Twenty large integrated delivery networks spent more than $9 billion combined on contract labor in one year, according to a data set provided to Becker's Hospital Review by Definitive Healthcare.
The average contract labor spend among hospitals more than doubled between 2011 and 2020, with many hospitals and health systems now making concerted efforts to curb this expense category. In 2022, individual hospital spending on this workforce category spanned from a few thousand dollars per year to more than $210 million, according to Definitive Healthcare, a company that provides data, analytics and analyses on more than 8,000 hospitals.
After consecutive months of negative operating margins on average, many hospitals and health systems are trying to lower their contract labor expenses. The CFO of Franklin, Tenn.-based Community Health Systems, for example, has a goal to halve contract labor spending in 2023.
Below are 20 integrated delivery networks with the highest total contract labor expenses as ranked by Definitive Healthcare based on an analysis of more than 1,000 integrated systems and Medicare cost reports. Spending reflects the most recent 12-month fiscal year tracked by Definitive in the product. Data was accessed Jan. 12.
1. Kaiser Permanente (Oakland, Calif.)*
Contract labor expense: $3.14 billion*
Number of hospitals: 39
2021 operating revenue: $93.1 billion
*Note: The vast majority of Kaiser Permanente contract labor expenses are for staffing provided by Permanente Medical Groups in 11 locations.
2. Banner Health (Phoenix)
Contract labor expense: $716.42 million
Number of hospitals: 30
2021 operating revenue: $12.4 billion
3. CommonSpirit Health (Chicago)
Contract labor expense: $650.81 million
Number of hospitals: 140
2021 operating revenue: $33.3 billion
4. HCA Healthcare (Nashville, Tenn.)
Contract labor expense: $583.17 million
Number of hospitals: 186
2021 operating revenue: $58.8 billion
5. Tenet Healthcare (Dallas)
Contract labor expense: $486.84 million
Number of hospitals: 61
2021 operating revenue: $19.5 billion
6. NYC Health and Hospitals (New York City)
Contract labor expense: $383.52 million
Number of hospitals: 11
2021 operating revenue: $10.1 billion
7. AdventHealth (Altamonte Springs, Fla.)
Contract labor expense: $374.85 million
Number of hospitals: 46
2021 operating revenue: $14.9 billion
8. Trinity Health (Livonia, Mich.)
Contract labor expense: $340.3 million
Number of hospitals: 88
2021 operating revenue: $21.5 billion
9. Providence (Renton, Wash.)
Contract labor expense: $327.57 million
Number of hospitals: 52
2021 operating revenue: $27.33 billion
10. Ascension Health (St. Louis)
Contract labor expense: $284.2 million
Number of hospitals: 139
2021 operating revenue: $27.2 billion
11. BJC HealthCare (St. Louis)
Contract labor expense: $256.8 million
Number of hospitals: 14
2021 operating revenue: $6 billion
12. Christus Health (Irving, Texas)
Contract labor expense: $230.3 million
Number of hospitals: 60
2021 operating revenue: $6.7 billion
13. Community Health Systems (Franklin, Tenn.)
Contract labor expense: $214.08 million
Number of hospitals: 79
2021 operating revenue: $12.4 billion
14. Ochsner Health System (New Orleans)
Contract labor expense: $211.63 million
Number of hospitals: 47
2021 operating revenue: $5.9 billion
15. Universal Health Services (King of Prussia, Pa.)
Contract labor expense: $209.09 million
Number of hospitals: 28 (acute care)
2021 operating revenue: $12.6 billion
16. Bon Secours Mercy Health (Cincinnati)
Contract labor expense: $206.41 million
Number of hospitals: 48
2021 operating revenue: $11 billion
17. RWJBarnabas Health (West Orange, N.J.)
Contract labor expense: $177.88 million
Number of hospitals: 12
2021 operating revenue: $6.6 billion
18. Johns Hopkins Health System (Baltimore)
Contract labor expense: $174.96 million
Number of hospitals: 6
2021 operating revenue: $7.8 billion
19. Adventist Health (Roseville, Calif.)
Contract labor expense: $174.40 million
Number of hospitals: 22
2021 operating revenue: $5.2 billion
20. UPMC (Pittsburgh)
Contract labor expense: $159.04 million
Number of hospitals: 40
2021 operating revenue: $24 billion