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Study Looks at Nurse Perception

June 17 2011

A new study on nurse pay may help end the perception that use of temporary nurses isn’t cost effective, Ralph Henderson, president of the nurse and allied division of AMN Healthcare Services Inc. (NYSE: AHS), said in an interview Thursday.

The study found base wages for nurses represent only 57 percent of total costs for a full-time nurse hired by a hospital. Other costs include payroll costs, insurance costs, recruiting costs, nonproductivity costs (such as training and personal Internet use) and other. At the average base wage of $26 per hour, a nurse would actually cost $45 an hour.

“It’s a good start on getting hospitals to understand better so they can control better their total cost of labor,” Henderson said.

Information in the study can help give hospitals and others a picture of the total cost of a full-time nurse, for better comparison with the cost of a temporary nurse.

“It should be pretty eye-opening to healthcare systems where there’s still some fundamental belief that use of contingent labor isn’t cost effective,” Henderson said.

Separate from the study, Henderson said he knows of one case where an institution’s base wage was $58 an hour, but its bill rate was in the low $60s.

The study was based on a survey of 120 senior executives at hospitals in the United States and was conducted by KPMG.

The study also found that 41 percent of healthcare executives used travel nurses because of a local nurse shortage.

For the initial Staffing Industry Daily News report on the study, click here.

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