UMass Memorial Spending up to $20M a Month on Contract Labor, CFO Says

Massachusetts hospitals paid a staggering $1.52 billion last year to hire temporary hospital workers, mostly “travel nurses,” amid a labor shortage that contributed to record financial losses for many institutions.

The exponential growth of labor costs is included in a new report issued by the Massachusetts Health and Hospital Association on Monday. The report shows in fiscal year 2019, prior to the pandemic, hospitals spent $204 million on temporary staff. That number skyrocketed in FY2022 to $1.52 billion — a 610% increase, GBH reports.

“It is staggering,” said Daniel McHale, vice president of healthcare finance at MHA. “And … it’s not unique to Massachusetts.”

McHale, who helped prepare the report, cited a Massachusetts Center for Health Information and Analysis report that found four in five hospitals lost money during the last fiscal year.

“The net result is financial losses for hospitals,” he said. “So, we’ve had the worst kind of financial performance in many years, even during the pandemic years.”

At UMass Memorial Health in Worcester, CFO, vice president and treasurer Sergio Melgar said his health care system went into FY 2022 with 600 open jobs, and filling those vacancies with temporary workers was expensive. In some cases, he said, traveling workers were paid triple times the cost of pre-COVID rates, which cost the facility up to $20 million a month. Read more.

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