Healthcare Insights
Hospitals with the highest contract labor expenses
U.S. hospitals are increasingly working with contracted labor to keep their facilities staffed to provide quality patient care. While provider burnout rises and facilities face staffing shortages, the healthcare staffing market is also projected to grow 5.6% from 2022 to 2030.
What is contract labor?
Contract labor refers to the hiring of independent contractors. Usually, the hiring organization and the independent contractor must complete a labor agreement contract prior to the start of work.
Employee vs. independent contractor
Independent contractors provide their services on a temporary basis and are not hired as full-time employees. Independent contractors within the healthcare industry can help fill in gaps in staffing, thus supporting healthcare organizations’ ability to care for their patient population.
How many hospitals use contract labor?
The Definitive Healthcare HospitalView product tracks contract labor expenses for more than 3,200 U.S. hospitals. Data is sourced from the Medicare Cost Report, and results in the following analysis are aggregated from the most recent 12-month interval tracked in our database.
How much do hospitals spend on contract labor each year?
The average hospital contract labor expense in the U.S. is $7.6 million based on our analysis of HospitalView data and makes up about 3.5% of a hospital’s total expenses.
The following table lists the top hospitals with the highest contract labor expenses.
| Hospital name | HQ city | HQ state | Total contract labor expense | Explore dataset |
|---|---|---|---|---|
| Fontana Medical Center | Fontana | CA | $206,034,400 | Explore |
| Oakland Medical Center | Oakland | CA | $187,829,312 | Explore |
| UK Albert B Chandler Hospital | Lexington | KY | $185,964,352 | Explore |
| Roseville Medical Center | Roseville | CA | $185,658,576 | Explore |
| Kaiser Sunnyside Medical Center | Clackamas | OR | $181,753,488 | Explore |
| Los Angeles Medical Center | Los Angeles | CA | $180,528,800 | Explore |
| Santa Clara Medical Center | Santa Clara | CA | $175,488,304 | Explore |
| South Sacramento Medical Center | Sacramento | CA | $174,756,400 | Explore |
| Upstate University Hospital | Syracuse | NY | $174,312,208 | Explore |
| Kaiser Permanente Zion Medical Center | San Diego | CA | $170,218,336 | Explore |
| IU Health Methodist Hospital | Indianapolis | IN | $156,636,240 | Explore |
| Barnes-Jewish Hospital | Saint Louis | MO | $154,664,400 | Explore |
| Orange County - Anaheim Medical Center | Anaheim | CA | $149,660,256 | Explore |
| UPMC Presbyterian | Pittsburgh | PA | $146,665,920 | Explore |
| Sacramento Medical Center | Sacramento | CA | $143,157,232 | Explore |
| University of New Mexico Hospital | Albuquerque | NM | $140,024,400 | Explore |
| The Johns Hopkins Hospital | Baltimore | MD | $126,815,840 | Explore |
| Downey Medical Center | Downey | CA | $121,271,784 | Explore |
| Los Angeles General Medical Center | Los Angeles | CA | $117,877,352 | Explore |
| University Hospital | Jackson | MS | $117,068,352 | Explore |
Fig. 1 Data is from the Definitive Healthcare HospitalView product and sourced from hospital Medicare Cost Report. Accessed October 2025.
Which hospitals have the highest contract labor expenses?
California hospitals dominates our list, accounting for half of the top 20 hospitals and the largest overall contract labor expenses. Ten of the top 20 hospitals are located in the state, and Kaiser Permanente facilities are particularly prominent, representing nearly all of the California entries. Hospitals such as Fontana Medical Center, Oakland Medical Center, and
Kaiser Sunnyside demonstrate that the reliance on contract labor is not limited to a single region but is a systemic feature of large integrated health systems. The high costs in California reflect both the state’s tight labor market and high cost of living, as well as regulatory requirements that necessitate safe staffing ratios, which hospitals often meet through temporary staffing solutions.
Beyond California, other large academic and teaching hospitals also exhibit substantial contract labor expenditures. Institutions such as the University of Kentucky’s Albert B. Chandler Hospital, Upstate University Hospital in Syracuse, and IU Health Methodist Hospital in Indianapolis each report costs exceeding $150 million. This suggests that even hospitals in lower-cost regions face staffing challenges, often turning to temporary labor to maintain operations and meet patient care standards.
Overall, the geographic spread and magnitude of these expenses reveal a nationwide dependence on temporary staffing, with particularly high concentrations in integrated systems and academic centers. The data highlight the financial and operational pressures hospitals face, signaling that addressing workforce stability will be crucial for long-term sustainability and cost management.
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