Over the past year, you might have noticed pay rates are what they used to be.
For sure, compensation has seen a decrease, in some regions (or hospitals) more than others….and there’s isn’t a sign that it’s picking back up to where it was back during the peak of pandemic.
What we can say is that compensation is still very high, much higher than it was pre-pandemic.
There are many reasons why pay packages (compensation) have dropped and why you shouldn’t be concerned about the future of local and travel contract work.
Hospital Revenues Have Dropped
One of the biggest reasons that local and travel nurse assignments aren’t paying what they used to is that most hospitals have been operating at a loss since 2020 — “labor” has been one of the biggest reasons for that. A hospital’s biggest expense is the labor (paying people).
Various reports indicate that close to 70% of the nation’s hospitals, will end the year (2022) in the red – which is close to double what that number was in 2019.
To make things worse, health insurance companies have been tighter with their wallets (no shock to any of us) as well, putting up bigger fights on claims and denying coverage left and right. This puts the cost of care back onto patients.
Federal and State COVID Relief Funds are Drying Up
Leaders from all around the country have felt the pressure to declare the pandemic over, and there has been significantly less public support for emergency COVID measures, like relief funds for people and hospitals.
Even during the height of the pandemic, when you might think that healthcare providers were raking in more cash than they knew what to do with, hospitals were still regularly operating at a loss, and it took billions in government funds to keep them from imploding.
Relief funds are something that may come back if another surge were to hit, but since everyone pretty much wants to put the pandemic in the rearview mirror, even when infections and hospitalizations are still moderately high, it’s not likely-but who really knows?!
Overall Demand Has Dropped… But It’s Still High
It was a snowball effect that caused the surge in demand for travel work at the beginning of the pandemic.
Once hospitalizations waned and the need for round-the-clock care started to diminish, pay started decreasing, and more people returned to staff positions, which has driven down demand even further.
Even though there is still a workforce shortage across the board in hospitals, the skyrocketing expenses have caused most hospitals to shut down sections of the hospital and lower capacity limits instead of bringing on additional local and travel healthcare professionals to fill those gaps.
The good news is that this has done very little to curb the demand for local and travel healthcare professionals, and there is still a big market for healthcare professionals to make great money.
The Bottom Line
The pay rates that we saw in the height of the early pandemic and then with the Delta and Omicron variants are most likely gone for good (unless something new emerged). The money that was given out by hospitals and the government just was not sustainable long-term.
As we’ve seen in the last two years with the pandemic, the upcoming fall and winter months will likely see a surge in hospitalizations and another boost in demand for short and medium-term medical staff, but it’s unlikely that the pay will reach those historic high levels anytime soon.
On a positive note, compensation for healthcare professionals is still incredibly high and far more than what you’re going to get working in a staff position.
If you’re looking for your next assignment, give us a shout! 800-863-3666