By Samantha Liss

COVID-19 hospitalizations continue to rise as coronavirus cases surge across the U.S. This once again puts pressure on hospital operations and will likely put downward pressure on nonprofit hospital margins, according to a new report from Fitch Ratings. In some areas, hospitalizations are higher than they were during previous surges.

Hospital resources are spread thin as facilities are full or near capacity, forcing providers to hold off on non-emergent cases, which results in lost revenue.

As hospitalizations overwhelm facilities, operators need more staffing. But workers are in short supply, causing costs for contracted labor to rise. Fitch expects staffing shortages to persist into next year.

The U.S. is struggling to contain the latest wave of the COVID-19 pandemic, fueled by the highly contagious delta variant. The latest surge is putting greater pressure on hospitals that are already short-staffed with stretched resources.

The latest rise in cases comes despite readily available vaccines that prevent severe illness and hospitalization. The spread of misinformation has resulted in low uptake of the vaccine. Areas with low vaccination rates, such as the South, are seeing high community spread and hospitalization rates.

"Operations for hospitals in Covid-19 hotspots are stretched more significantly than any time during the pandemic, with hospitalization rates exceeding prior peaks and ICU beds at full capacity in some states," Fitch said the report.

More than 90,000 coronavirus patients are in the hospital as of Thursday. Hospitalizations are increasing fastest in states with low vaccination rates like Florida, Texas, Georgia, North Carolina and Alabama.

A separate report from hospital consultancy Kaufman Hall found evidence of the same operational pressures facing hospitals as volume recovery remains shaky.

Outpatient revenues fell 2% from June to July, suggesting that patients may again be delaying care as the cases remain unabated. The report also highlighted that operating minutes decreased from June to July.

These pressures may be especially acute for smaller hospitals, as the government is unlikely to release new federal stimulus to providers.

However, Fitch notes that liquidity remains at or near all-time highs for the nonprofit hospitals it covers, thanks in part to previous allocations of federal coronavirus relief dollars.