At the height of the pandemic, travel nurses were earning as much as $10,000 a week. But now, travel nursing expenses for hospitals have dropped significantly—a trend that could help hospitals with their bottom lines, David Wainer writes for Wall Street Journal.

Slide deck: The state of the nursing workforce

Travel nursing expenses are down

Widespread staff shortages throughout the pandemic forced many hospitals to rely heavily on travel nurses, leading to increasingly high labor expenses. Some travel nurses earned as much as $10,000 a week.

According to Parth Bhakta, CEO of Vivian Health, an online health care labor marketplace, the travel nursing industry doubled in size over the last year. And in 2021, travel nursing revenue tripled to an estimated $11.8 billion, up from $3.9 billion in 2015, according to Staffing Industry Analysts.

However, the travel nursing market might finally be cooling down as hospitals reduce their expenses for contract workers.

HCA Healthcare CEO Sam Hazan recently told analysts that the health system's expenses for temporary staff were 22% lower in June than they were in April. In addition, HCA's CFO Bill Rutherford said that "over the course of the year, we'll continue to see hopefully a reduction in the utilization of that contract labor."

With labor expenses, particularly from travel nurses, declining, HCA released higher-than-expected profits for its second quarter, reaffirming its full-year outlook for investors. Tenet Healthcare similarly released positive profit results, leading its stock to increase 6%.

According to Brian Tanquilut, an analyst at Jefferies, weekly pay for travel nurses is likely to continue dropping about 15% more to the low $3,000s a week, which will help hospitals improve their overall bottom line.

The long-term travel nursing trend is likely here to stay

Although travel nursing expenses are much lower now than they were at the pandemic's peak, health care experts say that the travel nursing industry is likely here to stay, particularly as the broader nursing shortage continues to persist.

According to John Martins, CEO of Cross Country Healthcare, which provides temporary medical staff, many nurses continue to be drawn to travel jobs because of their flexibility and higher wages. In addition, he noted that the growing work-from-home culture allows nurses to travel with their spouses who work remotely more easily.

Overall, Martins said he estimates the travel nurse market to grow from 40,000 in 2018 to 80,000 by 2023. (Wainer, Wall Street Journal, 7/27)