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Why Hospital Labor Expenses Have Skyrocketed and How to Combat it

According to a recent report by Kaufman Hall, March 2022 saw an increase in hospitals’ labor cost by more than a third from pre-pandemic levels.

The main contributor to this jump? Increased temporary and traveling labor costs combined with heightened turnover. In fact, as a percentage of total labor expenses, contract labor increased more than five times.

Other key callouts from the report include:

  • This March,hospitals spent $5,494 in labor expenses per adjusted discharge, compared to $4,009 in 2020.

  • The southern and western regions of the country experienced the largest increases, seeing a 43% and 42% jump. Every region of the country saw an increase.

  • In 2022, contract labor accounted for 11% of hospitals’ total labor compared to 2% in 2019

Although labor struggles in the healthcare industry did not begin with the pandemic, it did make it worse. Hospitals and healthcare systems are now challenged with attracting and retaining quality physicians and other healthcare staff while continuing to execute on their daily mission to provide top-tier patient care.

How can the industry combat these labor expenses? To start, organizations must leverage technology that saves them money throughout the hiring process. Platforms like Hyr save hospitals tens of thousands of dollars for every hire they make because of its flat monthly fee free from markups or conversion fees.

As hospital labor expenses continue to increase, take a step in the right direction with Hyr, a software-as-a-service platform that makes the entire hiring process fast, affordable and quality-focused. Book a demo today!


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