Picture a nurse finishing a 14-hour overnight shift in a Chicago ICU, then learning her unit is running three beds short again. That scene plays out across hospitals every single day. The healthcare staffing news coming out of 2025 and into 2026 tells a story that is both sobering and, in certain corners of the industry, quietly encouraging. Shortages are real, they are deep, and they are structural. But the market built around filling those gaps is strengthening in ways that are reshaping how hospitals, clinics, and long-term care facilities think about their workforce for the long term. This article breaks down exactly what is happening, why it matters, and where things are headed.
The Numbers Behind the Shortage
The scale of the problem tends to get lost in broad headlines. Let me make it concrete.
As of mid-2025, total U.S. healthcare employment stood at approximately 18.15 million positions, according to the St. Louis Federal Reserve. That sounds like a lot until you look at the gaps. The Health Resources and Services Administration projects a shortage of more than 141,000 physicians by 2038. Primary care alone accounts for a deficit of over 70,000 providers. Registered nurses face their own math problem: the national supply may fall short by more than 78,000 full-time positions in the near term, with rural and nonmetropolitan areas hit far harder than cities.
Hospitals added around 163,000 positions in 2025, according to Bureau of Labor Statistics data, averaging 13,600 new hires per month. That is a meaningful number. But it was actually a slowdown from 2024, when hospitals brought on 212,000 workers. The pace of hiring is cooling even as the gap between supply and demand refuses to close.
Replacing a single registered nurse now costs hospitals over $60,000 when you factor in recruitment, onboarding, and productivity loss during transition. For systems running hundreds of open RN positions, that adds up to tens of millions of dollars in turnover cost annually.
What Is Actually Driving the Healthcare Staffing Crisis
Blaming COVID-19 is easy, but the problem runs deeper than the pandemic. Several forces have been stacking on top of each other for years.
An Aging Workforce and Aging Patient Population
Nearly 40% of practicing physicians in the United States are expected to be 65 or older within the next decade. That cohort is not delaying retirement. At the same time, the number of Americans aged 65 and older, currently around 55.8 million per the 2023 Census, is expected to reach 82 million by 2050. More older patients needing more care, served by a workforce that is itself aging out.
Burnout That Did Not End With the Pandemic
Over half of physicians have reported experiencing burnout, driven by long hours, mountains of administrative work, and emotional exhaustion. Among nurses, the average hospital RN turnover rate sat at 16.4% in 2024. Nearly 40% of nurses say they plan to leave the workforce by 2029. That is not a retention problem you solve with a free lunch program. It requires structural change in scheduling, workload, and administrative burden.
Training Pipeline Bottlenecks
Nursing schools and medical residency programs cannot simply open the spigot. Faculty shortages, limited clinical placement sites, and capped residency slots slow the flow of new professionals into the workforce to a trickle. You cannot compress a decade of medical training into an emergency response, no matter how urgent the need.
Geographic Imbalance
The shortage is not evenly spread. Rural and nonmetropolitan areas face deficits several times larger than urban centers. By 2038, projections show nonmetro areas facing a 58% shortage of physicians compared to a 5% shortage in metro markets. States like Washington, Georgia, and California are projected to see severe nursing shortfalls by 2035. Some communities are not just underserved. They are effectively without access to consistent care.
Healthcare Staffing News: The Market Is Responding
Here is where the picture gets more complex and, for the industry, more interesting.
The U.S. healthcare staffing market was valued at roughly $79 billion in 2025 and is projected to reach approximately $139 billion by 2035, growing at a compound annual growth rate of around 5.7%. Globally, that number is even larger. The worldwide healthcare staffing market sat at around $45 billion in 2025 and is forecast to nearly double by 2035.
This growth is not happening evenly across every segment. Locum tenens is the clear standout.
Locum Tenens Becomes a Core Strategy, Not a Backup Plan
Locum tenens, the practice of placing physicians and advanced practice providers on temporary or contract assignments, used to be a gap-filler. A surgeon goes on leave, you bring in a locum for six weeks. That framing is gone. Staffing Industry Analysts now describes locum tenens as “a regular part of workforce strategy” for many health systems, especially in primary care, emergency medicine, and surgical specialties.
The segment grew 15% in 2024 and is projected to expand at roughly 5% annually through 2027. Revenue in this space reached approximately $9.6 billion in 2025. Demand is especially strong for emergency medicine, psychiatry, and anesthesiology, all specialties with some of the deepest physician gaps.
Why the shift? For hospitals, it avoids the financial and administrative burden of permanent hiring. For physicians, it offers flexibility, competitive pay, and variety. Several locum tenens specialists, including surgeons and oncologists, actually saw pay rates rise over the past year, even as travel nurse rates fell sharply from their pandemic peaks.
Travel Nursing Finds a New Normal
Travel nursing went through a wild ride. At the pandemic’s peak, weekly rates for travel nurses hit close to $4,000. By 2025, the average U.S. travel nurse earns just under $2,300 per week. That is a 42% drop. Total travel nurse revenue fell by 37% in 2024 alone.
But that correction is not a collapse. The travel nurse staffing segment still holds the largest share of the healthcare staffing market, accounting for nearly 32% in 2025. Hospitals that once paid pandemic premiums are now more selective and cost-focused, but they have not stopped using travel nurses. They have simply rebuilt their expectations around what those placements cost.
Firms that are surviving and growing in this environment have adapted to shorter assignments, increased use of local clinicians, and a sharper focus on specialized nursing roles in emergency departments, operating rooms, and critical care units. Companies like AMN Healthcare, Aya Healthcare, Cross Country Healthcare, and Maxim Healthcare Group are among the players navigating this recalibrated market.
Allied Health and Per Diem Nursing Hold Steady
Allied health staffing, which covers therapy roles, imaging, and a wide range of clinical support positions, is growing at a more modest pace. Revenue growth of around 1% was projected for 2026, with 2% expected in 2027. The diversification across specialties and care settings actually makes this segment more stable than nursing, since no single specialty drives the whole market.
Per diem nursing, where nurses pick up shifts on an as-needed basis rather than committing to assignments, is seeing a modest pullback. The segment contracted somewhat in 2024 but demand in acute care settings is keeping it relevant. One notable trend: more nurses today prefer assignments within 250 miles of home, which is pushing per diem demand back toward local, flexible arrangements rather than cross-country placements.
How Hospitals Are Changing Their Staffing Playbooks
The old model of posting an open position and waiting for applicants does not work anymore. Health systems across the country are rethinking staffing from the ground up.
Internal Float Pools and Cross-Training
Rather than defaulting to agencies every time a unit runs short, many hospitals are building internal float pools, rosters of their own staff trained to work across multiple departments or care settings. Cross-training programs have expanded significantly, giving nurses and allied health workers the flexibility to shift between roles based on daily demand. This reduces agency dependence and keeps institutional knowledge inside the organization.
Vendor Management Systems and Workforce Technology
Technology is playing a bigger role in how hospitals manage contingent staff. Vendor management systems (VMS) and managed service providers (MSPs) are now standard tools in larger health systems. These platforms allow hospitals to centralize the management of temporary staff contracts, monitor rates, and compare agency performance. According to survey data, 94% of healthcare workforce leaders say they use technology to manage flexible staffing, though 92% say integrating that technology properly remains a significant challenge.
Retention Over Recruitment
Smart health systems are shifting budget and attention from recruitment to retention. Replacing a nurse costs far more than keeping one. Leaders are addressing burnout through shared governance models, where clinical staff have more input on scheduling and workflows. Others are investing in career ladder programs, meaningful professional development, and mental health support. It is not glamorous strategy, but it is the work that actually reduces turnover.
Grow-Your-Own Pipelines
Some systems are not waiting for trained professionals to appear on job boards. They are partnering with community colleges, high schools, and vocational programs to build local pipelines. Apprenticeship programs, tuition assistance tied to employment commitments, and clinical placement agreements with nearby schools are becoming standard tools for health systems in competitive or underserved markets.
The Role of Technology in Closing Workforce Gaps
No conversation about healthcare staffing news right now is complete without talking about what technology is and is not doing to help.
AI-powered scheduling tools are becoming common in larger health systems. These platforms analyze patient volume patterns and shift coverage data to forecast staffing needs before shortages become crises. For credentialing, a notoriously slow process that can delay a new hire’s start date by weeks, some firms are using automation to speed up background checks and license verification.
There is also growing interest in using advanced practice providers, nurse practitioners and physician assistants, supported by AI decision tools, to extend the reach of physicians. One specialist, using virtual consultation and AI-assisted triage, can effectively support multiple care teams across different locations. This model is especially relevant for specialties like psychiatry and primary care, where physician shortages are most severe.
That said, the technology is not a staffing solution on its own. It is a multiplier for the professionals who are already there. And right now, there are not enough of them.
Rural America Is Facing a Different Emergency
You can talk about national averages, but the rural picture deserves its own conversation.
In rural and nonmetropolitan communities, the staffing shortage looks less like a workforce challenge and more like a structural crisis in access to care. Some hospitals in small towns run entire weeks without on-site coverage for certain specialties. ICU beds sit empty not because patients do not need them but because there is no one to staff them. Locum tenens physicians and travel nurses have become essential to keeping many rural facilities operational at all.
The disparity is measurable. The projected shortage for rural CRNAs (certified registered nurse anesthetists) is four times higher than in metro markets. Dentist shortfalls in nonmetro areas are forecast to reach 46% by 2038. For primary care physicians, rural areas could see a 39% shortage by that same year.
Some systems have responded with rural stipends, loan forgiveness programs tied to rural service commitments, and telehealth models that connect rural patients to urban specialists remotely. These are genuine solutions. They are also patchwork responses to a problem that will require sustained investment over many years.
What This Means for Healthcare Workers Right Now
If you work in healthcare, or you are considering entering the field, this environment shapes your options in real ways.
For nurses weighing travel assignments, rates have normalized from pandemic highs but are still meaningfully above what most staff positions pay. The average travel nurse rate of around $2,300 per week represents solid compensation, especially for nurses who want flexibility and variety. The locum tenens path is increasingly attractive for physicians who want control over their schedule, exposure to different care environments, and strong earnings without long-term institutional commitments.
For nurses already in staff positions dealing with burnout, the AHA’s 2026 Workforce Scan found that burnout and turnover rates dropped for the first time since the pandemic, which is a meaningful signal. It does not mean the problem is solved, but the trajectory has shifted.
For those entering the field through nursing or medical programs, the demand environment remains strong. Projections across every major staffing category point to sustained need through the 2030s and beyond. The workforce shortage is not a temporary dip. It is a long-term structural feature of U.S. healthcare, which means job security for qualified professionals is not a question for the foreseeable future.
Key Players Shaping the Healthcare Staffing Market
A handful of organizations carry significant weight in how temporary and contract staffing flows through the U.S. healthcare system.
AMN Healthcare is one of the largest travel nurse and workforce solutions companies in the country. Aya Healthcare has grown rapidly by focusing on nurse and allied health placements with competitive pay packages. Cross Country Healthcare covers travel nursing, per diem, and physician staffing across a wide range of specialties. CHG Management and its subsidiary LocumTenens.com are dominant players in the locum tenens space, particularly for physicians. Maxim Healthcare Group operates across nursing, allied health, and personal care services.
In January 2026, IntelyCare acquired CareRev, combining networks of over 35,000 acute care professionals with a strong post-acute care presence. That kind of consolidation signals where the market is heading: larger, more integrated platforms that can place professionals across multiple care settings and geographies with less friction.
Frequently Asked Questions About Healthcare Staffing News
What is causing the current healthcare staffing shortage?
The shortage stems from several overlapping factors: an aging workforce approaching retirement, persistent burnout driving early exits, bottlenecks in nursing school and residency training capacity, and rising demand from an aging patient population. Geographic imbalance makes it worse, with rural areas facing disproportionately deep shortfalls compared to urban centers.
Is the healthcare staffing market growing despite the worker shortage?
Yes. The U.S. healthcare staffing market was valued at roughly $79 billion in 2025 and is projected to reach around $139 billion by 2035. The shortage itself drives market growth, as hospitals and clinics increasingly rely on staffing agencies, travel nurses, and locum tenens professionals to fill gaps that permanent hiring alone cannot close.
What is locum tenens staffing and why is it growing so fast?
Locum tenens refers to physicians and advanced practice providers who work temporary or contract assignments rather than permanent roles. The segment grew 15% in 2024 and is expected to expand about 5% annually through 2027. Growth is driven by physician shortages, clinician preferences for flexibility, and health systems that have come to rely on locums as a permanent feature of their workforce strategy rather than an emergency fix.
How much do travel nurses make in 2026?
Travel nurse pay has normalized from pandemic highs. The average U.S. travel nurse earned just under $2,300 per week in 2025, down roughly 42% from the peak of nearly $4,000 per week during the height of COVID-19. Rates vary significantly by specialty, location, and assignment length, with ICU, OR, and ER specialties generally commanding higher pay.
How are hospitals dealing with staffing shortages?
Hospitals are using a combination of strategies: building internal float pools, investing in cross-training programs, using vendor management systems to manage temporary staff more efficiently, expanding partnerships with training programs to build local pipelines, and shifting more budget toward retention initiatives like burnout reduction, career development, and flexible scheduling.
Are rural areas more affected by healthcare staffing shortages than cities?
Significantly so. Rural and nonmetro areas face projected physician shortfalls of 58% by 2038, compared to 5% in metro markets. Nursing shortages, dentist gaps, and allied health vacancies all skew much larger in rural communities. Locum tenens professionals and travel nurses have become essential to keeping rural facilities functioning.
What is the outlook for the global healthcare staffing market?
The global healthcare staffing market was valued at approximately $45 billion in 2025 and is projected to reach nearly $88 billion by 2035, growing at a compound annual growth rate of around 6.9%. North America holds the largest share at nearly 58% of the global market. Asia-Pacific is expected to grow fastest, at a CAGR of around 7.8% through the forecast period.
Will AI replace healthcare workers and reduce staffing needs?
Not replace, but reconfigure. AI is being used to automate administrative tasks like prior authorization, medical coding, and scheduling, which frees up clinical time. It is also supporting advanced practice providers in delivering care that previously required direct physician involvement. However, the demand for human clinical judgment, direct patient care, and hands-on nursing is expected to grow, not shrink, as the population ages.
What companies are leading the healthcare staffing market?
Key players include AMN Healthcare, Aya Healthcare, Cross Country Healthcare, CHG Management (and its LocumTenens.com brand), Maxim Healthcare Group, TeamHealth, Envision Healthcare, and the Adecco Group. The market is seeing consolidation, with deals like IntelyCare’s 2026 acquisition of CareRev pointing toward larger, more integrated workforce platforms.
Which nursing specialties are most in demand for travel and contract work?
Emergency medicine, critical care (ICU/CCU), operating room nursing, and labor and delivery are consistently among the most in-demand specialties for travel placements. In the locum tenens physician market, emergency medicine, psychiatry, and anesthesiology top the demand list. Behavioral health professionals, including psychiatrists and addiction counselors, face some of the widest supply gaps of any specialty.
Where the Healthcare Staffing Market Goes From Here
The healthcare staffing market is past the sharp swings of the pandemic correction and settling into something more stable and more structural. Locum tenens is a permanent fixture of workforce planning, not a temporary patch. Travel nursing has reset to sustainable rates and volumes. Allied health demand is steady. The underlying driver of all of it, a workforce that cannot keep pace with a growing, aging patient population, is not going away.
Hospitals that navigate this well will be the ones that stop treating staffing as a reactive problem and start treating it as a strategic priority. That means longer-term partnerships with agencies, investment in workforce pipelines, and retention programs that actually address the reasons people leave.
For a closer look at how burnout and workforce well-being connect to patient outcomes, explore our coverage on healthcare worker mental health. You can also find more on how hospitals are using technology to manage costs and staffing across our health system operations section at reuterings.com.
