While demand for medical services is resilient, the biggest issue remains the sector’s ongoing struggle with labor costs, according to a March 21 S&P report.
The difficult labor cost situation will improve by 2023, but it will remain a big burden on hospitals and healthcare providers, even as they move to full-time instead of contract staff.
“In our opinion, the cost of labor will be the most important factor affecting the industry in the next few years,” the report says.
In the short term, such problems will mean a likely stabilization in the creditworthiness of many health care companies in 2023 after what has been described as a “tough year” in 2022. volumetric pressures.
“There is no demand problem in the industry,” S&P notes. “Demand for healthcare services, despite all the disruptions we have seen over the past few years due to the pandemic, remains robust and resilient, reflecting an aging population, healthcare needs and technological improvements. While the cost and availability of staff (especially nurses) will remain a long-term issue for the industry, we expect wage inflation to ease from 2022 levels but not return to pre-pandemic levels.”