The nursing shortage is hitting Warren General Hospital in the wallet.

An inability to hire and retain registered nurses has forced the hospital to contract with outside agencies and travel nurses to supplement its existing staff.

During his fiscal year operating report to the hospital system board, CEO Rick Allen said the hospital is currently filling 30 nursing positions this way.

It isn’t cheap.

According to Allen, the practice is costing the hospital an additional $6 million in staffing expenses.

“The supply of RNs is very, very low,” he noted. “We need to supplement what we have.”

To shore up shortages, the hospital instituted a number of initiatives to try to hire RNs in-house.

The system offers up $15,000 as a sign-on bonus for RNs who make a three-year commitment to the job, an employee program offers bonuses to employees that refer candidates to fill RN positions and the hospital is offering “enhanced benefits.”

“Any and every way that we can find these RNs, we’ve got to do it,” Allen said.

Nursing isn’t the only area costing the hospital.

Negotiated salary increases for union employees represented an additional $1 million in staffing costs in the past year. The hospital is scheduled to negotiate salaries for some of those employees next summer.

Another area hitting hospital finances is increased drug pricing due to pharmaceutical companies circumventing required pricing guidelines.

According to Allen, drug manufacturers have been finding loopholes to avoid the guidelines under Section 340B of the Public Health Service Act.

Under 340B, drug manufacturers who participate in Medicaid must provide outpatient drugs at a discount to healthcare organizations that serve a large number of uninsured and low-income patients.

Avoiding the discounted pricing means higher pharmaceuticals costs for the hospital.

While revenue for the hospital is growing, increased costs and general inflation have outpaced it. The hospital ran at a financial loss last year for the first time in five years.