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.
Hospitals' increased reliance on contract labor throughout the COVID-19 pandemic drove a crescendo in spending from $2.23 million in 2011 to $4.59 million in 2020. In 2022, 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 11 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 hospitals with the highest total contract labor expenses as ranked by Definitive Healthcare based on an analysis of 8,300 U.S. hospitals and Medicare cost reports. The average total contract labor expense among these 20 organizations is $141 million.
West Coast hospitals dominate the list, with 11 of the 20 hospitals being part of Oakland, Calif.-based Kaiser Permanente. Hospitals within the integrated systems of Altamonte Springs, Fla.-based AdventHealth, St.Louis-based BJC Healthcare, Dallas-based Tenet Healthcare, Phoenix-based Banner Health, Baltimore-based Johns Hopkins Health System, NYC Health and Hospitals, Albuquerque-based University of New Mexico Hospitals and Oklahoma City-based OU Health are also represented.
The following figures reflect 2021 spending; data was accessed in November 2022.
1. Fontana (Calif.) Medical Center*
$213.6 million
2. Oakland (Calif.) Medical Center*
$177.8 million
3. Los Angeles Medical Center*
$176.5 million
4. Kaiser Permanente Zion Medical Center (San Diego)*
$174.5 million
5. Roseville (Calif.) Medical Center*
$172.7 million
6. Santa Clara (Calif.) Medical Center*
$153.4 million
7. AdventHealth Orlando (Fla.)
$146.1 million
8. South Sacramento (Calif.) Medical Center*
$143.8 million
9. Sacramento (Calif.) Medical Center*
$134.6 million
10. Barnes-Jewish Hospital (St. Louis)
$132.8 million
11. Orange County-Anaheim (Calif.) Medical Center*
$132 million
12. Saint Vincent Hospital (Worcester, Mass.)
$130 million
13. University of New Mexico Hospital (Albuquerque)
$128 million
14. Banner-University Medical Center Phoenix
$125.5 million
15. Banner-University Medical Center Tucson
$123.7 million
16. Downey (Calif.) Medical Center*
$119.6 million
17. The Johns Hopkins Hospital (Baltimore)
$111.4 million
18. NYC Health and Hospitals-Bellevue (New York City)
$109.8 million
19. Manteca (Calif.) Medical Center*
$107.8 million
20. University of Oklahoma Medical Center (Oklahoma City)
$106.7 million
*Note: The vast majority of Kaiser Permanente contract labor expenses are for staffing provided by Permanente Medical Groups.