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Hospitals plead for flexibility on spending amid soaring costs of temporary nurses

Massachusetts hospitals spent $1.5 billion on temporary labor in 2022, up 610 percent over 2019.

Massachusetts General Hospital, Boston. Massachusetts hospitals spent $1.5 billion on temporary labor in 2022, up 610 percent over 2019.David L. Ryan/Globe Staff

Hospitals in Massachusetts are asking the state for financial wiggle room as they contend with staffing challenges, including the $1.5 billion spent last year hiring temporary labor – mostly nurses – to fill in during the pandemic.

These “travelers,” who come from all over the country, command wages two or three times higher than staff nurses, and their pay increased as demand grew during the pandemic. In some cases, nurses quit staff jobs to take better-paying traveler positions at their own hospital or one nearby.

A survey by the Massachusetts Health and Hospital Association found that hospitals spent 610 percent more on temporary staff in 2022 than in the fiscal year that ended Sept. 30, 2019, when they spent $204 million.


The association cited these numbers last week when it asked the Health Policy Commission to reconsider its 2024 “health care cost growth benchmark” – an annual target for controlling health care expenditures in the state. The commission is an independent state agency that develops policies to reduce health care cost growth and improve the quality of patient care.

In January, the commission proposed a target of 3.6 percent as a benchmark for health care spending growth in 2024, the same goal set for 2023. A final decision will be made April 12.

Steve Walsh, the hospital association’s president and chief executive, said the MHA isn’t asking for a specific percentage but rather an overhaul of the benchmark process, which he said doesn’t take into account fluctuations like what hospitals have lately seen in labor costs.

“This benchmark relies on predictability,” he said, “and the input cost to hospitals surrounding labor seems to be anything but predictable.”

The 610 percent increase in temporary labor costs is “just alarming and completely unsustainable for the health care system,” Walsh said. And hospitals don’t know how temporary labor costs will change this year.


The benchmark “looks back 2 years to set a target for next year, all while not paying attention to what’s happening today,” he said.

Matthew Kitsos, spokesman for the Health Policy Commission, said the group will take into consideration all the testimony it received at a hearing last week. He noted that the commission “has been calling for critical action to update the benchmark and the accountability mechanisms associated with its oversight every year since 2019.”

Although the benchmark is not a hard cap on spending, it does have some teeth. If data prompt “significant concerns” about a provider or insurer’s spending, the state can require improvements. Since the benchmark process was established in 2012, this has happened only once: when Mass General Brigham pledged last year to reduce its annual spending by $127.8 million.

Stuart Altman, past chairman of the Health Policy Commission, said a critical question for the panel now will be how much of the $1.5 billion hospitals spent on temporary workers should be incorporated into any health care spending targets going forward.

“If you build [the traveling nurses costs] into the base, it becomes a way of adding substantial amounts of money forever,” said Altman, who is a professor of health policy at Brandeis University.

Altman also said some hospitals have substantial money in reserves that could help cover the high price tags for traveling nurses during the pandemic.

“Overall, hospitals have been doing OK because they have been getting this money from private insurance companies and then the federal government gave them money,” for care during the pandemic, Altman said.


But even with government relief, the majority of hospitals in Massachusetts reported losses last year, Walsh said.

Amid the exodus of health care workers during the height of the COVID-19 pandemic, the Baker administration created a new classification of traveling nurses with no salary caps and no requirements that they live at least 200 miles away.

That enticed local hospital staffers to quit their jobs – and return to the same job as contract workers making substantially more money, with more flexibility in hours, said Julie Pinkham, executive director of the Massachusetts Nurses Association.

“You can’t blame the nurses for doing it after that much time in the pandemic with no light at the end of the tunnel,” she said, adding that she warned the Baker administration about what would happen.

At the height of the pandemic, Pinkham said, upward of 30 percent of nurses at some Boston hospitals were fixed contract or traditional traveling nurses who journeyed to Massachusetts for the higher pay.

But as the pandemic eases, she said, demand for contract and traveling nurses has eased somewhat, though many are still being used. A growing number of hospitals have also raised pay by as much as 10 percent for registered nurses, which is helping to recruit and retain staff employees, Pinkham said.

For the last six months of last year, traveling nurse Sofia Arvizo worked shoulder to shoulder with staff nurses at Boston Children’s Hospital, doing the same work but taking home about $2,000 more each week.


“You get paid very well and it’s challenging, and it’s helped me grow more,” said the 26-year-old from El Paso, Texas, explaining why she decided to become a traveling nurse. “I get to see so many different things at each hospital, they each do things differently, so you have to learn how to acclimate well.”

Over the past year and a half, Arvizo has worked in New Orleans, Massachusetts, and California.

She said she didn’t encounter awkward moments from other nurses at Boston Children’s Hospital when they asked her about her pay; she describes their reaction more as frustration with the health care system.

“They didn’t hate the player, but hate the game,” she said.

Felice J. Freyer can be reached at Follow her @felicejfreyer. Kay Lazar can be reached at Follow her @GlobeKayLazar.