Inpatient admissions and emergency department visits are still well below pre-pandemic levels—and patients who are coming into the hospital are staying longer, driving up costs. Even as demand slowly rebounds, providers have been limited by worker shortages that have led to double-digit percentage increases in labor expenses.
These headwinds have fueled a perfect storm that will dent hospitals’ financial performance for at least two years, providers said. While health systems will fare differently based on their size and business diversification, organizations of all types will continue to retool their revenue streams and staffing strategies.
“If you add the challenges of the COVID-19 pandemic with the macroeconomic challenges of the world, it will take at least a couple of years for the healthcare industry to stabilize and turn around,” said Dr. Luis Garcia, president of the clinic division of Sanford Health, a not-for-profit integrated system. “We’ll be dealing with these challenges for years to come—a lot of what we are seeing right now has become the new normal.”
Nationally, at the end of March, inpatient admissions were 15% lower than they were in March 2019, and ED visits were down 17%, according to Collective Medical data from more than 1,000 hospitals in nine states across the country provided by Glenn Melnick, a health policy and economics professor at the University of Southern California.