Contract labor isn't the crisis it was in 2022. That's exactly why now is a good time to look hard at how it's managed. Hospital contract labor expenses rose 258% from 2019 to 2022 [AHA]. Since then, contract labor expense per adjusted patient day has dropped 31% between 2023 and 2025 [Strata]. Keeping those savings takes a program built for it.
THE SHORT ANSWER
Compare managed service providers on five things, in this order: who owns them, how they get paid, who controls the rate card, how orders reach suppliers, and whether you own the data. Price matters, but an MSP's fee is only part of what you pay. Rate discipline and real competition among suppliers decide the rest. Ringo's vendor-neutral MSP owns no staffing agency, uses customizable rate cards, and shows vendor rates, markups and spending trends in real time.
Most MSP comparisons start with a fee spreadsheet and end there. This guide lays out what contract labor cost control actually depends on, a side-by-side scorecard you can use in an RFP, and the questions that separate a program that controls cost from one that just processes it.
Labor is still the biggest line on the hospital P&L. The American Hospital Association reports that total compensation and related expenses account for 56% of total hospital costs [AHA], and Kaufman Hall's National Hospital Flash Report showed labor expense per calendar day up 4% in April 2026 compared with April 2025 [Kaufman Hall].
CONTRACT LABOR, THEN AND NOW
The numbers behind the comparison
+258%
Hospital contract labor expense, 2019 to 2022 (AHA)
-31%
Contract labor expense per adjusted patient day, 2023 to 2025 (Strata)
$90.54
Aggregate travel nurse bill rate in 2025, vs. $90.13 in 2024 (SIA/NATHO)
56%
Share of total hospital costs that go to compensation and related expenses (AHA)
Two things stand out. Contract labor volume came down: SIA and NATHO found travel nurse revenue fell 12.1% and hours fell 12.5% in 2025. But the aggregate bill rate barely moved, from $90.13 to $90.54 an hour [SIA/NATHO]. Hospitals are buying fewer hours, but each one costs about the same as before. Rate control is where the next round of savings has to come from.
FEWER HOURS, SAME RATE
What changed in travel nursing in 2025
Travel nurse hours, change vs. 2024
Travel nurse revenue, change vs. 2024
Aggregate bill rate, change vs. 2024 ($90.13 to $90.54)
Source: SIA/NATHO Travel Nurse Benchmarking Survey 2026.
The prize is still large. NSI Nursing Solutions estimates that for every 20 travel RNs eliminated, the average hospital can save $1,321,632 [NSI Nursing Solutions]. And Providence reported agency spend 70% below its 2022 peak by the end of 2024 [Becker's Hospital Review].
An MSP doesn't set the market for clinicians. It does control the levers that decide how much of that market you pay for:
Every comparison question below maps to one of these levers.
Before you compare fees, find out who owns the MSP. Some of the largest MSPs are run by staffing companies. AMN Healthcare's 2025 annual report says that "through our MSPs, we place our own healthcare professionals and utilize other staffing agencies," and that roughly 48% of its consolidated revenue flowed through MSP relationships [AMN Healthcare 10-K].
That model can deliver fill. The cost-control question is whether the party managing your rate card also profits from the rates. When the MSP's own agency is competing for your orders, ask how rate exceptions get approved and how fees show up on the invoice. With a vendor-neutral MSP, the program manager owns no agency, so it has no stake in which supplier wins.
Use this in your RFP or finalist interviews. Ask every MSP the same questions and score the answers side by side.
| Criterion | Ask | Red flag |
|---|---|---|
| Ownership | Do you or your parent company own a staffing agency? | Yes, and its clinicians see orders first |
| Fee structure | Is the fee supplier-funded, client-funded or blended, and is it shown on the invoice? | The fee is built into bill rates where you can't see it |
| Rate card control | Who sets and approves rates and exceptions? | Rate changes happen without your sign-off |
| Supplier access | How are orders distributed, and can we add our own suppliers? | A short, fixed list chosen by the MSP |
| Spend visibility | Can we see bill rates, markups and fees by supplier, unit and specialty in real time? | Monthly PDF reports only |
| Invoice audit | How are timesheets matched to approved shifts and contracted rates? | Your AP team does the matching |
| Internal labor | Can the program route shifts to our float pool before going external? | External only |
| Data and exit | Who owns program data, and what happens to it if we leave? | Data stays with the MSP |
FROM BASELINE TO DECISION
Four stages of a fair MSP comparison
STAGE 1
Baseline
Twelve months of spend by supplier, unit, specialty and rate.
STAGE 2
Same questions
Every MSP answers the scorecard above, in writing.
STAGE 3
Model total cost
Fees plus projected bill rates on your actual mix of orders.
STAGE 4
See it live
Watch one order go from requisition to invoice in each finalist's platform.
Pull twelve months of contract labor spend by supplier, unit, specialty and rate. You can't judge a savings claim without knowing your starting point, and most baselines turn up spend nobody was tracking.
Send the scorecard as part of the RFP and require written answers. Vague answers on ownership, fees or data are answers too.
The MSP fee is visible. The rates it negotiates, the exceptions it approves and the suppliers it brings in are where most of the money is. Ask each finalist to price your actual order mix, and compare the totals.
Ask each finalist to show one order moving from requisition to approval to supplier distribution to timesheet to invoice. If the demo skips a step, that step is probably manual.
Client references tell you about service. Supplier references tell you whether orders are distributed fairly. Ask the MSP for both.
Spell out that program data is yours, that you can export it at any time, and what the MSP must hand over if you leave.
Ringo's MSP was built around the questions above. Ringo is free from staffing firm ownership, so it has no agency to favor. Clients get flexible, customizable rate cards, and the program centralizes requisition approvals, credentialing, onboarding and invoicing on Ringo's own VMS.
On cost visibility, Ringo's vendor-neutral model gives real-time visibility into vendor rates, markups and spending trends, and its reporting tools track staffing, cost and performance data on demand. Consolidated billing turns dozens of supplier invoices into one invoice and one payment, with 98% invoice accuracy and proactive auditing that catches issues before they escalate. Ringo reports savings of up to 13% per vendor through its billing process. For internal labor, Ringo's Flexible Workforce solution brings the internal resource pool, external resource pool and float pool into the same system.
Want a rough number for your own program? Try Ringo's savings calculator. For more on the cost side, see managing healthcare labor spend without cutting care and how to consolidate staffing vendors without losing competition.
Hospitals have already cut contract labor volume. The next savings come from paying the right rate for every hour that's left, and that depends on how your MSP is built, not just what it charges.
Compare ownership first, then fee structure, rate control, supplier access and data rights. Model total cost on your real order mix. And watch an order run from start to finish before you sign. The MSP that holds up under those questions is the one that will hold down your costs.
Ringo is the leading vendor-neutral workforce management platform purpose-built for healthcare, bringing VMS, MSP, and flexible workforce programs together on one platform with no agency affiliations. Ringo earned a 94.2 overall satisfaction score in the KLAS 2025 First Look Report, with 100% of respondents saying they would buy again.
Compare MSPs on ownership, fee structure, rate card control, supplier access, spend visibility, invoice audit, internal labor routing, and data rights. Ask every MSP the same questions in writing, model total cost on your real order mix, and watch one order run end to end in each finalist's platform.
An agency-owned MSP is run by a staffing company that may place its own clinicians alongside other agencies. A vendor-neutral MSP owns no staffing agency and distributes orders to all approved suppliers under the same rules, so it has no stake in which supplier fills an order.
MSP fees can be supplier-funded (deducted from what suppliers are paid), client-funded (paid by the hospital), or a mix. Ask each MSP to show its fee separately on invoices so you can see what you're paying for program management versus labor.
The American Hospital Association reports that compensation and related expenses account for 56% of total hospital costs. Staffing Industry Analysts puts workforce costs at roughly 60% of hospital expenses in 2025.
WHAT COST CONTROL LOOKS LIKE
The CFO asks why ICU contract spend jumped last quarter. You have an answer by lunch.
In a lot of programs, that question kicks off a week of pulling invoices, matching them to timesheets and calling suppliers about rate exceptions. By the time the answer arrives, next quarter's spend is already committed.
With Ringo, rates, markups, exceptions and invoices sit in one system. You can see spend by location, department and vendor, along with every supplier's rates and markups. Because Ringo owns no staffing agency, every supplier competes fairly.
Finance gets answers, not spreadsheets. That's why Ringo earned a 94.2 overall satisfaction score in the KLAS 2025 First Look Report, and 100% of respondents said they'd buy again.
See how your contract labor program would look with every rate, markup and invoice in one place.