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.
| Rank | Definitive ID | Hospital name | Location | Total contract labor expense | Explore dataset |
|---|---|---|---|---|---|
| 1 | 185 | Banner Estrella Medical Center | Phoenix, AZ | $363,030,311 | Explore |
| 2 | 526 | Fontana Medical Center | Fontana, CA | $259,751,283 | Explore |
| 3 | 873 | AdventHealth Orlando | Orlando, FL | $251,577,167 | Explore |
| 4 | 588 | Stanford Hospital | Stanford, CA | $215,630,428 | Explore |
| 5 | 3329 | OU Health - University of Oklahoma Medical Center | Oklahoma City, OK | $202,304,791 | Explore |
| 6 | 2706 | University of New Mexico Hospita | Albuquerque, NM | $200,010,838 | Explore |
| 7 | 535 | Kaiser Permanente Zion Medical Center | San Diego, CA | $195,460,140 | Explore |
| 8 | 366 | Los Angeles Medical Center | Los Angeles, CA | $194,053,916 | Explore |
| 9 | 303 | Oakland Medical Center | Oakland, CA | $187,568,741 | Explore |
| 10 | 2442 | Barnes-Jewish Hospital | Saint Louis, MO | $185,522,801 | Explore |
| 11 | 553293 | Roseville Medical Center | Roseville, CA | $183,231,076 | Explore |
| 12 | 1914 | The Johns Hopkins Hospital | Baltimore, MD | $182,135,951 | Explore |
| 13 | 593 | Santa Clara Medical Center | Santa Clara, CA | $176,204,375 | Explore |
| 14 | 4374 | UW Medical Center - Montlake | Seattle, WA | $163,655,504 | Explore |
| 15 | 482 | Orange County - Anaheim Medical Center | Anaheim, CA | $161,149,279 | Explore |
| 16 | 1981 | UMass Memorial Medical Center - University Campus | Worcester, MA | $158,258,231 | Explore |
| 17 | 2444 | SSM Health Saint Louis University Hospital | Saint Louis, MO | $149,273,787 | Explore |
| 18 | 513 | South Sacramento Medical Center | Sacramento, CA | $148,939,241 | Explore |
| 19 | 4310 | University Hospital | Charlottesville, VA | $148,680,192 | Explore |
| 20 | 274110 | UK Albert B Chandler Hospital | Lexington, KY | $146,391,777 | Explore |
Fig. 1 Data is from the Definitive Healthcare HospitalView product and sourced from hospital Medicare Cost Report. Accessed October 2023.
Which hospitals have the highest contract labor expenses?
Banner Estrella Medical Center in Phoenix, Arizona, has the highest contract labor expenses at a reported $363 million. Fontana Medical Center in Fontana, California, spent nearly $260 million on contract labor.
The average contract labor expenses for the hospitals on the list is $193.6 million. For all U.S. hospitals, the average is $7.6 million.
Nine of the hospitals on the list are in California. Hospitals in the western U.S. have the highest average contract labor expenses at more than $13.6 million. In addition, California has a high cost of living and also some of the hospitals with the highest salary expenses are located in the state. Eight of the hospitals are part of the integrated delivery network (IDN), Kaiser Permanente, one of the largest healthcare systems in the U.S.
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