This report originally appeared in the December 2010 issue of DOTmed Business News

When hospitals are short-staffed, quality of patient care can be undermined. With the facility struggling to cope with a nursing shortage, being short-staffed is a common status for more and more hospitals. Therefore, it’s no surprise agencies that provide temporary nurses to health care facilities are becoming popular, largely to alleviate the burnout occurring among an overextended workforce.

Beginning in the 1970s, the traveling nurse industry peaked in the mid 2000s, to experience only a slight decline today, says Rob Simmons, client development manager with Travel Nurses Solution, an agency based in Birmingham, Ala. The slowdown is largely due to the high rate of unemployment; when the economy is poor, nurses hang onto their jobs and positions don’t open up, says Simmons.

On a short-term basis, temporary, traveling nurses are cost-effective for hospitals expanding or looking for permanent personnel. Assignments can last anywhere from four to 26 weeks, although some nurses stay on board for years.

“We have nurses in the company who have worked with a hospital for a couple of years,” says Simmons. “They keep extending their assignments.”

When a temporary nurse has been on assignment to a hospital for a long period of time, the recruitment and nursing management may become complacent. That complacency can lead to frustration among upper-management at the hospital, says Simmons.

Hospitals contracting traveling nurses pay agencies a flat rate, ranging from about $52 to $80 an hour. The rate includes the nurses’ services, housing, travel cost, salary and any other incurred costs.

But Simmons explains it’s hard to calculate cost-savings without looking at hospital reimbursements and the type of revenue a hospital may lose by not having a bed filled because it was short-staffed.

It’s not necessarily cheaper for a hospital to staff its facility with all contracted traveling nurses. The cost for one traveling nurse on a long-term basis comes out to be $6 to $10 more hourly than a permanent employee, taking into account salary, recruitment and retention, as well as benefits. This varies slightly depending on location and benefits.

“You’re looking at a difference of about $6 to $10, which is a good gap with hospitals operating on slim margins,” says Simmons. “But $6 to $10 can add up when you have about 20 temporary contracted staff in a hospital on a yearly basis.”

And when it’s time to cut costs, these types of contracted employees are usually the first to go, says Simmons.

“[Traveling nurses] are probably one of the top costs hospitals try to cut when looking at their budgets,” he says. “Any contracted staff paid a premium are usually the first to go, and that’s not necessarily a good thing. When you roll in your retention and your turnover and recruiting costs and benefits with the hourly rate [of contracted employees] you’re not far below what we would charge a hospital to send a contracted staff member in.”

And, Simmons points out, hospital administrators need to focus more on the revenue they can bring in by having a temporary nurse on staff.

“An administrator needs to ask themselves, does that travel nurse allow me an opportunity for additional reimbursement, and does that reimbursement justify the costs? Did the hospital have to redirect a patient due to inadequate staffing levels, and what was the potential loss of revenue not only short term but also long term?” Simmons says, explaining that a patient who was redirected to another hospital may continue to seek care from that hospital — a missed opportunity for the short-staffed facility.

In addition to the revenue patients bring in when a hospital is well-equipped, travel nurses help relieve staff nurses who are burnt out from being overworked. In the long-term, keeping nurses fresh and well-rested can help hospitals save costs.

“Staff burnout leads to high turnover,” says Simmons. “This turnover costs most hospitals hundreds of thousands a year. Lowering the nurse-to-patient ratio by utilizing temporary staff during peak census levels can help alleviate this burnout and decrease turnover costs.”

Now that reimbursements for hospitals will vary depending on the quality of care, overworked nurses can be detrimental to receiving optimum reimbursement rates.

View from the floor
Travel Nurses Solution’s Tina Fowler from South Carolina is based in a Virginia hospital’s pain clinic. She worked a yearlong assignment at the facility before taking a break and then returning, where she is currently serving a 13-week assignment. Fowler has been with Travel Nurses Solution, whose parent company is Jackson Healthcare, for seven years, and she often works just five to six months out of the year.

Fowler, an ICU nurse, enjoys the freedom she has working as a travel nurse. But the downside is being away from her husband and children, she says.

“The worst part is being away from home no doubt,” she says. “When I worked full time, I was working five nights a week [in 12-hours shifts]. When did my kids really see me anyway? They see me more now.”