But as hospitals have continued to hire, they have also undertaken extraordinary efforts to slow spending on wages and benefits, one snapshot of hospital finances shows.
A look at spending by 401 hospitals and single-state health systems found the 2010 median wage and benefit expense growth dropped for the second year. Wage and benefit spending grew 4.1%, last year's median shows, from 5.7% in 2009, said Moody's Investors Service.
Compare that to the median growth for salaries and benefit expenses in 2008 and 2007 of 8% and roughly 7.5%, respectively.
Such a tight grip on labor costs—which accounted for half of hospital expenses—helped hospitals sharply curb overall spending to match sluggish revenue growth, the ratings agency said. That strategy has largely protected hospital operating margins during the prolonged economic downturn, as we have reported previously.
The medians reflect spending by healthcare borrowers with credit ratings from Moody's for fiscal 2010, which covers the 12 months that end in June, September or December of that year, depending on the hospital.
Because fiscal years sometimes fall into two calendar years (for example, July 1, 2009-June 30, 2010), it's worth noting hospital hiring slumped in calendar 2010 and 2009. That may account for some of the slowdown in labor costs in the Moody's medians.
In calendar 2010, the monthly average hospital job growth totaled 3,100. In 2009, hospitals added 200 jobs per month, on average.
Perhaps more promising is average monthly hiring by hospitals so far this year (6,600 jobs) has outpaced the monthly average since January 2001 (6,000 jobs).
In a related story in this week's Modern Healthcare, my colleague Joe Carlson looks at possible changes to oversight of union elections—to which the American Hospital Association adamantly objects.
Finally, for those who are interested in the history of Labor Day, here's a U.S. Labor Department background report.
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