Conn. Hosp. pays 4k/wk or 208k/yr to agency to fill one full time R.N. job

  1. Senator Dodd of Connecticut made this statement in the Senate Committee hearing on the Nursing Shortage, "One hospital in my state is paying $4,000 per week for each full time equivalent nursing slot, or $208,000 per year, ...dealing with a private nurse staffing agency.

    Unbelievable! They could have hired 4 full time nurses for that, and given them a big fat raise. Instead they chose to line the pockets of agencies!

    Hear it for yourself at 59:50 of the Senate Hearing 5/17. Click on the orange "View HealthCast" button.SenateHearing

    He goes on to say at "Southern Connecticut University", candidates are beating the doors down to become nurses. (Probably because they want to work for this agency) Anyone in Southern Connecticut know if this is true? Are there droves wanting to enroll in nursing schools down there?

    Then he goes on to talk about a strike that was just settled in Connecticut. "The strike wasn't about pay, it was all about working conditions". Well I'd like to say it should have been about pay if these hospitals can pay agencies 5 times the amount they pay their own staff. Then in his next breath he says "...uh pay is obviously an issue, but it is not the dominate issue."
    Anyone else out there starting to feel like they have "SUCKER" tatooed to their forehead?

    Dodd then refers to a suprising statistic that there are more injuries in nursing 1:13 than in construction trades 1:8.

    Nurses have been taken for granted too long!

    [ May 23, 2001: Message edited by: PeggyOhio ]
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  2. 8 Comments

  3. by   -jt
    Do you get the feeling he was talking about the salaries paid to the strike-breaking nurses from the scab agency since there was just a large strike in CT? That salary is great but how many weeks can you physically work 7 days in a row of 12-16 hr shifts? I dont think anyone can, so no nurse is getting $208k/yr. That had to be a hypothetical example but I hope nurses in CT wrote Dodd & the newspapers to point out his own contradictions. Recently, a province in Canada upped its hospital RN salaries 22% as a recruitment incentive & it worked - masses of RNs suddenly came out of no where looking for refresher courses to go back to work in hospitals.

    BTW....... its not surprising at all about those injury statistics. Its been known for a long time. In fact, if you want to buy private disability insurance & you tell them you are a nurse, you have to tell them you have supervisory responsibilites because bedside nurses are on their list of hard physical laborers. The insurance companies dont want to insure them for disability because they are a high risk & if they do insure them, the nurses pay a high premium for it. EVERYBODY knows our conditions suck - except our administrators, it seems.

    Re: workplace injuries - check out:

    A cry for health:
    Poor working conditions driving nurses out of hospitals
    http://www.sfgate.com/cgi-bin/articl...0/AW135757.DTL
  4. by   PeggyOhio
    No -jt I think he was saying that if a hospital cannot fill a full time R.N. position (due to the "shortage") and has to resort to hiring agency nurses to fill those hours it will cost them that much. Doing the math that is $100 per hour.

    Agency nurses around here can make as much as $40 per hour easily, what I don't know is how much is the agency making, $60? In otherword how much is the hospital being charged by the agency to provide that nurse.

    The nurse isn't getting $208,000 a year. She'll get the $40/hour the agency contracts her for. And she won't be exhausting herself.
    She can pick and choose what hours and when she wants to work. She'll only have to work 8hrs a week if she is so inclined.

    Hypothetically this is how it would work. An agency contracts with the hospital to provide the hospital enough nurses to cover the forty hour full time slot. And each nurse they have only wants to work one day a week. It will take five nurses to cover that one full time slot through the agency. Each nurse will get paid $320 per week( $40 x 8hrs). Or one nurse could work the five days and make $1,600. But the agency will get the other $60/hr x 40 hrs. = $2,400 per week! And that is only one position. Imagine if that agency has 200 or more full time hospital contracts. They would be raking in nearly $500,000/per week! Or 6 million a year. I think that is the dirty little secret that Senator Dodd inadvertantly let out of the bag. Well, it probably isn't so much a secret as it is many of us never really sat down and thought about it. I wonder how many agency nurses really know or even care what their agency is really charging the hospital for them. Agency's are the real winners in the supply and demand game not nurses!

    Hospitals need to wake up and give incentives to get nurses back on staff and cut out the middle "agency" man. Or maybe like Charles implied we should all become our own agency.

    I also wonder what a staff nurses wages really are per hour when you tally up the benefits? Anyone know that. I heard that health care benefits translate into about $5-6 per hour. I wonder what the rest would add up to? Would it approach $100/hour? I doubt it.

    [ May 22, 2001: Message edited by: PeggyOhio ]
  5. by   Charles S. Smith, RN, MS
    Originally posted by PeggyOhio:
    <STRONG>No -jt I think he was saying that if a hospital cannot fill a full time R.N. position (due to the shortage) and has to resort to hiring agency nurses to fill those hours it will cost them that much. Doing the math that is $100 per hour.

    Agency nurses around here can make as much as $40 per hour easily, what I don't know is how much is the agency making, $60? In otherword how much is the hospital being charged by the agency to provide that nurse.

    The nurse isn't getting $208,000 a year. She'll get the $40/hour the agency contracts her for. And she won't be exhausting herself.
    She can pick and choose what hours and when she wants to work. She'll only have to work 8hrs a week if she is so inclined.

    Hypothetically this is how it would work. An agency contracts with the hospital to provide the hospital enough nurses to cover the forty hour full time slot. And each nurse they have only wants to work one day a week. It will take five nurses to cover that one full time slot through the agency. Each nurse will get paid $320 per week( $40 x 8hrs). But the agency will get the other $60/hr x 40 hrs. = $2,400 per week! I think that is the dirty little secret that Senator Dodd inadvertantly let out of the bag. Well, it probably isn't so much a secret as none of us ever really sat down and thought about it. I wonder how many agency nurses really know or even care what their agency is really charging the hospital for them.

    Hospitals need to wake up and give incentives to get nurses back on staff and cut out the middle "agency" man. Or maybe like Charles implied we should all become our own agency.

    I also wonder what a staff nurses wages really are per hour when you tally up the benefits? Anyone know that. I heard that health care benefits translate into about $5-6 per hour. I wonder what the rest would add up to? Would it approach $100/hour? I doubt it.

    [ May 22, 2001: Message edited by: PeggyOhio ]</STRONG>

    Peggy...it really is no secret how much agencies charge for supplemental staffing. Having been a nursing administrator with 2 services in the past, I can tell you the overage is incredible. But that really does not touch the amount of money that traveling services charge to hospitals for nursing labor. Most agencies have lavish office suites, tremendous overhead, and are competing with hospitals for staff. The money is better, so who gets the staff? The agencies of course and then the supply statistics shift and the agencies control a big chunk of nursing supply. We realized this when we formed our professional practice group. We do not compete with hospitals or agency for nursing labor. We are a semi-closed group of nurses who have joined together to offer services at fair market prices, lower than the agencies. In essence, we have cut out the middle man and have lowered the threshold for charges. By eliminating the middle man and lower overhead, we are able to earn a substantial income but at less cost to the hospitals than agencies would charge. Our group is well received in our area by the hospitals, so our concept is working well.

    regards
    chas
  6. by   PeggyOhio
    Charles,
    I suppose "secret" was a poor choice of words. Perhaps "not common knowledge" would be a better way to describe the revelation that hospitals are really paying agencies that much. Obviously you aren't shocked, however, so I must assume it is not at all unreasonable to believe the agency is making $60/hr on their nurses. I must say Senator Dodd seemed a bit taken aback by this, and I admit I am too.

    I have to say I never sat down and did the math on it. But now that I see it, I find it apalling.

    Nurses wages have been sagnant since 1992. Hospitals treated us like so much "dime a dozen" disposable equipment, and drove nurses from the bedside.

    Now that the nurses have left and become a rare commodity they can shell out that kind of money all of a sudden!

    The rhetoric has all of a sudden changed into "nurses,our vital human resource". I want to scream, "DON'T KISS UP TO ME NOW, YOU BUNCH OF #@$%&*!" Start paying your staff half of what your paying those agencies and you won't have a nursing shortage!

    [ May 23, 2001: Message edited by: PeggyOhio ]
  7. by   -jt
    ok I see what youre saying now. But according to some administrators, they PREFER using the agency even though its a higher cost because its not a PERMANENT higher cost & what they lose paying that out when they need the extra help, they more than make up for when they can get away with bare bones staff & keeping the payroll & compensations to a minimum. They have more control when they use agency instead of hiring F/T staff becaue they only use them when absolutely necessary & they arent a permanent overhead. It may sound ludicrous to us but on their spread sheets, it works out to their advantage in the long run. We could never get the actual numbers that the hospital was paying the agency - an RN told us that the hospital pays the agency $60-$75/hr & the RN gets $40/hr of that - but we never could get this confirmed.

    In our last negotiations we asked for the expenditures for supplemntal staffing & the hospital had to turn it over. It showed that they had spent so much on agency nurses last year that they could have hired 55 full time RNs. That piece of paper shot down their argument that they had no money & even the federal mediator told them their own records dispute that. Even though they spent alot on agencies, it was a savings to them NOT to add 55 new RN employees to the payroll or spend any money to make any permanent improvements in conditions or compensation to attract RNs to those positions.

    New grad ADN RNs have starting salaries of around $55K - ontop of that is pay for each yr of RN experience for a veteran RN, shift diff, certifications diff, degrees diff,5 weeks vacation, 100% free family medical coverage (costs the hospital $5000 per family), sick leave, full pay for jury duty, maternity leave, disability leave, 12 paid holidays, paid personal days, paid continuing ed days,etc. It all adds up & when they have low census & are making less, they cant just stop paying all that stuff & remove people from the payroll. With agencies they dont have any of the headache can cancel them whenever & dont have the overhead.

    These are businessmen. If they were losing money by using agencies, they would be the first ones screaming & jumping over each other in a rush to make all the improvements they could to attract RNs away from each other & to their own facility. They arent doing any of that. I still think that they prefer not to have nurses & they are loving this shortage because its the perfect excuse for them to save more money - just do nothing to improve things, do nothing to attract RNs, use agency to fill in when the "fit hits the shan" but otherwise keep "overhead to a minimum", make the staff "do more with less", say "we'd love to hire more RNs but there just arent any to be found", & throw in a few less expensive UAPS to pick up the slack. They save a bundle.
  8. by   PeggyOhio
    -jt
    So what you are saying is hiring through agencies and paying $208,000/yr for one full-time R.N. position is more cost effective, for the administration than filling the position.

    It seems unbelievable. But at this point I would believe anything.

    I wish I knew if Senator Dodd or any of the legislators involved in the Hearing were aware of this? And would they care?

    So following your line of reasoning the bottom line problem is because we are a female profession. The fact is that traditionally many of us have had spouses we can rely on for pension benefits (401K etc.) and health benefits; and sick time, and vacation time is meaningless when your free to choose when and how much you want to work and your making twice what your counterpart staff nurse makes; and because there are so many nurses that have these perks, luxuries, benefits elsewhere they don't value them and give them up readily; therefore agencies have become the primary source of nurses for hospitals? And it's more cost effective that way?

    Is it fair to look at this another way and ask; has the union priced themselves out of jobs? I don't know we don't have a union were I work. And we don't get full paid benefits. And our sick time and vacation time is all lumped together as PTO time (personal time off). And we don't get experience differential, certification differential, degree differential or paid continuing ed days. (Man, I'm movin' to NY, -jt!)It all sounds great, but then again have you priced yourselves out of jobs?

    Did this hospital where you work try to hire full time nurses and fail, so it turned to agency nurses. Was it because of the "nursing shortage". Did they have positions posted and no one applied or is the "nursing shortage" really just imaginary. Do we really have enough nurses, they just choose to work for agencies and hospital prefer using them.

    If the answer is the latter, it seems to me hospitals are being very short sighted. What happens down the road when the pendulum swings and more nurses are working for agencies than hospitals? Won't the agencies then be calling the shots on how much hospitals will have to pay?

    Aside from the cost effective piece of using agency nurses on the "spred sheet", there is a cost in efficiency and morale, and consequently quality of care, on the units that administrations perhaps don't take into consideration, and they most definitely should.

    Quality care = patient satisfaction. How do you put a dollar amount on your reputation in the community? Relying heavily on agency nurses negatively impacts (IMHO) these areas.[Not you Charles, yours is a unique situation, please put your hand down ]

    Just as floating nurses from unit to unit does. Continuity of care is diminished, regular staff becomes bogged down trying to orient the non-regulars while keeping pace with their own work. Non-regular's are slower, less efficient, they have to ask where everything is, how is this or that done, who do I call, where do I send it, etc., etc., etc.

    So there is a price being paid, and ultimately it is the hospital itself, paying that price, ( and make no mistake it is a hefty price that is being paid; unhappy workers, unhappy patients, mistakes being made, lives being negatively impacted, a system in chaos) it is a shame that none of the "higher up's" seem to recognize it.

    This thread has made me very sad and very tired. I think I'll take a nap.

    [ May 23, 2001: Message edited by: PeggyOhio ]
  9. by   -jt
    The hospital did NOT try to hire nurses. The hospital froze all open positions & any new ones as they became vacant thru attrition & did not try to fill them at all. They were not posted. They were not advertized. If we didnt have union protection & contract language to prevent it, those positions might have even been eliminated or converted to something else (LPN,CNA). The hospital just froze the positions, said it couldnt find nurses, & used agency when needed to fill the holes. Cancelled them when they were not needed. Agency is not to be the primary source of staffing here for all the reasons you mentioned about continuity of care & community, etc. They are still just supplemental staffing options & our contracts provide for hiring permanent staff if it is shown that a need exists by excessive use of agency staffing. The hospital did not do this until we forced them to.

    Priced ourselves out of a job? I dont think so. We're out here all demanding to be paid what we are worth but when we start to get close, we ask if we're pricing ourselves out of a job. No. We are forcing the employer to pay for what he's getting.

    In our situation, when it came to light that 55 RN positions were obviously needed if they were using that much agency hours, we had the authority to force the hospital to open up frozen RN positions, advertize, hire full time & part time staff & reduce use of agencies. Then they had to provide incentives to draw nurses to fill those newly opened positions.... and that came in the form of higher fiancial compensations including increasing the amounts for each yr of total RN experience & no salary cap for senior nurses, severe restricitions on mandatory OT, flexible scheduling, and agreeing to the safe staffing ratios which WE set for each unit. The positions were filled, and agency use decreased.

    Hypothetically, if a hospital uses agency everyday of the yr, it would be paying that $208,000 as the Senator said but the thing with agency is that they dont use them everyday here. They cant use them regularly as staff - they have to hire permanent staff if they have a need & are using agency regularly. They can only use them when necessary - for RNs out on vacation, disability, maternity leave, jury duty, a rash of sudden sick calls, etc. They cant use them as staff, so they wouldnt ever be paying that salary. The highest they paid for one agency nurse was $96,000. We have senior nurses making more than that PLUS all their benefits, vacations, paid days, sick time bank, etc. For the hospital, the agency is just a periodic flat rate expense but a permanent senior nurse is a headache.

    They save money when the census falls, they cancel the agency & do not have the overhead of a F/T or P/T staff person on the books.

    So my hospital violated that by using all that agency & even with using enough agency to pay for 55 F/T RNs, the hospital preferred this rather than hiring those 55 RNs permanently. But we are unionized so they cant make all the decisions by themselves. And had a fit when we were able to force them to stop, open positions, make improvements to attract RNs & hire permanent staff. If they had been losing money with agency use, those businessmen would have done this themselves & not have had to face a strike vote before doing it.

    There ARE nurses out there. The hospital just has to make it worth their while to come to work.....and it has to recognize that it is not only competing with other area hospitals but also competing with the business world & agencies for its workforce so it has to put its money where its mouth is. They know it but instead they are still trying to save a buck on our backs & living in denial.
  10. by   kennedyj
    I always wonder because they will pay agencies large amounts of $$$ but keep the same lower salaries for permanent staff. In the long run they could raise their own nurses salary a little higher and save in the long run... atleast it would seem.
    Jared

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