$3.9 billion overspend in US healthcare

Jul 21 2005

A study released today by American Hospital Directory suggests that as much as half of the $7.8 billion spent by American hospitals on contract labor could be saved through better management.

The finding is one of several startling conclusions prompted by the report, Trends in the Use of Contract Labor among Hospitals.

With ballooning costs pushing America's healthcare system toward full-blown crisis, rigorous financial analysis of our healthcare delivery system is more important than ever. Since personnel expense typically consumes more than half of a hospital's operating revenue, and contract labor is significantly more costly than salaried staff, the use of contract labor in our hospitals represents a key metric in assessing the big picture of American healthcare.

"Staffing an American hospital with skilled and experienced workers is more difficult than ever," says Paul Shoemaker, CEO of American Hospital Directory. "We put together this study to help hospital management and the public get a better understanding of the dynamics of this problem, along with some possible solutions."

In addition to analysis of current and historical data, Trends in the Use of Contract Labor among Hospitals contains a case study of an integrated healthcare company that has faced its staffing problems head on and achieved positive results through the innovative solution it created.

American Hospital Directory published its first contract labor study in August 2004 using data through 2002. The study released today is the second in this series of reports, and incorporates data through 2003 and preliminary data for 2004.

The full report, Trends in the Use of Contract Labor among Hospitals, may be downloaded (free) from http://www.ahd.com/