Nursing Home Operators See ‘Uphill Battle’ in Moving Away From Staffing Agency Usage in 2022

To combat staffing shortages, states continue to deploy a wide range of tactics to boost recruitment, however, without better safeguards against price gouging staffing agencies operators fear care disruptions may continue. 

For some, working with staffing agencies has proven to be necessary.

Others like Wisconsin’s Bloomfield Healthcare and Rehabilitation Center closed its doors in part due to the prices the county paid to health care staffing agencies over the course of the pandemic.

At least according to the annual Skilled Nursing News outlook survey, however, widespread staffing agency usage is expected to continue in the skilled nursing space for the foreseeable future.

Be sure to download the report to see the full set of results — and where your organization stacks up against the crowd.

More than 200 SNN readers, the majority of whom are skilled nursing owners, responded to our online poll. Roughly 37.5% expected their organization to utilize staffing agencies more in 2022. Only 26.61% expected their organizations to utilize agencies less.

“We have a lot of irons in the fire so we’re trying to stay optimistic that our staffing issues will improve in 2022, but we’ve got an uphill battle for sure,” Quality Life Services Chief Administrative Officer Susie Tack Beardsley said. “We believe our only real hope to curb the insidious growth of staffing agencies is to address the issue of price gouging through legislation and regulation.”

She said that when the pandemic began she considered staffing agencies a fair and reasonable resource with stable rates.

“As the pandemic continued, agencies began to recognize the dependence many healthcare providers had developed and they capitalized on the situation,” she said.

Beardsley continues to see staffing agencies raise pay rates and pass those increases onto providers, though she’s hopeful “momentum” at both the state and federal level will move forward in 2022.

Price Gouging Regulations Haven’t Kept Pace

While 29 states currently have regulations and safeguards to prevent staff agency price gouging, Joseph DeMattos Jr., president and CEO of Health Facilities Association of Maryland, says one way he’s working to curb staffing agencies is by expanding those protections for nursing homes.

“There’ve been some unfortunate lessons learned over the course of the pandemic and one of them is that state price gouging laws across the country are designed for traditional emergencies and are focused on protecting consumers and business around commodities, such as gasoline at the pump,” he explained. “That’s true of Maryland emergency price gouging law, like in many states, our current law does not apply to services.”

In Pennsylvania, some agencies have offered wage hikes that can be two to four times the market average.

DeMattos Jr. said that he is working with the Maryland Attorney General’s Office and leaders of the state general assembly to work on a broader consumer protection update of the state’s anti-price gouging statute to include language relative to some service providers.

Last Resort Becomes Only Resort For Some

DeMattos Jr. said reviewing Medicare and Medicaid cost reports reveals how dependent the industry has become on staffing agencies.

He’s seen examples of skilled nursing and rehab centers in the state who prior to the pandemic had 1 or 2% reliance on staffing from agencies. At some point in 2021 or 2022 the reliance increased in the double digits and up to as much as 60%.

In Q3 2021 agency use was 5x what it was in 2019, on a per-patient-day basis, for one of the nation’s largest owners of skilled nursing facilities, Omega Healthcare Investors (NYSE: OHI) .

“It used to be that nursing homes and assisted living facilities would rely on agency staffing as a last resort, but now they are finding that their only option is to reach out to agencies,” said Christopher Laxton, Society for Post-Acute and Long-Term Care Medicine (AMDA) executive director.

Staffing shortages have had real consequences on nursing homes’ ability to care for residents with some restricting admissions, closing wings and facilities because they don’t have staff to accommodate, Laxton told SNN.

“We have seen pockets in Maryland where the reliance on agency staffing is decreasing,” DeMattos Jr. said. “It’s anybody’s guess on what the time that it will take to normalize staffing capacity in a traditional way. I suspect we’ll be focused on this for all of 2022 and much of the start of 2023.”