A recent study done by KPMG looked at hospital labor costs. More specifically it looked at the overall cost of full-time nurses and the surveyed hospitals use of per diem or traveling nurses.
Here is a summary of their findings:
- All-in cost of full-time hospital nurses is an average $98 thousand per year (or $45 per hour). This assumes 100 percent productivity.
- Base wages on average represent 75 percent of fully loaded payroll and 57 percent of all-in cost. The remaining balance is made up of things like payroll tax, shift differential costs, overtime pay, holiday pay and paid time off, bonuses, pension contributions, and other costs.
- Besides base wages, other elements of the all-in cost include payroll tax, shift differential, and insurance, as well as costs such as holiday/paid time off, overtime, and training.
- There seem to be important additional “hidden” costs with nursing labor that are related to full-time nurses, but are difficult to quantify.
- About 66% of survey respondents use of traveling or per diem nurses currently with the main reasons being the quality of the travel nurses available and supply and demand.
- A 90:10 ratio of full-time employed nurses to traveling or other temporary nurses was seen as the ideal ratio on average.
Their findings further prove the value of the Staffing Cost Calculator that we developed here at Medical Solutions over two years ago. Our tool is an interactive way to directly compare the costs of a full-time nurse versus a traveler and also takes into consideration factors like nurse to patient ratios and the costs of nurse burnout.
You can download the Staffing Cost Calculator here. If you have questions contact your Medical Solutions Client Manager at 1-866-633-3548.