Spending on so-called “agency nurses,” nurses employed by for-profit nursing agencies whose services are contracted out to short-staffed public health care employers to fill temporary staffing needs, is out of control and expected to surpass $1.5 billion in Canada in the current fiscal year.
That’s not a typo. That’s billion with a B – as in $1,500,000,000 – according to a new study released this morning by the Canadian Federation of Nurses Unions on spending in Canada on agency nurses, also commonly known as travel nurses.
This troubling development is relatively new, the report by Queen’s University nursing professor Dr. Joan Almost points out – it represents a six-fold increase over only three years, shooting up from $247.9 million in 2020-2021.
Incomplete data from available sources shows spending on nursing agencies was at least $717.2 million in 2021-2022, and $1.2 billion in the 2022-2023 fiscal year, the report says. Dr. Almost, who is also a Registered Nurse, was unsurprisingly forced to rely on media stories and auditor general reports for much of the information she could get from some provinces, including Alberta.
In addition to long-term care facilities, the impact of this expensive reliance on agency nurses is felt most heavily in critical care units, emergency departments, and hospital medical units, Dr. Almost’s report says. It also hits rural hospitals hard.
The study projects that nearly 7.3 million agency nurse hours will be used in the 2023-2024 fiscal year in the seven provinces and territories where data was available. The report – entitled Opening the black box: Unpacking the use of nursing agencies in Canada – concludes that is the equivalent of 3,724 full-time nursing positions in Canadian communities. The true number is almost certainly higher.
Since the burgeoning nursing agency industry is virtually unregulated, there is almost no accountability for this vast spending on the more than 470 for-profit nursing agencies now operating in Canada – a number that is likely to continue to grow as public health employers are forced to rely even more on agency nurses to keep their wards operating.
Naturally, the private-sector companies profiting from this situation like it that way, and right-wing governments like the United Conservative Party in Alberta surely do too. It’s one way Canada’s health care system is being privatized by stealth.
The sudden and cripplingly expensive growth of nursing agencies comes against the backdrop of the aftermath of the COVID-19 pandemic, persistent disrespect of professional nurses in all designations by governments and employers, long hours, mandatory overtime, and pay that is not keeping up with inflation – factors that are all contributing to critical staffing shortages as nurses retire early, leave the profession, or switch to agency employment for higher salaries and more control over their lives.
Just how high those salaries are can be hard to pin down, because private companies are not accountable to the public, but anecdotal reports tell of employers being charged up to $300 per hour for nurses in hospital settings – not all of which, of course, goes to the agency nurse.
“While nursing shortages and deteriorating working conditions predate the pandemic, a tsunami has taken place across the country with many nurses deciding that they have had enough, spurring them to retire early, leave the public system, or leave the profession,” the report says.
Nursing agencies have been around for decades and serve a necessary role in the health care system, the report notes, but they “were never intended to fill a chronic nationwide full‐time nursing staff shortage, and the system cannot continue to accommodate this spending.”
So we now have a system in which employers plead poverty to keep staff nursing wages low while they are forced to pay far more to nursing agencies for staff they can no longer operate without.
Employers find themselves dealing with unexpected rate hikes by agencies and having to decide whether to pay up, leave units inadequately staffed, or cancel services, the report notes.
This heavy reliance on nursing agencies has undermined federal, provincial and territorial efforts to recruit and retain nurses throughout Canada, it says.
“While governments, employers and unions have been working to fix workplaces and solve the health care crisis, corporate stakeholders have been taking advantage of the hardship facing our health care system,” CFNU President Linda Silas said in a news release this morning. “We can’t allow this profiteering of the health care crisis to continue.”
Dr. Almost’s report recommends several responses to the heavy reliance on nursing agencies, and its harmful impact on health care costs, accountability and the growing staffing crisis, among them:
- Require public sector employers to publish and implement strategies to phase out use of agencies
- Establish government-run or non-profit services to provide temporary nurses and take the profit out of nurse staffing
- Have provincial and federal auditors general formally investigate of the costs of using nursing agencies
- Require public reporting by public health care employers of their use of agency nursing services and its cost, “adhering to a minimum data standard”
- Implement standardized procedures for procuring agency services that limit allowable costs and terms.
Thanks for shedding light on this, David. I am hoping some of the traditional media sources will pick up the story as well. (I strongly suspect some of them follow your blog for story ideas.)
Bob: This story got a lot of pickup from mainstream media, thanks to capable issues management by the CFNU. Not least among them was a story in the Globe and Mail, not very prominently placed in the website alas, and a full half hour on CBC’s The Current. It even persuaded one of those loathsome mini-Fraser institutes, this one in Montreal, to issue an embargoed press release yesterday, dated today, trying to piggy back on the CFNU’s report with it’s own far-right twist. Postmedia’s newspapers will likely give this non-report major spin today. DJC
Government logic: it’s better to spend a million dollars on a service (operating expense) rather than pay an employee $100,000 (plus benefits) a year. Of that $300/hour for a nurse, the nurse probably gets around $75 per hour. The rest goes the the government crony who runs the private company. I worked in information tech, the government has perfected the art of pay ten times more for a service rather than pay a motivated employee. This is what Alberta’s low information voters want.
This is the model of choice in all public services in this country. ‘cause entrepreneurs. Everyone of these operations built a better mousetrap. It’s just a coincidence that every single mousetrap consists of low-wages and no union representation.
The same process played out years ago in highway maintenance and construction. There were smallish private construction firms which were contracted to build larger highways. The Province and most municipalities had their own in-house road maintenance staff and equipment. Under Klein the fad for privatizing road maintenance took hold. Costs went up and the quality of service went down. The political/economic ecology of this which evolved included generous election donations to politicians who had privatized or were willing to further privatize the system, creating a positive feedback loop for privatization. And yes, there have been dead people because of profit-oriented road maintenance. Rinse and repeat with nursing staff.
Thank you DC. This is a serious problem, created by governments’ failure to focus on retention. Excellent recommendations from Dr Almost.
The UCP, much like Ralph Klein, wants private for profit healthcare, and private education in Alberta. They want to cater to one demographic, and leave everyone else behind.
Hello DJC and fellow commenters,
Unfortunately, this is not surprising as there have been a few articles in the press that have hinted that this was becoming a major issue. Nothing as detailed as the report by Dr. Almost, of course. This would fit right in with Danielle Smith’s preference for private health care that everyone pays for individually. I wonder if she actually understands the consequences of a private health care service that even she could not afford to pay for.
As I have mentioned previously, our neighbour and her daughter in Texas were in an auto collision and, after receiving some free and discounted services from the hospital where the neighbour worked, and their insurance payout, the remaining bill was $380,000, probably around $700,000 Canadian to-day.
How can we prevent the massive increase of health care costs created by privatization? We do not seem to have any way to control elected politicians’ decisions and policies which are often for the benefit of corporations and to the detriment to ordinary people.
On a related topic, here is the link to a Guardian article about ways very rich and powerful corporations are undermining democracy. https://www.theguardian.com/business/2024/sep/23/amazon-tesla-meta-climate-change-democracy
I looked to see how much Alberta spent in the report and no information was listed for the last few years. It would be really interesting if someone FOIP’d the UCP to get that information.
The Devin and Adriana show. Oh please.. https://youtu.be/_mW3jO0z1JM
Not only is understaffing requiring the use of agency nurses, but it’s also a boon for us frontline grunts who are able to pick up overtime. This ends up costing the taxpayer twice as much to do the same job, as the person sitting next to me. This has been the “RECORD SPENDING IN HEALTHCARE” the UCP loves to crow about, but to me it’s just outright mismanagement of the system. Worry not, I’m always sure to bring homemade cookies and buy coffees for my partner, to make up for the wage disparity.
Hello David and fellow commenters,
I seem to remember one article that said that some travel nurses received funding for travel, accommodation and some food/groceries, along with a generous salary. I don’t know if all of the agency nurses receive such generous benefits. Presumably, the agencies providing these nurses must take in a lot of money from various health care systems.
I think that I read, however, that the agency nurses do not have a pension plan.
Christiuna: This is basically correct, although agency nurses’ pay and benefits will vary from agency to agency, with levels of experience and training, and the type of facility in which they work. In addition to the benefits you reference, I have heard of agency nurses receiving car allowances, rental assistance, trips home, and so on. On the other hand, you are correct, they usually don’t receive a pension. DJC
My wife, being a nurse, knows other nurses that do contract agency work. Put it this way, depending on location, it is possible for some of these nurses to go hard for 6 months and then comfortably be able to take the rest of the year off. Can’t blame the ones who want to take these jobs, I guess….
FoF: I don’t think anyone can or should blame a nurse for taking an agency job which public sector employers treat nurses with so little respect – and, right now, respect does translate to money to a significant degree. But the answer is not more agency nurses costing taxpayers three times as much as their public sector employers, it’s a public sector that treats employees with respect, including their personal time, and pays them appropriately. In the long-term, doing things that way would cost less and work better. DJC
Agreed.