Healthcare’s Great Resignation: Cost & Care Crisis

Healthcare costs Soar as Labor Shortages Fuel Contract Worker Boom – A Looming Crisis for employers

Washington D.C.- June 5, 2025 – A perfect storm of pandemic fallout and chronic workforce shortages continues to drive up healthcare costs, with a particularly sharp increase in reliance on expensive contract labor. New analysis reveals the financial strain on hospitals and healthcare systems is far from over, and threatens to substantially impact employer-sponsored health coverage and access to care.

The Great Reshuffle, Not Resignation: While initial reports in early 2022 suggested a mass exodus of healthcare workers, the reality is more nuanced. Data from sources like Morning Consult and USA Today/Ipsos polls indicated nearly 20% of healthcare workers had quit as February 2020, and 23% were considering leaving. However, a deeper dive by the Altarum Institute showed hospital workforces only decreased by 1.8% during the same period. The key takeaway? Workers aren’t leaving healthcare, they’re moving within it – often to higher-paying positions.

Contract Labor Costs Explode: This internal shift has created a surge in demand for temporary staff, driving up costs dramatically. A recent report from AHA and Syntellis shows contract labor expenses for hospitals and health systems increased by a staggering 258% between 2019 and 2022. Full-time equivalent contract workers jumped 139% over the same timeframe. The New jersey Hospital Association reported a tripling of agency and travel staffing costs in 2021, adding an extra $450 million in expenses for its members alone. Nurses, in particular, have seen opportunities to triple their hourly rates by taking travel assignments.

Why This Matters to You: This isn’t just a hospital problem. The escalating costs are poised to be passed on to employers and unions who bear a critically important portion of US healthcare expenses. After a decade of health coverage premiums already outpacing general inflation (rising 47% versus 23

What are the most effective strategies for healthcare facilities to improve work-life balance for their staff, given the current pressures of the Great Resignation?

The healthcare industry is grappling with an unprecedented crisis: The Great Resignation. This mass exodus of healthcare professionals – including nurses, doctors, and support staff – is deeply impacting healthcare costs and the quality of patient care. Understanding the root causes, exploring the ramifications, and identifying potential solutions are crucial if we are to safeguard the future of healthcare as we know it. The impact on services and patients is devastating. Other search terms include: Healthcare workforce shortage, Hospital staffing crisis, Nursing shortage, physician burnout, and healthcare cost increase.

The Perfect Storm: Driving Factors Behind the Exodus

Several interconnected factors contribute to the ongoing healthcare workforce shortage. These pressures have combined to create this crisis.

• Burnout and Overwork: The COVID-19 pandemic dramatically strained healthcare systems.Staff faced overwhelming patient loads, long hours, and the emotional toll of witnessing patient suffering and death. Physician burnout rates soared. Prolonged exposure to trauma,coupled with a lack of support,led many to seek less demanding environments.
• Compensation and Benefits: While some feel underpaid,the demand has been driven by the increased workload. Some healthcare workers are compensated poorly for the hard work and time they put in, and as an inevitable result, they are leaving the workforce. The healthcare industry is not immune to wage stagnation. Competitive offers and better benefit packages elsewhere also proved too tempting for many healthcare professionals.
• Work-Life Balance: The demanding nature of healthcare often leaves little room for personal life. Long shifts, on-call hours, and unpredictable schedules contribute to chronic stress and fatigue. For many, a better work-life balance became a priority.
• Lack of Support and Resources: Healthcare workers need the resources to handle the increased demand, but resources can sometimes be in short supply. Inadequate staffing, insufficient equipment, and a lack of mental health support for staff further exacerbate these conditions.

Real-World Examples of Staffing Crisis Impact

A hospital in rural Ohio saw a 30% decrease in nursing staff in 2022. This led to the temporary closure of several beds and delayed patient admissions.

Emergency rooms across the country are experiencing record wait times due to staff shortages.

Soaring Costs: The Financial Fallout

The healthcare staffing crisis directly fuels rising costs in several ways:

• Increased Labor Costs: Hospitals and clinics are forced to offer higher wages, signing bonuses, and other incentives to attract and retain staff. The cost of recruiting and training new employees also adds to the financial burden.
• Overtime Expenses: when facilities are short-staffed, existing employees are frequently scheduled for overtime, which is paid at premium rates. This can led to a strain on both hospital budgets and employee health.
• Reduced Efficiency: Short staffing frequently leads to delayed procedures,increased medication errors,and reduced productivity.This translates to longer hospital stays and increased costs per patient.
• Revenue Loss: Reduced capacity due to staff shortages, like the inability to staff all beds, means hospitals are treating fewer patients. some specialist operations are also at risk. This leads to a decrease in revenue.

The Impact on Patient Care

The ripple effects of the healthcare workforce crisis extend directly to patient outcomes:

• Reduced Access to Care: Patients are experiencing longer wait times for appointments, procedures, and tests. Some rural communities are losing access to specialized care altogether.
• increased Medical Errors: Fatigued and overworked staff are more susceptible to making errors. This could be giving the wrong dosage of medication or diagnostic mistakes.
• Decreased Patient Satisfaction: Overwhelmed staff have less time to spend with each patient. Patients feel rushed and uncared for, leading to lower satisfaction scores.
• Worsening Health Outcomes: Delayed or inadequate care can lead to the worsening of health conditions. Chronic conditions may rapidly deteriorate.

Area Affected	Specific Impact
Surgical Procedures	Delayed or postponed due to staff shortages.
Emergency Rooms	Longer wait times and overcrowding.
Primary Care	difficulty obtaining appointments and check-ups.

Possible Solutions: Finding a Path Forward

Addressing the healthcare staffing crisis requires a multi-pronged approach.Potential solutions include:

• Improving Work-Life Balance: Implementing scheduling adaptability, reducing mandatory overtime, and offering on-site childcare services can considerably improve work-life balance.This includes having more flexible work schedules that are not so demanding.
• Competitive Compensation and Benefits: Healthcare organizations need to offer competitive salaries, comprehensive health insurance, retirement plans, and financial incentives to attract and retain staff.
• Investing in Mental Health Support: providing access to mental health services, including therapy sessions and stress reduction programs, is crucial for supporting healthcare workers.
• Streamlining Administrative Tasks: Reducing the burden of administrative tasks and paperwork frees up healthcare professionals to focus more on patient care.
• Leveraging Technology: Implementing telehealth platforms, remote monitoring devices, and other health technologies can improve efficiency and reduce the workload on staff, allowing for more flexibility.
• Expanding Training and Education: Investing in scholarships, loan forgiveness programs, and expanded training opportunities can help attract and train a new generation of healthcare professionals.

Practical Tips for Healthcare Facilities

Hear are five tips to help healthcare facilities manage this crisis:

1. review pay scales. Be sure you are compensating your staff fairly.
2. Assess schedules. How can you offer more flexible schedules to staff so that they can maintain a work/life balance.
3. Provide mental health care for your staff. Ensure this is an easy benefit for the staff to use.
4. Reward staff. Give incentives for outstanding work and recognition.
5. Use technology. Use technology to streamline administrative tasks.

Addressing the healthcare’s Great Resignation requires a commitment from policymakers, healthcare providers, and the community to improve working conditions, offer competitive compensation, and prioritize the health and well-being of healthcare professionals. the consequences of inaction are too significant to ignore. Failing to address it will be very serious to the quality of care. The solutions require that we prioritize the people who provide care. If we address the issues now, we can get this industry back on track.