Hospitals take staffing challenges into their own hands

The high cost of travel nurse labor — and the high fees demanded by their temp agencies — have led some hospitals to take staffing into their own hands, according to a Dec. 13 Fortune article in collaboration with Kaiser Health News

Temporary nurses have helped fill gaps in the hospital workforce since COVID-19 drove many to quit, retire or switch fields, according to the article. However, demand has increased the cost of travel labor 500 percent since the pandemic, negatively affecting hospitals' finances. Travel nurses now earn an average of $3,000 per week, but they could make up to $10,000 per week in late 2020, KHN reported. 

Atlanta-based Piedmont Healthcare spent around $20 million on travel nurses each year prior to the pandemic, CEO Kevin Brown told Kaiser Health News. But in the past fiscal year, the health system spent $400 million, about one-third of which went to staffing agencies. 

To cut back on those costs, hospitals are creating their own staffing agencies that offer flexible work to local nurses. Pittsburgh-based Allegheny Health Network has created a "flexible" nursing team that can work self-scheduled shifts across the system's 14 hospitals, or be tasked with weeklong or multiweek assignments in one place, according to KHN. Philadelphia-based Jefferson Health recently created its own staffing unit, as did Piedmont Healthcare. And Chesterfield, Mo.-based Mercy is using an app to allow nurses to grab gig shifts. 

Detroit-based Henry Ford Health started an internal staffing agency in 2013, and the cost is significantly less than using an outside agency despite offering nurses higher hourly pay, program director Kim Sauro told KHN

Chris Eales, president of medical temp agency Premier Healthcare Professionals, told Kaiser Health News that hospital staffing agencies do not pose an "immediate threat" to travel nursing. Mr. Eales said his agency is still placing nurses at overflowing hospitals, and internal agencies would have to build up credibility before they can compete. 

"I don't think we'll ever be temp agency-free," Claire Zangerle, DNP, RN, chief nursing executive at Allegheny Health Network, told Kaiser Health News. But flexible hospital work teams "are going to change the labor market." 

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