Survey: Hospitals spent more than $1B on OT in 1st 2 years of pandemic

Report from N.J. Hospital Association says increased costs also include nearly $1B spent bringing in workers from outside

New Jersey hospitals spent more than $1 billion on overtime during the first two years of the pandemic — and spent nearly $1 billion to bring in outside workers to supplement their workforce needs, according to a survey released by the New Jersey Hospital Association.

The dollar costs represent just some of the staggering statistics gained from a survey of the state’s hospitals in early February to gauge how the workforce shortage that has struck virtually every employment sector has specifically challenged hospitals.

Cathy Bennett. (File photo)

NJHA’s Center for Health Analytics, Research and Transformation analyzed the responses, gathered from 70% of the state’s hospitals.

The survey details how much New Jersey hospitals are feeling the impact of the nationwide workforce shortage, with an industry survey showing rising staff vacancy rates even as hospitals triple their spending on supplemental staffing from traveler and agency nurses.

The survey revealed that hospitals spent approximately $499 million for overtime in 2020 and are projected to have spent approximately $592 million in 2021.

Despite this, hospitals also had to spend approximately $222 million for agency and traveler staff in 2020 and are projected to have spent more than three times that amount — $670 million — in 2021. This represents an increase of 202% in just 12 months.

The NJHA’s report, Healthcare Employers in Dire Need of an Expanded Workforce Pipeline, shows that:

  • For registered nurses, the vacancy rate increased 64%, from 8.2% in 2020 to 13.4% in 2021. The vacancy rate measures the number of unfilled positions relative to the total number of employees;
  • The vacancy rate for nurse extenders (which include positions such as certified nurse aides) increased 37%, from 12.4% in 2020 to 16.9% in 2021;
  • The reliance on agency registered nurses increased 66%, from 3.6% in 2020 to 6% in 2021;
  • For nurse extenders, the reliance on agency staff increased 68%, from 2.9% in 2020 to 4.9% in 2021.

NJHA President Cathy Bennett said the pandemic is shining a light on the consistent staffing issues her members face.

“Hospitals have always faced cyclical staffing shortages, but the disruptive force of COVID-19 has created an unprecedented workforce plight across the entire continuum of care,” she said.

Bennett said the issue needs to be a priority conversation moving forward — and that future discussions include:

  • Assessing and implementing curriculum changes;
  • Opening more education slots for students interested in health care;
  • Increasing health care faculty;
  • Recruiting health care workers from disadvantaged communities;
  • Creating pathways so that health care is recognized among diverse groups for its meaningful, stable employment opportunities.

“Providers and policymakers have adopted short-term strategies to get us through the public health emergency, but it will require a coordinated strategic investment to rebuild the pipeline and bring people into these critically important jobs,” she said.