Health Care Workforce Shortages Creating Increased Reliance on Contract Labor at Unsustainable Costs


Concord, NH - A shortage of health care workers made worse by the pandemic, and increased reliance on contract labor, is driving expenses up and operating margins down for hospitals and health systems across the state of New Hampshire.


According to a report just released by the New Hampshire Hospital Association, a shortage of health care workers was already a challenge, however it has only been exacerbated by the COVID-19 pandemic for hospitals across the state, significantly straining the current workforce. Combined with a decrease in health care workers, unsustainable labor costs, record low levels of unemployment in the state, and increased demand for hospital services due to COVID-19, the Association says its hospitals are facing the perfect storm in its report.


Personnel shortages exist across the spectrum, from nurses and licensed nursing assistants (LNAs) to medical technicians and respiratory therapists and has required hospitals statewide to bring in temporary contracted staff or ‘travelers’ at soaring labor costs to care for the growing number of patients hospitals are seeing. According to the report:


  • Prior to the pandemic in October of 2019, hospitals in New Hampshire were showing a 9% vacancy rate for all nurses, but that number has skyrocketed to 18% earlier this year.
  • Projected for 2022, New Hampshire hospitals have secured 819 full-time equivalent (FTE) staff in contract labor compared to only 324 FTEs in 2019.
  • As a result, New Hampshire hospitals are projected to spend $302.7 million in contract labor in 2022 as opposed to only $118.5 million in 2019 pre-pandemic.
  • Statewide, New Hampshire hospitals experienced a 133.1% increase in contract labor costs from 2021 to 2022.


“The workforce vacancy rates that New Hampshire hospitals are experiencing have required them to seek temporary, contract labor to care for their patients, spending millions of dollars in order to staff their patient care units,” stated Steve Ahnen, president of the New Hampshire Hospital Association. “Those costs are unsustainable and threaten the financial viability of our hospitals and will continue to do so without additional resources and support.”


New Hampshire hospitals expect to spend over $300 million in 2022 on contract labor to ensure that they have the staff to provide essential care to their patients.  To address the significant workforce shortages and unsustainable financial challenges facing New Hampshire hospitals, the Association is calling on stakeholders to collaborate and support workforce development initiatives that ensure resiliency in the current workforce, support a healthy and sustainable path for recruitment of new health care workers, and calls for additional state and federal resources to support hospitals as they care for the patients and communities who depend on them now more than ever before.


Download the 2022 Labor Cost Study Report.


Download the 2022 Labor Cost Infographic


NHHA Labor Cost Study Infographic FINAL Page 1