Traffic Nurse Pay Remains High As States Discuss Wage Caps
To stop price gouging, a proposed law in Missouri is calling for the resolution of felony charges against healthcare staffing agencies that raise their prices substantially during a declared emergency.
A bill in New York includes a cap on the amount recruitment agencies can charge healthcare providers. And a Texas measure would allow for civil sanctions against such agencies.
Related: Hospital systems, constrained by the cost of temporary nurses, are setting up their own staffing agencies.
These proposed rules – and others in at least 11 other states, according to the American Staffing Association industry trade group – come as demand for traveling nurses who work temporary at different facilities surged to unprecedented levels during the worst of covid-19. pandemic.
Hospitals have long used temporary workers, often hired by outside agencies, to meet their staffing needs. But by December 2021, the nation’s average weekly nurse fare had risen to $3,782, up from $1,896 in January 2020, according to Becker’s Hospital Review analysis of Vivian Health recruitment platform data. On this platform alone, over 645,000 active vacancies for traveling nurses were registered in the last three months of 2022.
Some ICU traveling nurses were making $10,000 a week at the height of the pandemic, prompting burnt-out nurses across the country to leave their jobs in hospitals for more lucrative temporary assignments. Desperate hospitals that could afford it offered signature bonuses of up to $40,000 to nurses willing to instead take on multi-year commitments to join their staff.
Rising costs prompted hospitals and their allies across the country to rally against what they saw as price gouging by recruitment agencies. In February 2021, the American Hospital Association called on the Federal Trade Commission to investigate the agency’s “anti-competitive pricing”, and a year later, hundreds of lawmakers called on the White House to do the same.
No significant action has been taken at the federal level, so the states are trying to take the next step. But according to Hanna Neprash, a professor of health economics at the University of Minnesota, the resulting patchwork of regulation could pose another problem for hospitals in states with fixed rate slats or other restrictive measures. Such institutions may find it difficult to hire traveling nurses or face a lower quality workforce during a national crisis than neighboring states without such measures, she said.
For example, Massachusetts and Minnesota had cap rates for temporary nurses before the pandemic, but during the crisis they were raised and even eliminated for some staffing agencies.
And any new caps could be met with stiff resistance, as happened in Missouri last year with the proposed rate caps.
As the wave of covid omicron options began to subside, Missouri legislators considered a proposal that would set the maximum rate recruitment agencies could charge at 150% of the previous three years’ average wage rate plus necessary taxes.
The Missouri Hospital Association, a trade group representing 140 hospitals statewide, backed the bill as a fight against underhanded staffing firms rather than nurses who can demand higher wages, spokesman Dave Dillon said.
“During the pandemic, there were staffing companies that made a lot of promises and didn’t always keep them,” Dillon said. “It gave both scalpers and bad actors a chance to play in that space.”
The nurses, however, denounced what they called excessive government interference and argued that the bill could exacerbate the state’s existing shortage of nurses.
Teresa Newbanks, a nurse practitioner, asked lawmakers to imagine the government trying to dictate how much a lawyer, electrician or plumber can earn in Missouri. “This will never be allowed,” she told the committee that considered the bill. “However, that’s exactly what’s happening with nurses right now.”
Another of the nearly 30 people who testified against the bill was Michelle Hall, a longtime nurse and chief of nursing at the hospital, which opened its own recruitment agency in 2021, in part, she says, because she was tired of seeing her peers leave. industry due to concerns. about insecure personnel ratios and low wages.
“I felt I had to protect my nurses,” Hall later told KHN. Her nurses typically receive about 80% of what she charges, she said.
Typically, about 75% of the price a recruiting agency charges a medical facility is for things like payroll, payroll taxes, workers’ compensation programs, unemployment insurance, recruitment, training, certification and credentialing, Toby Malara said. vice president. president of the American Personnel Association trade group.
He said hospital executives, “without understanding how a staffing firm works,” mistakenly assumed that price gouging was taking place. In fact, he said that many of his trade group members have reported declining profits during the pandemic due to high pay for nurses.
Although Missouri legislators have not passed a rate cap, they have made changes to regulations governing recruitment agencies, including requiring them to report the average amount charged per health worker for each category of staff and the average amount paid to those workers. These reports will not be made public, although the State will use them to prepare its own summary reports that do not list individual agencies. The public comment period for the proposed rules was scheduled to begin on March 15.
Hall was unfazed by reporting requirements, but she said another change could prompt her to close a store or move her business out of state: Agencies will be prohibited from charging compensation when their employees are hired to work at the facility where they work.
“All the money I invested earlier is irrelevant to hire and train this person,” Hall said.
Dillon called the complaint “pretty rich,” noting that agencies usually hire hospital staff by offering higher wages. “Given the agency staff premiums, I find it hard to believe that this risk is not built into their business model,” he said.
Of course, as the pandemic has subsided, the demand for travel care has declined. But salaries have yet to return to pre-pandemic levels. According to Becker’s Vivian Health data report, the average weekly travel nurse pay was $3,077 in January, down 20% year-over-year but still 62% up in January 2020.
Given the acute pandemic-related challenges hospitals are facing, Dillon said health system leaders are looking for proactive solutions to address current workforce challenges, such as pay increases and investment in the nursing workforce.
A hospital in South Carolina, for example, offers day care to employees’ children to help them keep them. California lawmakers are considering setting a $25 an hour minimum wage for healthcare workers. And some hospitals have even set up their own staffing agencies to reduce their reliance on third-party agencies.
But the momentum to address directly the high rates of visiting nurses has not gone away, as evidenced by a legislative initiative in Missouri this year.
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The last sentence will apply to certain agencies if there is a “gross discrepancy” between the prices they charge during the emergency and the prices they charged prior to the emergency, or those that other agencies currently charge for similar services, and if their incomes are at least 15% higher. than before the emergency.
Malara said he doesn’t have much of a problem with this year’s bill because it gives agencies the ability to defend their practices and pricing.
Kentucky applied existing price gouging rules to health care staffing agencies last year. The rules that set criteria for acceptable prices allow for higher labor costs to increase them. Malara said that if the Missouri bill gains momentum, he will point out the wording to its sponsor and ask her to clarify what constitutes a “gross discrepancy” in pricing.
The bill’s sponsor, Missouri Senator Carla Eslinger, a Republican, did not respond to requests for comment on the legislation.
Hall said she was opposed to any rate caps but was ambivalent about Missouri’s new proposal. She said she saw agencies raise their prices from $70 an hour to over $300 while she was a nurse supervisor at a hospital at the height of the pandemic.
“All these agencies that jacked up prices,” Hall said, “all they did was put that money in their pocket. They didn’t do anything special or special for their nurses.”
Kaiser Health News is a national health policy news service. It is an editorial independent program of the Henry J. Kaiser Family Foundation and not affiliated with Kaiser Permanente.