20 hospitals with the highest contract labor costs

Average contract labor costs among hospitals more than doubled between 2011 and 2020, and many hospitals and healthcare systems are now making a concerted effort to limit this category of spending.

The growing reliance of hospitals on contract labor during the COVID-19 pandemic has led to a sharp increase in spending from $2.23 million in 2011 to $4.59 million in 2020. In 2022, hospital spending on this category of staff ranged from a few thousand dollars a year to more than $210. million, according to Definitive Healthcare, a company that provides data, analytics and analysis for more than 8,000 hospitals.

After 11 consecutive months of negative operating margins on average, many hospitals and healthcare systems are trying to cut their contract labor costs. For example, the CFO of Community Health Systems, based in Franklin, Tennessee, has set a goal of cutting contract labor costs in half in 2023.

Below are the top 20 hospitals with the highest total contract labor costs as ranked by Definitive Healthcare based on an analysis of 8,300 U.S. hospitals and Medicare expense reports. The average total contract labor costs among these 20 organizations is $141 million.

West Coast hospitals dominate the list, with 11 out of 20 hospitals being part of Kaiser Permanente, located in Oakland, California. Hospitals under AdventHealth Integrated Systems in Altamonte Springs, Florida, BJC Healthcare in St. Louis, Tenet Healthcare in Dallas, Banner Health in Phoenix, Johns Hopkins Health System in Baltimore, NYC Health and Hospitals, Albuquerque- Mexico and OU Health in Oklahoma City.

The following figures reflect spending for 2021; data accessed in November 2022.

1. Fontana Medical Center (California)
$213.6 million

2. Oakland Medical Center (CA)
$177.8 million

3. Los Angeles Medical Center
$176.5 million

4. Kaiser Permanente Zion Medical Center (San Diego)
$174.5 million

5. Roseville Medical Center (California)
$172.7 million

6. Santa Clara Medical Center (California)
$153.4 million

7. AdventHealth Orlando (FL)
$146.1 million

8. South Sacramento Medical Center (CA)
$143.8 million

9. Sacramento Medical Center (California)
$134.6 million

10. Barnes Jewish Hospital (St. Louis)
$132.8 million

11. Orange County Medical Center-Anaheim (California)
$132 million

12. St. Vincent’s Hospital (Worster, Massachusetts)
$130 million

13. University of New Mexico Hospital (Albuquerque)
$128 million

14. Banner-University Medical Center Phoenix
$125.5 million

15. Banner-University Tucson Medical Center
$123.7 million

16. Downey Medical Center (California)
$119.6 million

17. Johns Hopkins Hospital (Baltimore)
$111.4 million

18. NYC Health and Hospitals-Bellevue (New York)
$109.8 million

19. Manteca Medical Center (California)
$107.8 million

20. University of Oklahoma Medical Center (Oklahoma City)
$106.7 million

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