Staffing Agencies Charging Health Care Industry Exorbitant Rates Amidst A Historic Workforce Crisis
Holly Harmon, RN
2/17/2022
Nurses and nurse aides are the lifeblood of long term care. They spend each day making sure residents have not only their physical needs met, but also their mental and emotional needs. They do everything for residents from monitoring their vitals, to combing their hair, to helping them walk again, or just sitting and listening to their stories. But they’re burned out from the pandemic. And an alarming number have left their positions in long term care—for another field, to stay at home, or to work for a health care staffing company.
The rise of staffing agency nurses and nurse aides is not surprising. The allure of a bigger paycheck with flexible hours is a dream for many. However, the phenomenon is exacerbating a workforce crisis in our long term care facilities and raising considerable questions about their employers—temporary staffing agencies.
According to the Bureau of Labor and Statistics, the long term care industry has lost more than 400,000 caregivers over the course of the pandemic, more than any other health care sector.
Health care providers have gone to great lengths to attract and retain staff, and are doing everything possible in an employee’s market, but limited government reimbursement rates are making it enormously difficult for nursing home providers to outshine the local competition.
Long term care providers cannot limit their hours or close their doors for a day or two a week as some other businesses may do to counter the workforce issues amidst this pandemic. To ensure patients and residents can receive care and services during this challenging time, long term care providers, hospitals and other health care facilities have no choice but to turn to nursing and direct care staffing agencies. Unfortunately, many staffing agencies are charging exorbitant rates – exploiting the pandemic and the labor shortage in a time of national emergency.
These agencies are charging long term care facilities and hospitals two or three times pre-pandemic rates, increasing their profit margins in the process. As a result, middlemen line their pockets, passing only a fraction onto the nurses and nurse aides that work for the staffing agencies doing the real work. The high fees rapidly consume facility resources making it increasingly difficult for health care providers to increase pay and benefits for their current employees, particularly after the economic crisis the pandemic has caused, especially in long term care.
It’s a vicious cycle, and it’s unsustainable. As the remaining workforce is stretched even further, it creates an extremely challenging situation where more and more staff burn out, get poached by the agencies, or leave the industry altogether. Providers are then forced to rely more on staffing agencies, stretching already limited resources.
That is why leaders in the health care industry recently called on regulators and lawmakers to investigate and take appropriate action against this blatant effort to take advantage of the pandemic and the health care workforce crisis. The American Health Care Association/National Center for Assisted Living (AHCA/NCAL) partnered with the American Hospital Association (AHA) in sending a joint letter to White House COVID-19 Response Team Coordinator Jeffrey Zients to bring attention to this matter. We’ve also partnered with many other senior living organizations in writing the White House. These letters follow a request to the Federal Trade Commission urging investigations into these exorbitant rates since we have yet to receive a response.
With this issue unlikely to resolve itself, and due to the seriousness of the potential consequences, AHCA/NCAL will continue our calls for the Biden Administration to advance a solution that ensures health care providers are able to recruit and retain the staff they need to ensure patients and residents have access to the care and services they deserve.
Holly Harmon is the senior vice president of Quality, Regulatory & Clinical Services for the American Health Care Association and National Center for Assisted Living and a registered nurse, licensed nursing home administrator and a fellow of the American College of Health Care Administrators.