Many hospices have relied heavily on travel nursing agencies to bolster their clinical teams during the pandemic. Now, a pair of bills currently before Congress would require a federal study of the impact of these agencies on health care.
The Travel Nursing Agency Transparency Study Act would task the US Government Accountability Office (GAO) to study how contract nursing companies have done business over the past two years, including accusations of price gouging.
Sen. Kevin Cramer (RN.D.) introduced the bill in the Senate (S.4352), with Rep. Greg Murphy (RN.C.) sponsoring the House version (HR 8576).
“Unfortunately, there have been reports of travel nursing agencies profiting from the pandemic with questionable business practices that drive up costs and seriously harm our healthcare providers and patients,” Murphy said, a doctor, in a press release. “Our bill will examine the impact of these practices on the healthcare industry and ensure transparency going forward.”
If passed, the GAO will review travel agency rates and seek to determine whether those companies have contributed to the labor shortage. The federal government would also closely scrutinize their benefits against the amounts they pay nurses in salaries. The GAO is a nonpartisan agency that conducts research and investigations on behalf of Congress.
Healthcare providers and industry groups have questioned the legitimacy of the skyrocketing costs, with some calling them exorbitant. The American Hospital Association was vocal On the question.
Palliative care organizations have endorsed the bill to study the practices of travel nursing companies, including the National Hospice and Palliative Care Organization (NHPCO) and its advocacy arm, the Hospice Action Network (HAN).
“Hospices cannot compete with the high and excessive prices demanded by travel agencies. These agencies appear to have capitalized on the public health emergency by charging exorbitant rates,” Ben Marcantonio, interim president and CEO of NHPCO and president of HAN, said in a statement. “We look forward to continuing to work with Senator Cramer and Congressman Murphy to gain additional support and prioritize finding immediate workforce solutions to ensure access to health care. quality end of life.”
The cost of supplementing their workforce has been a sore point for hospices and other healthcare providers over the past couple of years.
Traveling nurses typically receive higher salaries than full-time staff at healthcare companies, and some have seen their salaries double or triple as more providers seek their services. This has further complicated the recruitment and retention of hospice operators who compete with these companies for job seekers.
In earnings conference calls last year, palliative care and home care provider LHC Group (NASDAQ: LHCG) said it would save $1.4 million per quarter for each 100 basis points that it could reduce the use of contract nurses.
Home health and palliative care giant Amedisys (NASDAQ:AMED) saw its palliative care revenue in the third quarter of 2021 drop by $2 million, which the company largely attributed in part to higher utilization than the normal for contract nurses, the company said in an earnings call. Hospice segment revenue in the third quarter totaled $198 million.
Those were last year’s numbers, and both companies (among others) have since reported reductions in travel nurse engagement, particularly as the Ommicron surge has subsided and fewer employees went into quarantine.
The labor shortage predates the pandemic and will certainly extend beyond it, leading some industry watchers to conclude that utilization will likely decline in the long term – but not to pre-COVID levels. .
Currently, the demand for travel nurses is on a rollercoaster ride as healthcare companies implement strategies to reduce utilization and COVID infections rise and fall.
Over the past few months, staffing firms have seen demand trends fluctuate between a 5.8% increase and a 3.3% decrease, accompanied by a slight drop in prices, according to research by Brian Tanquilut, equity analyst for Jeffries Financial Group.
Although accusations of price gouging have been circulating, they have yet to be proven. Some commenters and analysts have postulated that the rate increases reflect shifts in supply and demand rather than harm.
“I urge caution that our experience calls it a ‘price hike,'” Bruce Greenstein, director of strategy and innovation for the LHC group, previously told Hospice News. “To some degree, maybe it’s just a market that works efficiently in that we have massive excess demand for limited supply. This is no ordinary product; it’s a work. As a market we are so desperate for this.