandemic has really dramatically increased costs and created significant financial pressure,” Wilhelmi said.
Another factor is the worker pool being drained by early retirements spurred by pandemic burnout, he said.
The increase in costs is having an effect.