Estimating the cost of labor substitution

What does it cost to reduce residents’ hours so that they are better rested and make fewer errors? In a study published in The Journal of Bone & Joint Surgery, Dr. Adam Powell investigated the financial impact of reducing the hours of orthopedic residents to eighty hours per week. Hospitals across the nation were forced to trim the hours of their residents to comply with a regulation from the Accreditation Council for Graduate Medical Education (ACGME). As a result of this change in work hours, the researchers were able to measure the number and type of staff that hospitals hired in response. Reducing one orthopedic resident’s workload by an hour was found to cost approximately $2,700. This money was spent on hiring nurse practitioners, physician assistants, and registered nurses. Although the study’s findings are specific to one particular workload reduction, the methodology used by the study can be applied to other changes in labor policies in which a substitution of labor is required. Given that studies have found measurable patient health benefits from resident workload reductions, it is possible that hospitals will continue to reduce their staff’s load by hiring physician extenders.

For more information on this study, see Atul F. Kamath, Keith Baldwin, Lauren K. Meade, Adam C. Powell, and Samir Mehta. 2011. “The Increased Financial Burden of Further Proposed Orthopaedic Resident Work Hour Reductions.” The Journal of Bone and Joint Surgery, 93-A(7): e31(1)-e31(8).