Healthcare pay seems to have risen and ‘reset’

Despite slowing growth in year-over-year average hourly outlays, payrolls at U.S. hospitals and outpatient clinics may have plateaued at permanently elevated levels.

That’s largely because offering premium pay was a popular strategy for filling clinical positions in the immediate wake of the COVID crisis.

The observation is from the credit rating agency Fitch Ratings, which just released the September edition of its labor tracker for hospitals and healthcare systems.

Fitch reports that payrolls have grown over the past several months even though average hourly wages have collectively stagnated. From these data points, the Big Three credit rater extrapolates two primary conclusions:

  1. Recruitment and retention efforts are reducing job openings—but with increased baseline staffing rates that have likely become the new normal for the sector.  
  2. Generally reduced seasonal cases of COVID, flu and RSV have helped to reduce the operational strain on the U.S. healthcare system that resulted from staffing shortages and competition for a limited supply of nurses.

Fitch further finds decreasing invoices for external contract labor in 2023 compared to 2022.

If the labor market holds steady to fill open positions and COVID admissions don’t spike to create shortfalls of nurses and other frontline workers, Fitch comments, health systems “should be able to manage through expense challenges over the next few years to improve profitability gradually.”


Given the acute care sector’s reset of wages to a higher level, management teams are expected to turn to additional levers to improve operations, including payer contract negotiations, supply chain/purchased service efficiency initiatives, capacity optimization by reducing average length of stay, adjusting staffing and eliminating/consolidating less profitable service lines, corporate overhead reductions and the exiting of financially challenging markets.

Fitch also reports unfilled positions across healthcare and social assistance have fallen from 9.3% in March 2022 to 7% in July 2023.

Meanwhile resignations in these fields peaked in May of this year at 2.9% before falling back to a still-high 2.3% as of July, according to Fitch.

Access the September report here.

Dave Pearson

Dave P. has worked in journalism, marketing and public relations for more than 30 years, frequently concentrating on hospitals, healthcare technology and Catholic communications. He has also specialized in fundraising communications, ghostwriting for CEOs of local, national and global charities, nonprofits and foundations.

Around the web

American College of Cardiology President B. Hadley Wilson, MD, discussed why the ACC and other leading cardiology groups are so eager to create a new, independent medical board. This has been a long-term goal for many years, he said, and now it may become a reality. 

Last week brought the latest in an occasional series of conversations on AI between governmental leaders and Big Tech honchos.

Programs managed by H-E-B, Kroger, Mark Cuban Cost Plus Drug Company and Walmart appear to offer the most options for CVD patients. When it comes to AFib and heart failure, however, researchers believe the choices could be improved. 

Trimed Popup
Trimed Popup