Travel nurses remain pricey, and it’s weighing on hospital profits

An underwhelming first quarter at the country’s biggest hospital chain shows the pandemic’s stranglehold on labor costs is proving to be more stubborn than many had expected.

Investor-owned HCA Healthcare knocked down its full-year revenue and profit expectations on Friday, a move that sent shares tumbling and triggered a flurry of questions from analysts about its travel nurse spending. The Nashville-based hospital chain is a stock market darling that tends to dwarf its peers profit-wise, so its results don’t bode well for the rest of the sector.

There are signs that at least some of Covid-19’s effect on nursing costs will be permanent. Not only did the pandemic convince many nurses to leave hospitals in favor of working in places like home health or urgent care, others have realized they prefer the travel nurse lifestyle, said Brian Tanquilut, a healthcare equity analyst at Jefferies.

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