Nurse shortage sparks spending epidemic

  1. the business journal of milwaukee


    nurse shortage sparks spending epidemic
    phill trewyn
    june 14,2002

    http://www.bizjournals.com/industrie...02/06/17/milwa
    ukee_story2.html?f=et35

    a shortage of nurses caused metro milwaukee hospitals to pay $38.5 million to nurse staffing agencies in fiscal 2001, a 74 percent increase over fiscal 2000.

    eight hospitals in the milwaukee area were hit hardest by the temp staffing expenditures as they combined for a 387 percent increase, to $9.9 million, in fiscal 2001, from $2 million in fiscal 2000. another three hospitals experienced increases of more than 90 percent, accounting for $12.5 million in payments, a 106 percent increase over $6 million in 2000, according to preliminary reports filed with the state's bureau of health care information.

    the skyrocketing staffing costs illustrate the severity of the nursing shortage and its contribution to rising health care costs, say hospital administrators. labor costs comprise an average of 60 percent of the annual expenses incurred by hospitals, said diane peters, vice president of work force development for the wisconsin health & hospital association. in an era when
    hospitals are struggling to recruit more nurses to their staffs, their only alternative is to fill vacancies by paying staffing agencies.

    "it's the cost of the work force," said peters. "it's a supply and demand issue." the number of staffing agencies supplying nurses in the milwaukee has grown rapidly, said mike hayden, president of bestnurseusa inc. in wauwatosa. he said there are more than 65 agencies supplying nurses in the milwaukee area, up from 15 five years ago. "a lot of companies have been moving into town taking advantage of the shortage," he said. even with staffing firms imposing rate increases, hospitals aren't in a position to be picky buyers, said jill mundt, a branch manager for medical staffing network in milwaukee. "price really isn't an issue right now. if you have nurses, they'll use you," she said.

    among the hospitals with the largest increases in payments for temp nurses:
    * columbia hospital, on milwaukee's east side, spent $1.3
    million on contracted nurses in fiscal 2001, compared with $206,335 in fiscal 2000.
    * elmbrook memorial hospital, brookfield, paid $1.6 million in fiscal 2001, compared with $350,000 the previous year.
    * st. joseph's regional medical center, milwaukee, paid $2.6 million in fiscal 2001 compared with $713,608 in 2000.
    * st. luke's medical center on milwaukee's south side spent $8.1 million, the highest in the milwaukee area. the hospital spent $4.2 million in 2000.
    * children's hospital of wisconsin in wauwatosa spent $493,348 in fiscal 2001 after not spending anything on contracted nurses in 2000.

    the state's department of workforce development projects 1,680 nursing openings throughout the state in 2002. through 2008, the agency projects an annual vacancy rate of 1,560. while hospital administrators concede staffing shortages helped trigger the spending increases, they also point to rate increases by staffing agencies as a cost driver.

    staffing agencies in the milwaukee area charge between $40 and $80 an hour for a nurse. rates depend on the nurse's skill level, the time of day for the work shift, and whether they're working on a weekend or holiday. included in that rate is the nurse's salary plus fees that cover the
    agency's costs. at medical staffing network in milwaukee, nurses are paid between $32 and $42 an hour. the agency adds 25 percent to the hourly wage to arrive at the rate it charges hospitals, mundt said. some agencies add up to 45 percent to
    the nurse's base pay in determining rates, she said. hayden said bestnurseusa implemented a 3 percent rate increase this year.
    his agency charges between $48 and $72 an hour for a nurse.

    both hayden and mundt said agencies have become popular career alternatives for nurses seeking higher salaries and more flexible hours than hospitals offer. nurses can make as much as $5 more per hour working for an agency. salaries for registered nurses employed by hospitals range from $19.25 to $31 an hour.

    adding benefits
    to compete for nurses, hospitals have been adjusting their pay rates and have added benefits such as tuition reimbursement and signing bonuses to attract and retain graduates of nursing schools. columbia-st. mary's credits improved wages and benefits with decreasing itsrate of nursing vacancies from 10 percent to 4.1 percent, said cheryl hill, vice president of human resources.
    covenant healthcare system inc., the corporate parent of st. joseph's and elmbrook memorial, is not planning to spend as much on contracted nurses in fiscal 2002, mainly because the hospital system has increased its nursing hires the past year by 52 percent, said paul markovina, a covenant spokesman.
    peters, of the wisconsin health & hospital association, is also a member of the health care worker shortage committee that was created in april by gov. scott mccallum. the committee is developing programs that foster more recruits into the nursing profession. peters said one-third of the state's nursing work force will retire within five years. hospitals also face shortages of operating-room technicians and radiology technicians, she said.

    aurora health care sees the use of staffing agencies as a short-term solution to the nursing crunch, said nancy grisdale, director of employment for aurora's metro region. aurora is working with the health care worker shortage committee to get more nurses in the employment pipeline. "we're optimistic about that," grisdale said.



    not one word about hospital working conditions driving the staff away...
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  2. 4 Comments

  3. by   EricaCCRN
    shame on us nurses contributing to the rising healthcare costs. Why, no wonder the elderly are going to lose their medicare. The evil greedy nurses!!! And forget that the CEOS never turn down their 30% yearly pay raise. Its those damn nurses' fault!
  4. by   Sleepyeyes
    I may be getting cocky here, but I really think if the base rate of nurses' pay is raised AND the patient:nurse ratio is decreased, then more nurses will come back to the bedside.

    More nurses = better staff-to-patient ratios = better teamwork = less mistakes = greater job satisfaction = increased "customer" satisfaction = less lawsuits = less burnout = more career nurses.



    Maybe the suits are secretly rocket scientists, and that's why it's taking them so long to figure this out?
  5. by   nursedawn67
    Originally posted by Sleepyeyes
    I may be getting cocky here, but I really think if the base rate of nurses' pay is raised AND the patient:nurse ratio is decreased, then more nurses will come back to the bedside.

    More nurses = better staff-to-patient ratios = better teamwork = less mistakes = greater job satisfaction = increased "customer" satisfaction = less lawsuits = less burnout = more career nurses.



    Maybe the suits are secretly rocket scientists, and that's why it's taking them so long to figure this out?

    AMEN!!!!
  6. by   fedupnurse
    When will the healthcare executives see the light? When will they realize that they and their grossly overpaid consultants are the ones directly responsible for this huge mess? When they fess up and correct the deplorable working/patient care conditions and pay us on a par with other professionals who aren't even responsible for saving your life, supply us with the same retirement benes that the suits get, THEN staff nurses will stop jumping over to Agencies and stop leaving the bedside in droves. These idiots have no idea what the word RETENTION means!!!
    Last edit by fedupnurse on Jun 19, '02

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