Travel nurse agencies under fire as some legislators allege price gouging

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Posted at 5:23 AM, Feb 18, 2022
and last updated 2022-02-18 12:50:51-05

(WXYZ) — The need for nurses in Michigan and across the country has never been higher. Experts say an aging population, low wages, and burnout are to blame.

In an effort to fill critical positions during the pandemic, many hospitals have turned to travel nurse staffing agencies.

Now, some of those hospitals and federal lawmakers are calling these agencies out, saying they are price gouging.

About 200 members of Congress, including Michigan Reps. Elissa Slotkin, a Democrat, and Rep. Tim Walbert, a Republican, signed the bipartisan letter. It says certain staffing agencies that weren't named are taking advantage of overwhelmed hospitals during the pandemic.

Some of those agencies say the price hikes are because they value their nurses, not because they want to increase profits.

Tara Miller has been working as a nurse for more than two decades and spent the last eight years as a travel nurse. That means she's employed by a staffing agency and is positioned at one hospital unit until she is needed elsewhere.

"You can set your schedule more often than not and choose normally. Not all the time, but you can choose if you want to work weekends and holidays and be more flexible with family," Miller said.

Not to mention, they can make a lot more money.

According to ZipRecruiter, a travel nurse's pay rate can be as high as $200 per hour, while the average hospital staff nurse tends to make between $27 and $40 per hour.

"Nurses of course said, 'if I am going to do this job and I am going to do the job of 3, I want to get paid, I want to get paid properly.' I don't begrudge them for that," Rosemarie Torrento, the chief nursing officer and CEO of Health Providers Choice, said.

Health Providers Choice is a mid-market staffing agency based out of Rochester Hills.

"We want to see the market conduct of these companies, and if It is not, that should be curtailed," Laura Appel, the senior vice president of health policy & innovation for the Michigan Health and Hospital Association, said. "We are not arguing about the wages per se. We are arguing about perhaps a 40 percent mark up."

Appel said the MHHA is part of a nationwide effort asking the White House's COVID-19 response team to look into the profiteering of some staffing agencies.

Torrento said it's not price gouging, it's supply and demand. She said agencies have to subsidize travel expenses, acquire credentials for their nurses, and often, these nurses are going into understaffed warzones.

"We paid nurses to go to work for our clients. We literally paid for them to go, so that meant we were in a negative profit margin because there is a commitment," Torrento said.

Torrento said most staffing agencies take about 20% of what hospitals pay them as gross profit, but at the end of the day, their actual take home is about 3% to 5%. The letter from Congress said some agencies have hiked it up to 40%.

She said paying travel nurses what they ask for is necessary to be competitive in the market. "If you don't give it to them, you're not going to be able to stay in business. Not so much because of your profit as an agency, but more so because of your inability to service the hospitals," Torrento added.

In some states like Massachusetts, legislators are considering capping the salaries of travel nurses, something the Michigan Nurses Association calls misguided and unfair.

Michigan Attorney General Dana Nessel said it is also on her radar. A statement from her office reads in part, "We have no active investigations underway, but we are working closely with healthcare professionals and experts to address the exorbitant costs that temporary worker agencies are imposing on healthcare facilities in Michigan."