Some nursing homes aren’t accepting new patients due to staffing shortages. A new study examines the costs and suggests contingent staffing could be a more affordable remedy than some expect.
Nursing homes have dealt with staffing issues for years, but the COVID-19 pandemic has only worsened the situation.
With nursing homes and other long-term care facilities dealing with more vacancies, they’re not taking as many patients. With fewer patients, those facilities are seeing less revenue.
A new study released Thursday projects the lack of staffing could cost the post-acute care industry $19.5 billion in unrealized revenue in 2022. The study was commissioned by IntelyCare, a tech-powered nurse staffing firm. Oliver Wyman, a management consulting firm, conducted the study.
The study argues that contingent staffing could be a more affordable option to fill vacancies than some healthcare leaders think.
David Coppins, president and CEO of IntelyCare, said health leaders see the higher wages for contingency staffers, but they don’t consider the other costs they pay their employees, such as recruiting, training, health benefits and retirement plans.
Factoring in those costs, Coppins said, “You get pretty close to what it is that we’re actually charging.”
“If you can get comfortable with that idea, you’re not paying a ton more, and if you have any costs in training and development, you might be saving money or at the very least break even.”
The study found that full-time employees actually cost facilities 1.9 to 2.2 times their hourly wages. The report contends that filling shifts with a full-time registered nurse is 33% higher than the cost of utilizing contingent labor. Organizations spend 26% more on full-time nursing assistants, compared to contingent labor, according to the report. The study examined industry data from Mercer, a human resources consulting firm.
This is the first time IntelyCare has commissioned a study like this, and Coppins said he wasn’t sure what to expect. “I hoped we weren’t terribly more expensive,” he said.
Coppins said he was at a recent gathering of skilled nursing facility leaders. One leader described keeping the census of residents at a little more than 70%, because the firm wanted to hire its own workers and opted against contingency staffing.
Another leader talked about how the use of contingency staffing helped that organization boost census counts higher than pre-pandemic levels, helping their operating margins.
Nursing homes and other healthcare providers have blasted the wages charged by staffing agencies.
In January, the American Hospital Association and the American Health Care Association/National Center for Assisted Living wrote a joint letter to the White House, complaining that some agencies are charging two or three times pre-pandemic rates. They asked the government to investigate the pricing practices of the agencies.
Nursing homes have endured tremendous financial pressures, and Coppins said he understands the industry’s challenges.
Since skilled nursing facilities rely on government funding, nursing homes can’t simply raise rates like other healthcare organizations. He also said the federal government should offer more financial support so nursing homes can improve their staffing.
Coppins said some nursing homes are unfairly blaming their troubles on the rates for staffing agencies, particularly since they are losing revenue by operating at lower occupancy levels. He said some in the skilled nursing facility industry are being “economically irrational.”
“The facilities will say they can’t get workers, but they could,” he said. “They’re just making a choice.”
The lack of available beds in nursing homes is hampering hospitals as well. When COVID-19 cases and hospitalizations peaked this winter, some hospital leaders said their problems were compounded because they had some patients who were ready to be discharged to a nursing home or rehabilitation facility, but there weren’t any beds available.
“Families are finding it difficult to find a place for their loved one,” Coppins said. Some hospitals “cannot send their patients in a post-acute environment to a skilled nursing facility,” he added.
Nurses who work in many long-term care facilities are also dealing with a “devilish negative cycle,” because they are overworked and understaffed. And if nursing homes are routinely asking nurses to work with smaller staffers or endure longer hours, they could lose more nurses, making staffing worse.
“You’re substantially overworked even if you work a single shift,” Coppins said. “It absolutely leads to burnout.”
Coppins expected to see a reduction in demand for nurses as COVID-19 cases subsided, but he hopes to see more nursing homes and other long-term care facilities turn to contingent nurses. He argues nursing homes that do so will serve their residents better and improve their financial picture.
“There are facilities that get it,” he said. “They need these people. If they didn’t have them, they would be in trouble themselves.”