Travel nurse salaries are rising due to demand. Some hospitals say it’s price gouging

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Derek McKenzie, an ICU nurse at King's Daughters Medical Center in Brookhaven, Mississippi, finishes helping a critically ill COVID-19 patient.

ICU nurse Derek McKenzie finishes helping a critically ill COVID-19 patient at King's Daughters Medical Center in Brookhaven, MS, Jan. 23, 2022.

Shalina Chatlani, Gulf States Newsroom

Last year, Kimberly Carson got tired of the nursing job she had for eight years at a hospital in Illinois.

She didn’t think she was being paid well enough to make up for the increased workloads and stressors that came with the COVID-19 pandemic. She loved working with her manager and coworkers, but issues within the hospital — like staff retention — drove her to her breaking point.

Adding to her feelings of frustration were the travel nurses she worked side-by-side with that were making much more than she was.

“I feel like you should be able to afford to pay your staff more money and better wages,” she said. “It makes you feel unwanted. It makes you feel kind of used.”

By the time the hospital offered her bonuses to make up for the stress, it was too little, too late. So, she left.

Since December, Carson has worked as a travel nurse, making twice her old salary on a temporary contract in Mississippi — earning around $60 an hour.

But where workers like Carson see opportunity, those running hospitals see a nuisance. The American Hospital Association says healthcare staffing agencies are exploiting the pandemic, forcing them to pay astronomical wages for temporary nurses and other staff.

Demand for travel nurses has soared. According to data from travel nurse agency Aya Healthcare, before the pandemic, hospitals sought to hire about 7,000 travel nurses at any one time. By 2021, they were looking for 28,000. As supply has remained limited, and demand is high, the price of these nurses keeps going up.

That’s due in part to COVID-19 relief money Congress sent states. Most states are using it to hire travel nurses. In the Gulf South, Mississippi has spent around $90 million on temporary medical staff. Louisiana has spent nearly $250 million. Nearby in Texas, the government has spent over $7 billion dollars.

Now, nurses who sign on with the agencies and who are willing to travel can more than double their salaries — like Carson did — because the influx of money has caused rates to rise. Some hospitals, which can’t afford these exorbitant prices, are asking the White House to do something about the high costs they’re paying.

“Some nurse staffing agencies, we believe, are exploiting the severe workforce shortages and charging exorbitant fees,” Robyn Begley, with the American Hospital Association, said.

Price gouging, or the labor market at work?

A year ago, AHA asked the Federal Trade Commission to investigate staffing agencies for price gouging. In mid-January, it re-upped its demands in another letter to the FTC. The agency won’t confirm whether it’s investigating. In response, the association has sent multiple letters to the White House, too.

But, Toby Malara, of the American Staffing Association, says staffing companies aren’t engaging in nefarious behavior, but are responding to the current labor market.

“Their prices are being driven by the wages and the cost of labor that have come about because of the pandemic,” Malara said, adding that some hospitals and governments are actually making things worse by not being good stewards of federal COVID relief money.

“If federal money is used to pay and retain nurses and pay them bonuses. That could be helpful, but also it gives them a chance to push out money and pay those higher rates without thinking about it as much.”

What happens, Malara said, is a shift in what nurses decide to demand.

“If you’ve got one hospital that is paying this much money and the nurses find out about it, then it’s going to have a trickle effect down to all the other hospitals.”

A spokesperson from Mississippi’s Emergency Management Agency says they try to look for the best deal on contracts with temporary staffing agencies. However, they have to pick travel nurse contracts based not only on price but also availability, which means sometimes having to pay more for quicker action.

Possible solutions for now, the future

Last week, nearly 200 members of Congress signed on to another letter to the White House, urging quick action to reign in high travel nurse costs.

NPR reached out to a Biden administration official, who declined to speak publicly about a complaint to the FTC — an independent agency — but said that the White House has deployed federal surge teams, which include temporary staff that can help hospitals facing worker shortages and high patient levels.

The official said the White House also sends medical personnel from the military and has helped cover costs for National Guard deployments to hospitals with staffing shortages. Additionally, the official said the White House is trying to accelerate visa processing for 5,000 foreign health care workers.

Some states, like Massachusetts, are trying to create rate caps. Malara, however, said that could drive nurses away to other states to seek better wages.

More permanent solutions, Malara said, should be aimed at retention efforts and growing the pool of nurses. That includes increasing Medicaid reimbursements, providing more federal money for nursing schools, and reducing long wait times for nurses to get their licenses to work. The demands of nurses and other medical personnel will also have to be examined to provide more flexibility, fair wages and more autonomy in the workplace.

“Nurses that are working now… have more power than they probably ever had before with regards to where they work, and in regards to how much they get paid,” Malara said.

This story was produced by the Gulf States Newsroom, a collaboration among Mississippi Public Broadcasting, WBHM in Alabama and WWNO and WRKF in Louisiana and NPR.

 

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