Report Highlights Soaring Staffing Costs for Pa. Hospitals

July 27, 2022

Pennsylvania hospitals saw staffing costs surge to new highs as they responded to the Omicron-fueled spike in COVID-19 hospitalizations during the first quarter of 2022.

The Pennsylvania Health Care Cost Containment Council’s (PHC4) latest COVID-19 Disaster Emergency Report found hospitals throughout the commonwealth incurred a combined $202.3 million in additional staffing costs attributable to COVID-19 during January–March 2022. That’s the highest of any quarter since the pandemic began and nearly 25 percent higher than the first quarter of 2021, which had the second-highest spike in staffing costs.

The report—which PHC4 released this week—adds new context to reports of hospitals suffering a devastating first quarter financially. Hospitals throughout Pennsylvania and the nation have seen staffing costs soar as they’ve been forced to increasingly rely on contract labor amid a historic workforce crisis.

Here’s what to know from the latest report:

• Staffing costs are rising sharply. Hospitals’ 2022 first quarter COVID-related labor expenses more than doubled from $92.8 million reported for the fourth quarter of 2021. However, part of that increase is attributable to an increase in the number of hospitals reporting data to PHC4 (data for the first quarters of 2021 and 2022 includes 71% of Pennsylvania hospitals compared to 51% for the fourth quarter of 2021).
• Staffing is hospitals’ biggest COVID-related expense. Pennsylvania hospitals have incurred nearly $1.1 billion total in additional staffing costs as a result of the pandemic, accounting for 43.8 percent of total COVID-related expenses. Only revenue losses—totaling $5.1 billion and occurring mostly during the first year of the pandemic—have played a greater role in the pandemic’s total effect on hospitals’ finances.
• The pandemic continues to be financially devastating for hospitals. Pennsylvania hospitals’ combined expense increases and revenue losses attributable to the pandemic were $418.8 million for the first quarter of 2022, bringing the total since the start of the pandemic to more than $7.6 billion.

“The data shows that COVID-19 related costs, due to increased staffing and labor costs continue to increase.” said Barry D. Buckingham, PHC4 executive director.

The report is available online.