During tough economic times, prioritizing cost-saving measures is of utmost importance for organizations from all sectors, and the healthcare industry is no exception.  It comes to no surprise to many, but labor costs represent the largest expense in the healthcare sector. A 2023 study found that employee wages and benefits rose by almost 40% between 2019 and 2022, and this upward trend is expected to continue in the coming years.

Saving money on labor costs can be challenging for healthcare organizations, but it’s not an impossible feat to accomplish. A great way that hospitals and healthcare facilities can save money, keep top talent, and prioritize the health and well-being of staff members is to adopt flexible staffing strategies. In this article, we discuss how flexible staffing strategies can help reduce nurse burnout and save hospitals money.

Why Nurse Burnout Is Costing Your Hospital More Than You Think

Before diving deep into the cost savings associated with flexible staffing, let’s first tackle why nurse burnout is a major expense for healthcare organizations.

Nurse burnout occurs when nurses feel chronically stressed and anxious due to work-related factors, including heavy workloads, staffing challenges, safety issues, emotional exhaustion, and long work hours. When typical burnout symptoms appear, such as feeling detached, unmotivated, withdrawn, experiencing sleeping difficulties, and procrastinating at work, the likelihood of nurses leaving their jobs grows exponentially.

According to the American Nurses Association (ANA), burnout is one of the biggest reasons why nurses opt to leave the profession. Based on a 2024 study involving more than 7,800 nurses who had recently ended their healthcare employment, 26% of the nurses left their jobs due to burnout or emotional exhaustion. Meanwhile, 21% of nurses quit because of insufficient staffing.

Staffing shortages are directly linked to nurse burnout. Aside from nurses developing chronic work-related stress, when there aren’t enough nurses on the floor, the health and safety of both patients and healthcare professionals are compromised. Poor staffing can lead to medical errors, longer hospital stays, and avoidable deaths, which gravely impact the health and well-being of thousands of individuals, but also cost healthcare facilities millions of dollars each year. A 2021 study found that when nurses have one additional patient added to their workload, the likelihood of patients staying one day longer in the hospital increased by 5%. When hospitals reduce patients’ length of stay, the study found that these hospitals can save more than $117 million in Medicare patients alone.

Actionable Framework: Measuring Flexible Staffing Impact on Costs and Burnout

In this section, we’ll provide a step-by-step guide on measuring flexible staffing’s impact on hospital costs when it’s used to combat nurse burnout and improve patient safety.

Flexible staffing, which involves the adoption of workforce strategies that address healthcare facilities’ fluctuating staffing needs, such as per diem, contract, and internal float pool roles, can effectively reduce nurse burnout and adverse patient outcomes. It is a proven safe staffing practice that can help healthcare facilities retain top talent, sustain their operations, and save costs.

According to research conducted by Penn Nursing’s Center for Health Outcomes and Policy Research, when hospitals implement hospital-wide safe staffing tactics, nurses reduced high burnout rates by 24% and job dissatisfaction by 27%. The same report also shared that safe staffing ratios in healthcare settings resulted in AUD$70 million in cost offsets in Queensland, Australia alone, due to fewer deaths and patients staying in hospitals for shorter periods.

When facilities are appropriately staffed, patients experience fewer hospital-acquired infections and illnesses, which can cost hospitals millions annually. For example, when patients develop pressure ulcers due to prolonged pressure and immobility, hospitals lose about $8.5 billion every year.

In the long run, hospitals benefit financially from flexible staffing by maintaining optimal nurse-to-patient ratios and preventing costly adverse events, such as medical errors and extended patient stays.

Agency nurses from trusted healthcare staffing agencies such as Meda Health Staffing help fill critical gaps, ensuring that patient care standards are upheld. Additional skilled healthcare staff can also effectively reduce the likelihood of unnecessary and costly patient health complications, such as hospital-acquired infections or readmissions. Additionally, healthcare facilities that promote a healthier, less-stressed workforce will experience improved staff retention rates, avoiding the high costs associated with frequent turnover and lost productivity.

Discover how Meda Health’s quality staffing solutions can address your healthcare facility’s unique staffing needs here.