Nursing Homes Cut Back On Use Of Temporary Caregivers

Several areas nursing home companies, driven by cost concerns and the desire to foster a more permanent nursing staff, are reducing the number of supplemental “pool” nurses that they hire.

Such nurses – hired from employment agencies or independent contractors – cost operators an average of $2 to $3 more per hour per person than staff rates. And while nursing homes receive a fixed-sum reimbursement from the state to help cover their labor costs, any amount that exceeds those set rates must be paid for by the homes themselves. One industry official said that 60 percent to 75 percent of nursing homes’ resources goes toward salaries and benefits for staff.

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$14 to $16 Per Hour for Pool Work

Cost benefits aside, nursing home officials want to shift away from pool employees in order to create a more stable environment for residents.

“When you’re using temporary help or temporary agencies, obviously [pools] don’t contribute to that,” said Thomas Boerboom, vice president of Beverly Enterprises Inc., the largest operator, and owner of long-term care facilities in Minnesota. Beverly has reduced its use of pool nurses by 60 percent to 70 percent since the beginning of the year, Boerboom said.

Two other large long-term care organizations, Good Neighbor Services Inc. in St. Paul and the Ebenezer Society in Minneapolis, have taken similar steps, including starting their own pools of staff nurses. When the companies’ nurses aren’t working at one of their own facilities, Ebenezer and Good Neighbor have the option of hiring them out elsewhere.

In order to bolster their staff, however, all of the companies have had to deal with the high demand for nurses. Beverly has sweetened its benefits package in order to attract employees. Good Neighbor and Ebenezer have hired recruiters in the last year and devised tuition-paying and loan programs to encourage certified nursing assistants (CNAs) already on staff to become registered nurses (RNs) or licensed practical nurses (LPNs). Those employees must, in turn, agree to stay at the company for a specified time.

Meanwhile, the agencies that supply temporary nurses have started to react to dwindling demand for their workers. Many are stepping up efforts to sign contracts with nursing home operators.

Donna Liveringhouse, co-owner of All Temporaries Inc., a traditional pool company in Minneapolis, said she has held off raising the rates she charges nursing homes for two years – while increasing pay for her nurses – in order to compete with independent contractors. She said that might change this year because she can’t afford to continue the strategy.

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Brushing Up on their Sales Techniques

Companion Home Health Care Inc., a 4-year-old agency in New Hope, recently hired its first general manager to oversee marketing, among other functions. “Our marketing wasn’t perhaps as aggressive as other folks’, and before we wanted to take a low silhouette and not put pressure on people,” said Fred Hartlage, vice president of the company.

Traditional pool companies, which hire nurses as their own employees and then contract them out, also are finding their business squeezed by independent contractors – companies that arrange for nurses and CNAs to work but do not bring them on as employees.

About four years ago, both RNs and LPNs were in short supply nationwide and business was brisk for nursing pool companies. But since then the number of independent contractors in the Twin Cities has exploded from about two to about 14 today.

“Four years ago, [pool use] was the highest that it’s ever been, and that’s why all these people jumped into it,” Liveringhouse said. “You couldn’t fill up half of the hours that nursing homes asked for.”

Liveringhouse said that during the boom years, it was not uncommon for her firm to have 125 nurses and CNAs hired out at any given time. Now she has about 40, and that signals one of the key problems that independent contractors have caused for pool firms.

“It’s not the business they’re taking away, it’s the employees,” she said.

Because they have lower overhead, independent contractors can offer nurses about $2 to $3 more an hour than the pool companies, according to Liveringhouse. Since they don’t bring nurses on as employees, independents don’t have to pay social security, pension benefits and unemployment taxes on the nurses that they send out. Added Hartlage of Companion Care, “Independent contractors have a 25 percent price advantage over pools.”

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Despite the fact that independents can offer higher pay, Liveringhouse said, pools have an advantage because of the benefits and taxes they pay.

But a spokeswoman with one of the oldest independent contractors in the Twin Cities, Temp Network Inc. in Minneapolis, said the company has been upgrading the services it offers employees in recent years. “Originally, Temp Network did not provide benefits or liability insurance. Today we offer, just as a standard, workman’s compensation and general liability insurance for all people,” said Carol Lynn Wacker, assistant manager of the firm.

Temp Network also recently branched into the traditional pool area. The company formed Help Network Inc. as a response to nurses who wanted employee status, and to nursing homes not comfortable working through an independent contractor.

Independents are battling what they call an incorrect perception that pool nurses are more dependable because the agency screens more carefully along with having the authority to fire them. The liability insurance most pools provide also is a selling point.

Nevertheless, Wacker said, “more than 90 percent of our business goes with Temp Network.”

While there is occasional friction between independent contractors and traditional pools, the relations are much more stormy between nursing home operators and the nursing pool industry as a whole. Some states, such as Massachusetts, have passed laws putting a ceiling on the rates that pool companies can charge long-term care facilities. Other states, including Missouri, Louisiana, and Washington, have debated the issue.

The subject of a rate cap apparently has not been broached in Minnesota, although some nursing home operators would like to see that changed.

Regardless of the debate, nursing homes don’t appear to be headed to a total phaseout of temporary help. Of the large companies, Beverly has the least dependence, with less than 1 percent of its statewide nursing staff drawn from pools after this year’s steady cutbacks. Other companies, such as Good Neighbor, still use pool nurses to fill about 40 percent of their shifts.

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