New law may help, but won’t solve, NH health facilities’ rising staffing costs
SB 149 seeks to set limits on staffing agency practices, fees
Hiring has become an emergency-level math dilemma for David Ross and the 120 people waiting for a bed at the Hillsborough County Nursing Home.
Ross, the home’s administrator, can’t recruit enough nurses and LNAs with the hourly wages offered by the county. That’s forced him to rely on staffing agencies, which charge the county more than double that hourly rate to put temporary workers in those positions. Unable to afford to fill all openings, Ross has had to close 50 of the home’s 300 beds.
“We couldn’t fill the 100 (vacant) positions with agency staff without overburdening the taxpayers,” said Ross. “Having those 50 beds would not solve the waitlist, but it would certainly help 50 people.”
Hospitals, nursing homes, and other medical facilities were using temporary workers, typically for 13-week shifts, before Covid-19 hit. Their dependence on those workers increased dramatically early into the pandemic when nurses and LNAs left their jobs just as demand for health care spiked.
“It’s unsustainable, and we have got to find a way to solve it,” said Steve Ahnen, president of the New Hampshire Hospital Association, which reported that hospitals saw the cost of contract labor climb 133 percent between 2021 and 2022.
Senate Bill 149, signed last week, is intended to be a step toward a solution. It does not cap what staffing agencies can charge, as other states have considered, but it does set limits on their practices with the goal of controlling costs.
Beginning in October, nurse staffing agencies will be prohibited from simultaneously scheduling a nurse or LNA for more than one assignment, a measure intended to stop the double bookings that allow agencies to pressure medical facilities into bidding wars.
Agencies will no longer be able to use the presence of a communicable virus, such as Covid-19 or the flu, as justification for increasing facilities’ fees. They will be barred from recruiting within the facilities that have hired them, a practice that has included offering agency workers referral bonuses.
The law also forbids agencies from placing nurses or LNAs in facilities if their professional license has been suspended. And, come Jan. 1, nurse staffing agencies will have to register with the state Office of Professional Licensure and Certification and pay a yet-to-be-determined fee. Violating the new requirements could cost agencies their license to operate.
The new law, however, will not require staffing agencies to make public how much they are charging health facilities or how much of that they are paying workers, as proposed in the original version. Knowing the latter would give administrators like Ross a better sense of how much they’d have to increase wages to be competitive.
That’s because the Department of Health and Human Services and staffing agencies said it would be overly burdensome and costly to comply with the requirement. The compromise was better than nothing, health care leaders said.
“It’s a start to at least have them on our radar and have them register as an agency like the rest of (health care facilities) have to do,” said Tom Blonski, president and CEO of Catholic Charities, which has more than 100 nursing positions open among its seven sites. He said his organization has seen its agency staffing costs go from under $3 million before the pandemic to more than $10 million. “That’s not sustainable,” Blonski said.
According to AARP, the state’s nursing homes had a 40.6 percent vacancy rate among nurses and aides as of April, more than twice the national average of 19 percent. Brendan Williams, president and CEO of the New Hampshire Health Care Association, which represents long-term care providers, is concerned that the shortage would get worse under President Joe Biden’s proposed minimum staffing requirements among nursing homes.
The existing staffing shortages have had consequences for residents who need care, health care leaders said.
Ross said that as of July 23, the Centers for Medicare and Medicaid Services reported the occupancy rate among the state’s nursing homes averaged 81 percent – even as some homes have waitlists.
Williams said he’s concerned Biden’s proposal will drive up staffing costs without meeting the administration’s goal of increasing the quality of care. The Centers for Medicare and Medicaid is still reviewing the proposed rule, but the agency has previously recommended a minimum of 4.1 hours of direct care per resident per day, a standard KFF determined fewer than one-third of nursing homes could meet, according to a January analysis,
“No matter what you raise your wages to, the agencies will simply charge you more and we can’t get the transparency element to require them to tell us how much of that goes to workers,” Williams said. “It’s absolutely not all of what they charge, but . . . they can continue to inch ahead of what providers can pay. That makes them continue to be more attractive to workers.”
Ross said the Hillsborough County Nursing Home starts its LNAs at between $19.30 and $30.17 an hour. The staffing agencies are charging the county between $38 and $65 an hour to staff those openings. Ross said he has no way of knowing how much more agencies are paying staff compared to the county’s wages.
Blonski said he has lost workers just as their shifts started because an agency double-booked them and sent them to the facility that would pay $5 more an hour. He’s hopeful the new law will stop that practice.
“It’s a matter of integrity. It’s a matter of doing the right thing,” Blonski said. “It’s a matter of not exploiting the system.”
While the law will help control some costs, Blonski said the rising costs of contracted labor may be an incentive for facilities to rethink recruitment and retention.
“How flexible can we be with our schedule?” he said. “How creative can we be with our pay structure? Are we offering long-term retention bonuses? What are we doing in creating a . . . culture that (potential employees) want to be part of, that values them?”
Sen. Cindy Rosenwald, the new law’s prime sponsor, said she’s hoping the state’s broader efforts to recruit more medical workers, make housing more affordable, and expand access to child care will also help.
“If we use the tools we have to incentivize new health workers to stay in New Hampshire, chances are they are going to love it and put down roots here,” she said. “But they have to afford to live here.”
This story was originally produced by the New Hampshire Bulletin, an independent local newsroom that allows NH Business Review and other outlets to republish its reporting.