Travel nurses cost GMH $20M

AN INCREASED DEMAND: Nurses are seen preparing for more rounds of testing at the old carnival grounds in Tiyan on Aug. 20. COVID-19 has led to an increased demand for nurses across the nation. With that demand, Guam Memorial Hospital has been forced to take on travel nurses to alleviate the burden for island staff. Haruo Simion/The Guam Daily Post

The Guam Memorial Hospital Authority has spent about $20.2 million on travel nurses during the COVID-19 pandemic.

Even when divided over the last two years, that figure is still more per year than the $8 million in local personnel costs the hospital saw in August, which is a $1.2 million increase from costs at the beginning of the pandemic.

Fortunately, a little more than half, about $10.5 million, of the hospital's expenses for travel nurses has been reimbursed by the federal government, and the Federal Emergency Management Agency has indicated that more expenses for nurses and other travel staff may be reimbursable. GMHA is working on a grant for that purpose, so that money can be spent elsewhere at the hospital.

But the exorbitant costs for travel nurses, which can be even higher in other U.S. jurisdictions, has highlighted the demand for medical staff that COVID-19 has placed on Guam and the nation, as well as having raised questions about potential exploitation.

GMHA has about 40 travel staff, of which about 32 are nurses. Ten of the nurses are with the Medical Solutions company and 22 are with NuWest. The hospital authority has also approved 30 more travel staff but their arrival isn't guaranteed as individuals sometimes back out or refuse offers, according to Mai Habib, GMHA public information officer. 

28% jump in hourly cost

At a GMHA board meeting in late September, hospital Administrator Lillian Perez-Posadas said GMHA agreed to bump up the rate for travel nurses to $225 per hour, from a previously agreed $175 hourly rate reported the month prior. 

"FEMA has assured us that they will reimburse the hospital 100%. So we've got about 20 to 25 nurses that we have requested. Some of them have already started this week. Some will be coming in next week and also throughout October," Perez-Posadas said.

GMHA employs about 300 local nurses. The starting rate for a local registered nurse at the hospital ranges between $20 and $30 per hour, plus any overtime and differential pay, according to information Habib provided.

The rate for travel nurses is certainly more significant compared to their local counterparts but that is the rate paid to the agency, which includes agency fees, travel costs, accommodations and other fees.

And the reason the hospital authority agreed to a 28% increase is because of demand, Habib said.

"GMHA has had to raise the rate of travel nurses in order to compete with the massive demand nationwide and the dwindling supply of nurses," she said. "GMHA needs these nurses to supplement our staff in this COVID-surge. All the incredible nursing staff at GMHA are going above and beyond for our patients, flexing in every way to meet the increased pressure on the hospital. However, we still need travelers to support our staff, as the community continues seeing a rise in virus cases and more acutely sick individuals."

FTC probe requested

There is no doubt that COVID-19 has increased the demand for travel nurses, but that has also raised an eye to the rates staffing companies charge. Moreover, these temporary positions are proving attractive for nurses in the country, contributing to the staffing crisis among U.S. hospitals.

In February, the American Hospital Association requested the Federal Trade Commission investigate reports of anticompetitive pricing by nurse staffing agencies in addition to looking into the conduct of major health insurance companies that were reportedly impacting patients and hospitals.

"The AHA has received reports from hospitals across the nation that nurse-staffing agencies ... are engaged in anticompetitive pricing," the letter stated. "A Jan. 23 Modern Healthcare article confirmed that the demand these agencies are seeing for travel nurses is 'unprecedented in their company histories.' While many hospitals were reluctant to supply Modern Healthcare with information on the enormous rate hikes from these agencies for fear of retribution, the article reported that rates for travel nurses in some instances had tripled."

In mid-September, the California Hospital Association requested its state attorney general investigate rates at staffing agencies. And in a separate letter, the CHA implored the California Health and Human Services Agency to take immediate actions in response to their circumstances.

"At the same time the availability of these temporary staff has dramatically declined, the cost has skyrocketed. In January 2021, the maximum amount the state would pay a staffing agency for contracted staff was $200/hour. Staffing agencies are now quoting hospitals at $300/hour - a more than 50% increase in less than a year," the CHA letter to the CHHSA stated. 

GMHA Vice Chairwoman Melissa Waibel brought up the situation in California this past board meeting, and noted that it warrants watching.

"It is," Perez-Posadas said. She added that FEMA officials who visited the island in September said that they are "very much aware" of the bill rates in the nation.

"Yes, we're all kind of like, 'Oh my gosh, is this price gouging?'" Perez-Posadas said about the rates discussed with federal officials. 

The hospital also employs a traveling respiratory therapist at $155 per hour and two traveling radiologic technologists at $84 per hour, both from Medical Solutions, in addition to the nurses.

These rates have stayed relatively the same as the hospital has mostly seen spikes in the nurses' fees, according to Habib. 

Local personnel costs on rise

The hospital authority's personnel costs in March 2020 was about $6.8 million.

Since then, GMHA has added nearly 100 more local nurses to the staff. Nurse pay has also increased, and there is various differential pay. For example, during the September board meeting, GMHA trustees voted to extend a 25% working differential to employees certified or licensed in medical laboratory science and respiratory therapy, in a bid to support current staff and be more competitive. This is expected to add $450,000 per year in costs. 

"Additionally, we've had to add more facilities maintenance staff, housekeeping (environmental services) and security to meet the needs of COVID-19 in our hospital. These additional costs are very much reflective of the added COVID-related duties," Habib said.

"It's hard to project how much these costs could come down in the future, as there seems to be no immediate end to the COVID surges in our community," she said.

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