More than 50 percent of hospital expenses are typically associated with labor costs, which have increased significantly over the last three years as health systems used contract labor to fill some of the many gaps caused by ongoing staffing shortages.
When labor costs constitute such a high percentage of a hospital or health system's expenses, even a slight increase in these costs can have a significant effect on their total expenses and operating margins.
While there may be indicators of contract labor costs coming down, overall workforce expenses, as well as inflationary and supply pressures, will likely continue to challenge hospital administrators for the foreseeable future.
Here are 16 health systems’ labor costs in 2022 and in 2021:
1. HCA
2022 Labor costs: $27.7 billion
2021 labor costs: $26.8 billion
2. Mayo Clinic (Rochester, Minn.)
2022 labor costs: $9.2 billion
2021 labor costs: $8.7 billion
3. UPMC
2022 Labor costs: $9.1 billion
2021 Labor costs: $8.2 billion
2022 Labor costs: $8.87 billion
2021 Labor costs: $8.84 billion
5. AdventHealth
2022 Labor costs: $8.6 billion
2021 Labor costs: $7.4 billion
2022 Labor costs: $6.4 billion
2021 Labor costs: $5.7 billion
7. Intermountain Health (Salt Lake City)
*Merged with SCL Health on April 1, 2022
2022 Labor costs: $6.billion
2021 Labor costs: $4.1 billion
8. Community Health Systems (Franklin, Tenn.)
2022 Labor costs: $5.3 billion
2021 Labor costs: $5.3 billion
9. Novant Health (Charlotte, N.C.)
2022 Labor costs: $4.3 billion
2021 Labor costs: $3.9 billion
2022 Labor costs: $4 billion
2021 Labor costs: $3.8 billion
11. Sanford Health (Sioux Falls, S.D.)
2022 Labor costs: $3.5 billion
2021 Labor costs: $3.5 billion
12. Universal Health Services (King of Prussia, Pa.)
2022 Labor costs: $3.2 billion
2021 Labor costs: $2.9 billion
13. Allina Health
2022 Labor costs: $3.2 billion
2021 Labor costs: $2.9 billion
14. Hartford (Conn.) Healthcare
*Year ended Sept. 30, 2022
2022 Labor costs: $2.9 billion
2021 Labor costs: $2.6 billion
15. Duke Health (Durham, N.C.)
2022 Labor costs: $1.2 billion
2021 Labor costs: $1.1 billion
16. Northern Light
2022 Labor costs: $1.1 billion
2021 Labor costs: $1.1 billion