Issue link: https://beckershealthcare.uberflip.com/i/1492995
10 CFO / FINANCE 20 hospitals with highest contract labor expenses By Molly Gamble T he average contract labor spend among hospitals more than doubled between 2011 and 2020, with many hospitals and health systems now making concerted efforts to curb this expense category. Hospitals' increased reliance on contract labor throughout the COVID-19 pandemic drove a crescendo in spending from $2.23 million in 2011 to $4.59 million in 2020. In 2022, hospital spending on this workforce category spanned from a few thousand dollars per year to more than $210 million, according to Definitive Healthcare, a company that provides data, analytics and analyses on more than 8,000 hospitals. Aer 11 consecutive months of negative operating margins on average, many hospitals and health systems are trying to lower their contract labor expenses. e CFO of Franklin, Tenn.-based Community Health Systems, for example, has a goal to halve contract labor spending in 2023. Below are 20 hospitals with the highest total contract labor expenses as ranked by Definitive Healthcare based on an analysis of 8,300 U.S. hospitals and Medicare cost reports. e average total contract labor expense among these 20 organizations is $141 million. West Coast hospitals dominate the list, with 11 of the 20 hospitals being part of Oakland, Calif.-based Kaiser Permanente. Hospitals within the integrated systems of Altamonte Springs, Fla.-based AdventHealth, St.Louis- based BJC Healthcare, Dallas-based Tenet Healthcare, Phoenix-based Banner Health, Baltimore-based Johns Hopkins Health System, NYC Health and Hospitals, Albuquerque-based University of New Mexico Hospitals and Oklahoma City-based OU Health are also represented. e following figures reflect 2021 spending; data was accessed in November 2022. 1. Fontana (Calif.) Medical Center $213.6 million 2. Oakland (Calif.) Medical Center $177.8 million 3. Los Angeles Medical Center $176.5 million 4. Kaiser Permanente Zion Medical Center (San Diego) $174.5 million 5. Roseville (Calif.) Medical Center $172.7 million 6. Santa Clara (Calif.) Medical Center $153.4 million 7. AdventHealth Orlando (Fla.) $146.1 million 8. South Sacramento (Calif.) Medical Center $143.8 million 9. Sacramento (Calif.) Medical Center $134.6 million 10. Barnes-Jewish Hospital (St. Louis) $132.8 million 11. Orange County-Anaheim (Calif.) Medical Center $132 million 12. Saint Vincent Hospital (Worcester, Mass.) $130 million 13. University of New Mexico Hospital (Albuquerque) $128 million 14. Banner-University Medical Center Phoenix $125.5 million 15. Banner-University Medical Center Tucson $123.7 million 16. Downey (Calif.) Medical Center $119.6 million 17. e Johns Hopkins Hospital (Baltimore) $111.4 million 18. NYC Health and Hospitals-Bellevue (New York City) $109.8 million 19. Manteca (Calif.) Medical Center $107.8 million 20. University of Oklahoma Medical Center (Oklahoma City) $106.7 million n South Carolina hospital denied Medicare payment By Alan Condon A district court on Jan. 18 affirmed HHS' decision to deny Lancaster (S.C.) Hospital Corp. Medicare reimbursement for 1997 because it failed to submit information supporting the payment request, according to Bloomberg. Four things to know: 1. Lancaster, formerly Springs Memorial Hospital, operates an inpatient rehabilitation facility that provides services for Medicare beneficiaries. 2. As a participant in the Medicare program, Lancaster was responsible for familiarizing itself with the legal requirements for reimbursement, including the need to provide data to verify that its payment request reflected costs incurred from treating Medicare patients, according to the court opinion posted on Justia. 3. The hospital group argued that — even if some reductions were warranted — HHS should not have denied its entire reimbursement request for the fiscal year. 4. While it may seem harsh to deny Lancaster reimbursement for the entire year, the principle that people "must turn square corners when they deal with the government" "has its greatest force when a private party seeks to spend the government's money," the court stated. n