Moody’s predicts Medicare advance repayments, labor costs among hospitals’ top credit challenges in 2022

Becker's Healthcare February 2, 2022
Alia Paavola

There are several factors denting hospitals’ profitability in 2022, but the largest will continue to be high labor costs, according to a new report from Moody’s Investors Service.

Since labor is the primary driver of health systems’ expenses, Moody’s said high labor costs and staffing shortages will be the biggest challenge to overcome.

The “shortage will increase competition for such workers, prompting health systems to pay higher wages, expand benefit packages and spend more on recruitment and retention efforts. As a result, higher labor costs will be the main constraint on margin growth for health systems in 2022,” Moody’s said.

Another challenge for health systems this year is the scheduled repayment of Medicare advances, which will cut into...

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