In response to the article published in McKnight’s on September 11, 2023, titled “Profiteering by Nursing Agencies Predicted as Providers Weigh Staffing Mandate,” I feel compelled to provide an alternative point of view and defend nursing agencies, who were portrayed as profiteering hostage takers, akin to modern day pirates. This is simply inaccurate and misleading.
As a representative of a nursing agency, we resonate with the growing apprehensions regarding the potentially adverse impacts of the proposed staffing mandate for nursing home operators. We are acutely aware that our partners are already struggling to stay afloat. And we understand that if our customers go out of business, we go out of business, too.
Nevertheless, it is critical to delineate a distinction between nursing agencies, which predominantly function as vital allies in healthcare operations, from tech-driven staffing platforms that have engaged in price inflation and monopolistic behaviors.
Dispelling myth one: All agencies are alike
In the evolving landscape of the staffing industry, it’s crucial to differentiate between traditional staffing agencies – entities that have forged valuable partnerships with skilled nursing facilities for years – and the burgeoning tech platforms keen on market disruption rather than service.
It is unjust to paint agencies, which often step in during crises, with the same brush as these new market entrants. The agency I founded was born out providing a service requested by skilled nursing facilities. We exist to ensure facilities have the staff they need so that residents receive the care they deserve.
Our agency provides a concierge service, tailoring staffing solutions for each facility’s unique circumstance. We hold our nurses to a high level of accountability and work directly with facility decision-makers to ensure the highest level of reliability and consistency. Claiming all agencies are profiteering or jeopardize care is as misleading as saying all nursing home operators are profit-driven and cut corners on care.
This leads us to another widespread misconception.
Dispelling myth two: The profiteering agenda of all agencies
The old adage that one “bad apple spoils the bunch” seems fitting here.
Unfortunately, a few opportunistic players used the pandemic to upend the labor market. These tech-centric firms have developed platforms and algorithms that undermine the established trust and collaboration that has been a hallmark of staffing agencies and healthcare facilities.
Many new platforms, particularly those fueled by venture capital, adopt strategies reminiscent of companies like Uber and Lyft. We all know how these platforms upended the taxi industry and most of us have used these apps and benefited from them. It’s easy to point to the technology itself as the reason they have been so successful in capturing market share.
But the truth is that both companies use a common Silicon Valley playbook — take a financial loss in order to gain substantial market share in the future. Then, when you control the market, you can increase the price. This is only possible with substantial financial backing.
Many of the tech companies with staffing apps follow this blueprint. By promising higher pay and greater flexibility, they lure staff away from both operators and staffing agencies alike, intending to monopolize the labor market.
This contrasts starkly with agencies like ours, which aim to stabilize it.
Dispelling myth three: The higher costs of agency staff
Regarding the federal staffing mandate, the McKnight’s article reports that “many facilities said they will be forced to bring in agency staff to comply, ultimately paying more to fill the same jobs. They expect agencies to continue ratcheting up pay to attract even more temporary staff, then pass those increases right back to nursing homes that rely on taxpayer funding.”
In actuality, outside of the tech-based staffing platforms, most staffing agencies are not large enough to influence the labor market. There is so much competition in the staffing industry that most agencies are price takers, not price setters, when it comes to negotiating rates with facilities.
Additionally, partnering with an agency like ours can often be more economical than employing full-time staff, considering the hidden costs involved in hiring and benefits.
For example, according to the 2023-2024 HCS Nursing Home Salary & Benefits Report published by Hospital & Healthcare Compensation Service (HCS), the national hourly pay for a CNA is nearly $19.00. With an estimated 30% added for the cost of taxes, insurance, benefits along with the hidden costs of recruiting, hiring, and training (not to mention sign on bonuses and other recruitment strategies), the true hourly cost incurred by a nursing home is closer to $26.00. And if you are paying overtime, then the true cost balloons to $39.00 an hour.
If nursing home operators are paying rates for contingent staff higher than what they are paying their own staff, criticism should be directed towards tech platforms that inflate costs, not traditional agencies aiming to provide balanced solutions.
Reframing the agency narrative
The current negative perception surrounding agencies— often fueled by marketing smoke-and-mirrors campaigns by tech platforms (ie. “Normalize saying agency sucks”) – is misleading and unjust.
Whereas we used to be celebrated by our partner nursing home operators, ‘agency’ has become a four-letter word. We experience collateral damage by the bad reputation others have created. Our agency, like most independent agencies, views itself as a partner in a symbiotic relationship with providers.
Many clients regard our services as an extension of their staff, appreciating our emergency assistance. Our staff gets to know the staff at facilities on a personal basis. It’s high time we rectify the tarnished reputation inflicted by a few and recognize the constructive role played by agencies in the industry.
The truth is we are just as frustrated with the damage tech companies have caused in our industry. All staffing agencies, however, should not be lumped into the same category as them.
Staffing app-platforms deserve to be in the crosshairs, not staffing agencies writ large.
Navigating the turbulent waters together
In truth, both operators and staffing agencies are sailing in the same boat, navigating the same rough seas and striving to keep their operations afloat. As highlighted in another recent article in McKnight’s, the choice between accruing debt for sustaining operations or shutting down is a real dilemma faced by many agencies.
Tech platforms seek 100% control of the workforce so they can be price-setters. We are price-takers, responding to the broader dynamic of the market. No agency has the power to tilt the board in their favor; only the new tech companies have the power to control the labor market.
Operators and independent staffing agencies should be united, not opposed, in their effort to re-stabilize the labor market.
Fostering productive staffing partnerships
Established in 2016 as a branch of a seasoned home healthcare enterprise, our agency has built a strong reputation in the North Texas market as a reliable partner in stabilizing staffing crises at various facilities. We pride ourselves on offering transparent and fair prices, a commitment that remained unshaken during the pandemic.
Our commitment extends beyond financial gains, focusing on fostering relationships and crafting solutions that prioritize the well-being of operators and their residents. We are here to supplement, not supplant, existing staff, emphasizing a collaborative approach that serves the best interests of the industry.
We develop and utilize technology to empower our work, never to give it power over the way we work.
We are a nurse agency. We provide staffing solutions to ensure someone’s loved one has the care they need and deserve. And that’s something we can be proud about.
Jaime Tall is the Co-Founder and COO of DirectCare Shifts, an agency that aims to eliminate workforce chaos in the healthcare industry by combining innovative technology, strategic partnerships, and best-in-class customer service.
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