How 25 health systems' labor costs are trending

Andrew Cass - Friday, September 13th, 2024

The hospital workforce is critical to the care process and is most often the largest expense on a hospital or health system's balance sheet. Even before the pandemic, labor expenses — which include costs associated with recruitment and retention, employee benefits and incentives — accounted for more than 50 percent of hospitals' total expenses, according to the American Hospital Association.

As a result, a slight increase in labor costs can have a tremendous effect on a hospital or health system's total expenses and operating margins. Hospitals across the country are focused on managing the premium cost of labor, while recruiting and retaining talent remains a priority, and the cost of supplies and drugs also increases due to inflation.

Here's how 25 health systems' labor costs are tracking based on the results of their most recent financial documents.

Note: This is not an exhaustive list. Health systems' labor costs are for the three months ended June 30. The year-over-year percentage increase/decrease is also included.

Allina Health (Minneapolis)
Q2 salaries and benefits: $853.6 million (-1.2% YOY)

Ardent Health (Nashville, Tenn.)

Q2 salaries and benefits: $624.1 million (+4.3% YOY)

Beth Israel Lahey Health (Cambridge, Mass.)

Q2 salaries and benefits: $1.5 billion (+27.5% YOY)

Bon Secours Mercy Health (Cincinnati)

Q2 employee compensation: $1.5 billion (-1.2% YOY)

Cleveland Clinic

Q2 salaries, wages and benefits: $2.3 billion (+8.2% YOY)

Community Health Systems (Franklin, Tenn.)

Q2 salaries and benefits: $1.3 billion (-0.7% YOY)

HCA Healthcare (Nashville, Tenn.)