Three of the four major for-profit hospital operators in the U.S. saw labor expenses spike in the first quarter of this year.
HCA Healthcare, a 182-hospital system based in Nashville, Tenn., reported $6.94 billion in expenses tied to salaries and benefits in the first quarter of this year, a 10.1 percent year-over-year increase.
"In the first quarter, we had a number of positive volume and revenue indicators," HCA CEO Sam Hazen said in an April 22 earnings release. "Unfortunately, they were offset by higher than expected inflationary pressure on labor costs."
HCA ended the first quarter of this year with net income of $1.27 billion on revenue of $14.95 billion. In the same period of 2021, the company posted net income of $1.42 billion on revenue of $13.98 billion.
Salaries, wages and benefits made up $1.69 billion of Universal Health Services' expenses in the first quarter of this year, up from $1.5 billion in the same period a year earlier.
"Our operating results during the first quarter of 2022 reflect continued uncertainties related to the COVID-19 pandemic as well cost escalations related to the nationwide shortage of nurses and other clinical staff and support personnel," UHS said in an April 25 earnings release. "As a result, our labor costs were higher than anticipated, and patient volumes at our behavioral healthcare facilities were lower than anticipated, which unfavorably impacted our operating results during the first quarter of 2022."
King of Prussia, Pa.-based UHS ended the first quarter of this year with net income of $153.9 million on revenue of $3.29 billion. In the same period of 2021, UHS, which operates 28 acute care hospitals, posted net income of $209.1 million on revenue of $3.01 billion.
Community Health Systems, an 83-hospital system based in Franklin, Tenn., reported expenses tied to salaries and benefits of $1.33 billion in the first quarter of this year, up from $1.3 billion in the same period a year earlier. Company leaders said they expect the labor pressures to continue.
"Moving through the second quarter and the remainder of the year, we anticipate contract labor rates to remain elevated, however, we expect our operational momentum to continue, as we anticipate capturing deferred healthcare demand, benefitting from recent strategic investments, and continuing the execution of the company's margin improvement program," Tim Hingtgen, CEO of CHS, said in an April 27 earnings release.
CHS ended the first quarter of this year with a net loss of $1 million on $3.1 billion in revenue. The company reported a net loss of $64 million on revenue of $3 billion in the first quarter of 2021.
Dallas-based Tenet Healthcare was the only major for-profit hospital operator to see labor expenses decline in the first quarter of this year. The company reported $2.18 billion in expenses tied to salaries, wages and benefits in the first quarter of 2022, down from $2.2 billion in the same period a year earlier.
The company, which operates 60 acute care and specialty hospitals, ended the first quarter of this year with net income of $139 million on revenue of $4.75 billion. In the same period of 2021, Tenet reported net income of $97 million on revenue of $4.78 billion.