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The Price (and Value) of Hospital Contract Workers

It’s no surprise that contract staffing costs for hospitals have increased significantly since the start of the pandemic in 2020. As the demand for nurses, physicians and other staffing was at an all-time high, wages for these positions have also skyrocketed.

Let’s take a look at some significant numbers that relate to the cost of hospital contract labor:

  • 46 percent of hospital and health system leaders identify labor costs as the greatest opportunity for cost reductions, up significantly from the 17 percent of respondents who noted labor costs as their greatest opportunity to cut costs last year.

  • Contract labor demand increased 500 percent in fall 2021 compared with 2019

  • The hourly wage rate for contract nurses increased 106 percent between 2019 and 2022

  • The rise in contract labor from 2019 through March of 2022 led to a 37 percent increase in labor expenses per patient, equating to between $4,009 and $5,494 per adjusted discharge

Contract workers filled a necessary and important need in the last 2+ years, however in order to reduce costs, hospitals are looking again to fill and retain permanent positions vs. contract labor positions.

The cost of filling these contract positions have nearly doubled in some places since the pandemic. Why? On top of higher salaries, employers can also lose up to $9,000 per day on staffing delays. Additionally, staffing agencies often charge markups or conversion fees. For hospitals and healthcare systems, these fees add up.

At Hyr Medical, employers are charged only a flat monthly fee for the software-as-a-service platform. This means hospitals are gaining access to our large physician network along with cutting-edge technology that makes the entire hiring process fast, affordable, and quality-focused. Employers will save tens of thousands of dollars for every contract hire they make.


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