The U.S. healthcare industry is facing a staffing crisis of epic proportions, fueled by an aging population, increased demand for care, and an exodus of healthcare professionals. According to the Association of American Medical Colleges (AAMC), the U.S. could face a shortage of up to 124,000 physicians by 2034. Registered nurses aren't immune either, with the American Nurses Association projecting more than 1 million RNs will retire by 2030. To address these immediate shortages, many healthcare organizations are turning to contract labor. But is this "quick fix" truly a sustainable solution?

The Financial Toll: Beyond Bill Rates

Contract labor comes with a hefty price tag. A 2023 American Hospital Association study found that hospitals spend an average of $118,000 per contract nurse annually, 35% more than a permanent nurse. A Staffing Industry Analysts survey revealed that travel nurses cost hospitals an average of 177% more than their permanent counterparts. Vivian Health, a healthcare hiring marketplace, reports that during the COVID-19 pandemic, some hospitals were paying upwards of $8,000 per week for contract nurses. These escalating costs are financially unsustainable for many organizations, particularly in the long run.

The Domino Effect on Your Workforce

The true cost of contract labor extends far beyond finances. High turnover rates and the constant influx of new faces create a ripple effect that disrupts teamwork, impacts productivity, and diminishes morale among your permanent staff.

• Morale and Engagement: A 2022 Gallup poll found that only 32% of healthcare workers reported feeling engaged in their work, a figure that has been steadily declining in recent years. Increased reliance on contract labor can further exacerbate this issue.
• Productivity: A study published in the Journal of Nursing Administration found that high turnover rates negatively impact patient outcomes, increase medication errors, and hinder staff productivity. A 10% increase in nurse turnover was associated with a 4% increase in patient mortality.
• Burnout Risk: A study in the Journal of Advanced Nursing linked high turnover rates to increased burnout among remaining staff. A 2021 survey by Mental Health America found that 86% of healthcare workers reported experiencing burnout.

Compromised Patient Care

The constant rotation of contract staff can create instability in patient care. Temporary workers may not be fully integrated into the hospital's culture, processes, or electronic health record systems.

• Medical Errors: A 2020 study published in BMJ Quality & Safety estimated that medical errors are the third leading cause of death in the United States. While contract labor isn't solely responsible for this issue, it can contribute to communication breakdowns and a lack of familiarity with protocols, potentially increasing the risk of errors.
• Patient Satisfaction: Research published in Health Affairs shows a strong correlation between nurse staffing levels and patient satisfaction scores. Relying heavily on contract labor can disrupt continuity of care, hindering the development of trusting relationships between patients and caregivers, and ultimately impacting patient satisfaction.

DirectShifts: A Data-Driven, Sustainable Solution

The DirectShifts Internal Resource Pool model offers a strategic alternative to the contract labor trap. Our platform leverages data and technology to:

• Empower Your Internal Team: We help you attract, retain, and optimize your existing workforce, eliminating costly agency fees.
• Streamline Scheduling: Our 24/7 on-demand scheduler ensures you have the right staff at the right time, minimizing gaps in coverage.
• Ensure Compliance: Our credentialing wallet simplifies compliance management, ensuring all staff meet requirements.
• Reduce Turnover: Investing in your internal team creates a stable, supportive environment that reduces turnover and improves employee satisfaction.

Invest in Your Future

Don't let contract labor drain your resources and undermine the quality of care you provide. Choose DirectShifts and experience a data-driven, technology-powered solution that puts you back in control. Contact us today for a personalized consultation.