What on-call actually costs you.
Direct pay is the number everyone quotes and the smallest of the four. Here is the whole calculation, including the one line item that usually decides the answer.
Ask an agency what after-hours on-call costs and you will usually get the on-call differential. That number is real, and it is a fraction of the total. The rest is distributed across line items that live in different budgets and never get added up in the same place.
The four buckets
1. Direct pay
On-call differentials, stipends, per-call rates, and any premium for holiday or weekend coverage. This is the number everyone quotes, and it is the easiest to pull.
2. Overtime and visit conversion
A share of after-hours calls become visits. Those are paid at overtime or premium rates, plus mileage, and they consume a clinician who then has a scheduled day in front of them.
3. Next-day productivity
The one nobody puts a number on. A clinician who took calls at one and three is not delivering a full schedule the following day, and the visits still have to happen, which means either they slip, or someone else absorbs them, or the clinician works longer to catch up. All three have a cost.
4. Turnover
The expensive one, by a wide margin. Replacing an experienced hospice or home health clinician costs a substantial multiple of the annual on-call differential you were paying them, once recruiting, onboarding, orientation, and reduced productivity during ramp-up are counted. Call burden is a well-documented contributor to clinical turnover in these settings.
If outsourcing after-hours triage retains one experienced clinician per year who would otherwise have left over call burden, the retention saving alone will typically exceed the annual cost of the service. That is the argument worth making to a board, not a diversion percentage.
A worked example
Use your own numbers; this is a shape, not a benchmark. Consider a mid-sized agency running a rotation across eight clinicians:
| Line item | How to calculate it |
|---|---|
| On-call differential | Nights covered per year × differential per night × number of clinicians on rotation |
| Overtime on converted visits | After-hours visits per year × average overtime hours per visit × loaded hourly rate |
| Next-day productivity | Disrupted nights per year × estimated lost visit capacity × revenue or cost per visit |
| Turnover attributable to call | Annual clinical departures × share citing call burden × full replacement cost |
| Avoided ED visits | Diverted visits × $2,453 average. Count this only if you carry the financial risk for it |
That last row deserves care. If you are a hospice under a per-diem benefit, an avoided hospitalization has direct financial consequence for you. If you are a fee-for-service home health agency, the ED cost may fall on the payer rather than on you, and counting it as your saving will not survive scrutiny. Know which one you are before you put it in a model.
What the vendor's number is worth
Every vendor in this category, ourselves included, has an incentive to hand you a favourable calculation. Treat all of them as a starting structure rather than a result. The inputs that matter (your call volume, your turnover, your differential, your payment model) are yours, and substituting a vendor's assumptions for them produces a number you cannot defend in a budget meeting.
The single most useful thing you can do before evaluating any vendor is spend an afternoon totalling the four buckets above from your own payroll and HR data. It is usually the first time anyone at the organization has seen the number in one place, and it tends to end the debate about whether the problem is worth solving.
Questions people ask
What does an ED visit actually cost?
The Peterson-KFF Health System Tracker puts the average emergency department visit at roughly $2,453, of which about $1,134 is the evaluation-and-management portion. That is notably higher than the $1,200–$1,400 range that circulates in vendor marketing, and it is the figure we would use because it is the better-sourced one.
Is per-call or flat monthly pricing better?
It depends on who should carry volume risk. Per-call looks cheaper in a quiet month and produces budget variances in a bad flu season. Flat monthly costs the vendor predictability and gives you a number you can put in a budget. For grant-funded and fixed-budget organizations, flat is usually worth more than the theoretical saving.
How do we measure whether it worked?
Pick your baselines before you start: after-hours call volume, how many reached a clinician, ED utilization among your census, and clinician turnover with a note on how many exit interviews mention call. Measure the same things at six and twelve months. Vendors will offer their own dashboards; your own numbers are the ones that will convince your board.
Sources
- Peterson-KFF Health System Tracker, average emergency department visit cost.
- Published research on clinical turnover and replacement cost in home health and hospice.
- CMS Home Health Prospective Payment System, payment methodology.
Cost figures are illustrative structure, not benchmarks. The ED cost figure is point-in-time from a third-party tracker; verify the current value before citing it externally. Run the calculation on your own payroll, HR, and utilization data.
Want help running it?
We will walk through the four buckets with your finance staff using your numbers, without a proposal attached.