A shortage of registered nurses is hamstringing profitability in one of Kindred Healthcare’s largest business units.

Company leaders said in an earnings call with investors Tuesday morning that in some geographic areas, the company is struggling to find nurses to fill shifts.

The Louisville-based hospital and rehab center operator had said Monday evening that it incurred a net loss of $2.1 million in the fourth quarter as results were dragged down by rising restructuring costs and higher income taxes.

The company also said that profitability in its hospital division, which accounts for about a third of revenue, was reduced in part by higher labor costs.

Kindred said it is experiencing shortages of registered nurses in long-term care facilities, especially in the rural areas and the Midwest.

“It is really simply in some of these geographies that I’ve talked about hard to find nurses to actually fill shifts,” CFO Stephen Farber told analysts.

Executives also said that they were taking a multipronged approach to address the problem, which includes reducing the number of employees who join the company only to leave within the first two months of employment.

“I think labor in this unemployment environment with the aging population of nurses is going to be something we’re going to continue to fight for the next couple of quarters,” Farber said.

NSI Nursing Solutions, a nurse recruitment and retention firm, said in its most recent report that while turnover for hospital staff was leveling off, the turnover rate for registered nurses was still getting worse.

About a third of hospitals in 2015 reported an RN vacancy rate of at least 10 percent, NSI said.

“It is clear that the RN labor market continues to tighten resulting in excess labor cost utilization,” NSI said.

NSI won’t release its new report until April, but Michael Colosi, the company’s executive vice president for strategy and business development, told Insider that in 2016, the shortage of registered nurses got even worse than the year before.

The shortage is caused in part by demographic shifts, according to the American Nurses Association. The number of Americans age 65 and older is increasing, as is the average age of nurses. In addition, the ANA said, the Affordable Care Act provided millions of additional people with access to health care, which also increased the need for nurses.

The median pay for registered nurses in 2015 was $32.45, according to the Bureau of Labor Statistics. The agency predicted that between 2014 and 2024, the nation would need another 439,000 RNs. The occupation’s growth rate, at 16 percent, is much faster than average, the BLS said.

Kindred CEO Benjamin Breier on Tuesday said that the company was getting plenty of interest for the skilled nursing facilities that it is trying to sell and that the company is focusing on price and simplicity of the deal. The CEO said that Kindred could sell the facilities to one operator but also could sell smaller pieces to several buyers.

Kindred shares were up about 10 percent in late-morning trading. Trading volume was significantly above average. Broader markets showed little change.

Boris Ladwig is a reporter with more than 20 years of experience and has won awards from multiple journalism organizations in Indiana and Kentucky for feature series, news, First Amendment/community affairs, nondeadline news, criminal justice, business and investigative reporting. As part of The (Columbus, Indiana) Republic’s staff, he also won the Kent Cooper award, the top honor given by the Associated Press Managing Editors for the best overall news writing in the state. A graduate of Indiana State University, he is a soccer aficionado (Borussia Dortmund and 1. FC Köln), singer and travel enthusiast who has visited countries on five continents. He speaks fluent German, rudimentary French and bits of Spanish, Italian, Khmer and Mandarin.


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