$100M+ Savings in Contract Labor Expenses Projected for Major Health System

doctors and business people in a meeting

SimpliFi’s client, a statewide health system with a dozen hospitals and more than 1,500 beds, is projected to save more than $100 million in contract labor expenses in 2023 while building its core staff and reducing dependence on travelers.

The Challenge

According to data from the American Hospital Association, hospitals increased the percentage of their total nurse labor expenses spent on travel nurses from 4.7% in January 2019 to 38.6% in January 2022. 


SimpliFi’s client also felt an increase in travel nurse usage during the pandemic and wanted to gain better control over the complexity and costs associated with managing and reducing reliance on contract labor. 

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SimpliFi’s Solution

While many MSPs focus on reducing contract labor costs simply by lowering hospital bill rates, SimpliFi wanted to implement an innovative approach to help its client reduce its reliance on travelers long-term.


The need for travel nurses dramatically increased because of demands from the pandemic and the ongoing nursing shortage. In fact, the International Council of Nurses recently declared nurse shortages a global health emergency, suggesting there could be a need to replace up to 13 million nurses worldwide in the coming years. But, how do you break the cycle of filling RN staffing shortages with travelers?

Cycle of Losing Nurses and Needing to Hire More Travelers SimpliFi MSP Example

Confidence Accelerating Practice (CAP) Program

SimpliFi’s client needed to counteract the need for contract labor by adding more core staff nurses, so SimpliFi implemented its Confidence Accelerating Practice (CAP) program, which provides qualified preceptors to expand the capacity and quality of new grad onboarding. 


The first year CAP was introduced, the client hired 322 new grad RNs. That number grew 50% in its second year and is targeted to double in 2023 with the addition of 644 nurses. This growth in new nurses comes while achieving a 96% one-year retention rate. 


By onboarding almost 1500 new grads over these three years, SimpliFi is helping the client build its core staff and reduce its reliance on travelers. With this method, the client’s contract labor costs are sharply decreasing while the number of core staff members is strengthening. 

322 New Grad RNs

Hired in 2021-22

483 New Grad RNs

Hired in 2022-23

644 New Grad RNs

Hires Targeted for 2023-24

The Results

In the first quarter of 2023, SimpliFi helped the client save $26.1 million. With this continued trajectory, the client is projected to save nearly $112 million in contract labor expenses, a 42% reduction year-over-year.


Nearly 50% of these savings were realized due to a reduction in traveler count, largely thanks to a boost in core staff through the CAP program.

Graph showing Contingent labor spend Q1 2023 vs Q1 2022


Saved in Q1 2023


Projected Savings for 2023


Reduction YOY

Ready to Partner?

Reducing contract labor expenses is the No. 1 priority for healthcare executives in 2023. SimpliFi has multiple strategies to help you significantly decrease contract labor spending, so you can be the executive who brought your health system out of the red.


Contact us today to speak with a workforce consultant and get started.

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