Clinicians and the Workforce

In 2020 and 2021, as Covid-19 surges filled intensive care units, American hospitals ran short of the one input they could not buy on short notice: nurses. They turned to travel nurses on contracts of a few weeks, at bill rates that for some assignments reached several times normal staff pay (reported). The American Hospital Association reported that hospitals' contract-labour spending rose by more than 200% between 2019 and 2022. Surveys by the National Council of State Boards of Nursing reported that about 100,000 registered nurses left the workforce during 2020–22, and that many of those who stayed intended to leave or retire within a few years (reported). Staff nurses resigned to travel, which made permanent posts harder to fill and pushed up wages and sign-on bonuses for everyone. Staffing agencies such as AMN Healthcare and Cross Country Healthcare had record revenue in 2021–22. Hospitals had their worst margins in recent memory in 2022.

Kaiser Permanente, the largest integrated health system in the country, shows how long the bill took to arrive. It reported an operating loss of $1.27 billion for 2022. In October 2023 about 75,000 workers in the Coalition of Kaiser Permanente Unions struck for three days, widely reported as the largest healthcare strike in US history; the settlement gave raises of 21% over four years and a minimum wage rising to $25 an hour in California. More strikes followed: about 31,000 nurses and health professionals in the UNAC/UHCP union walked out from 26 January to 24 February 2026, and the contract they ratified in March carries increases Kaiser estimated at about 30% over its term, including steps (reported). Kaiser's premium is its only revenue line, so every point of wage growth must be passed to employers and the state or absorbed. Its operating margin was 0.3% in 2023 and 1.1% in 2025 (reported). Contract labour has come down since the peak, but the shortage that set its price has not gone away. This chapter treats the workforce as what it is for most healthcare businesses: the largest cost, the main determinant of quality and the binding constraint on growth.