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Heated competition for nurses sparks incentive pay arms race

Granite State News Collaborative
Published: 11/6/2021 5:07:43 PM

Last month, hospitals across New Hampshire announced they were raising their wage floors as part of a “market adjustment” to stay competitive amid a labor shortage by offering a minimum $15 to $17 an hour.

But that’s only part of the story. Most registered nurses already get paid roughly twice as much as that, and third-party staffing agencies commissioned by local hospitals are now offering up to $200 an hour for travelling nurse rates.

Hospitals who wish to keep those nurses from working for the competition and fill their own staffing needs are often forced to match those rates, according to Associate Chief Nursing Officer Jennifer Torosian of Catholic Medical Center.

“And the staffers are saying ‘we can’t pass that up,’” Torosian said of the travelling nurse rates. “If we don’t fill the current staffing needs... then the staff is working short-staffed.”

Torosian said nurses are being offered work at hospitals only 30 minutes to an hour drive away.

While a nursing shortage preceded the pandemic, COVID-19 has accelerated the demand, causing a rapid shift in travelling nurse rates, and the frequency of offerings. Torosian said she remembers the pre-pandemic rates ranged from $105 to $125 an hour, and were deployed sparingly by staffing agencies. By 2020, the rates had jumped from $150 to $175, the higher end coming during case spikes in the fall and winter.

“I remember thinking ‘oh my gosh, $150 that’s a lot.’ Little did I know,” Torosian said.

The high rates are only temporary and ad hoc. Nurses who work on a per diem basis have more flexibility to take on those travelling nurse jobs, and fully employed nurses are enticed to pick up the extra hours at another hospital after completing their regular shift.

Steve Ahnen, the President and CEO of the New Hampshire Hospital Association said the high rates for travelling nurses are something that deserves more scrutiny from a “market conduct” perspective.

“I have to say the increase in those rates have been alarming,” Ahnen said.

Offering overtime rates, up to double-time and a half, has also become the norm. Torosian said it used to be offered on a case-by-case basis when the patient census went up. Now, she said it’s “pretty much constant.”

Raising the minimum wages in October primarily affected lower skilled workers like Licensed Nursing Assistants, Torosian said. As of May, Registered Nurses in New Hampshire earn an average $75,970 annually, or $36.52 per hour, according to the Bureau of Labor Statistics. The majority (80%) of RNs fall within a pay range of $55,160 to $101,400.

So when a staffing agency puts a travelling nurse rate on the table, hospitals are forced to temporarily give what is essentially about six times their normal pay to keep them. A nurse usually works a full 35-hour weekly shift before overtime and travel rates apply.

Torosian said they try to be proactive and fill shifts ahead of time, but that’s not always possible.

“There’s a point where no amount of money or incentive is going to get someone to work,” Torosian said.

She said hospitals also need to focus on softer incentives besides compensation to keep staff happy and employed. Too many shifts can result in burnout, and hospitals are more acutely aware of the limits of staff “resiliency.”

“What’s interesting, however, is that we’re hearing more and more (and this has been documented across health care) that financial incentives don’t matter like they used to,” CMC spokesperson Lauren Collins-Cline said in an email. “People are losing their resiliency and are looking for relief; from flexible schedules, to added support, and more resources in order to do their jobs.”

Some of that relief is coming in the form of lowering traditional barriers and creating new opportunities. What used to be a more rigid structure, with seniority steps and siloed departments, has become a more fluid and assuasive environment for new and veteran nurses alike, Torosian said.

While new nurses fresh out of school used to be relegated to night shifts and weekends, starting in medical surgical units and moving their way slowly to inpatient units and more favorable hours, they are now, through an accelerated certification program, offered the unit of their preference without being forced to work graveyard shifts, according to Torosian. And seasoned nurses are given the freedom to “float” from unit to unit in a support capacity.

Torosian said she often has to get creative, or just hang out with a staffer to make sure they feel appreciated.

“I’ll buy you Dunkin’ Donuts, I’ll buy you dinner,” she said.

Collins-Cline said CMC also gave its nurses COVID-19 recognition bonuses along with the recent pay raises.

Staff shortages are across the board in all levels and specialties in the healthcare industry, but nurses make up the largest segment of employed staff at CMC, with a plurality of 30%.

For Torosian and other nurse administrators, the shortage has changed their daily responsibilities. Staffing issues used to take up about 20% of their day, but Torosian said it’s now closer to about 80%. And some nurse leaders are taking on the less favorable shifts in order to fill the needs or have better shifts to offer staffers.

“We as leaders, it’s all hands on deck some days,” Torosian said.

The competition means hospitals are keeping a lot of these details close to the vest. Torosian said they couldn’t share what kinds of signing bonuses are being offered for new hires, but said those have increased recently.

Granite State News Collaborative also reached out to Dartmouth-Hitchcock Medical Center to see if they are facing similar decisions, but the hospital declined to comment for the story.

Dawn Fernald, spokesperson for SolutionHealth, which owns Southern New Hampshire Medical Center in Nashua and Elliot Hospital in Manchester said they are dealing with the same health worker shortage and pointed to the minimum pay raise to $17 per hour that went into effect last month.

“We have had to get a bit more creative to fill shifts, move patient care areas and we have worked hard to ensure competitive pay rates for all positions,” Fernald said.

She said they’ve also developed some “retention bonuses” and enhanced benefits for the most critical positions. New benefits include infertility coverage and other benefits to ensure they “remain competitive.”

Fernald declined to comment on the additional burdens placed on nurse administrators to staff shifts daily, or the escalating rates for travelling nurses.

“In many aspects we’re all competing against each other for the staff,” Torosian said.

The competition also extends into the long-term care facilities, which ironically creates a cycle of demand for more nurses at hospitals. Torosian said hospitals like CMC are hiring nurses from long-term care facilities, but because those facilities are often under-staffed, they can’t transfer patients out of the hospital into long-term care. And because the patients stay in the hospitals longer, the hospitals need more nurses to care for them.

Hospitalizations for COVID-19 have ramped up in recent weeks. As of Nov. 2, there were 190 patients hospitalized in the state for COVID. That statistic reached a peak of 220 as recently as Oct. 25, exceeding 200 for the first time since February.

Torosian fears the competition may reach a breaking point.

“We can keep throwing this money at staffing, but for how long?” Torosian said. “I think we need some statewide strategy and planning sessions on how we’re going to address this issue.”

Ahnen said nurses are critical to the work that hospitals do every day and hospitals are taking a multifaceted approach to adapt to the shortage.

“In some respects, it’s kind of the perfect storm,” Ahnen said.

He said hospitals in New Hampshire are reporting about an 11% vacancy rate for RNs as of July. That’s closer to 12 to 13% for OR and ER nurses, and nearly 16% for LNAs.

In the short term, hospitals might get some relief in the form of federal funds. About $25 billion nationwide has been freed up for hospitals (about $17 billion from the Provider Relief Fund of the CARES Act, and $8.5 billion from the American Rescue Plan Act (ARPA)) and hospitals had to apply before last week’s deadline to get that relief.

That will be used for staffing along with other hospital needs such as PPE, COVID testing, and vaccination. But the money for staffing won’t solve the larger problem, he said.

“Long term, there clearly needs to be some steps to help alleviate some of their shortage,” Ahnen said. “We’re gonna need more than just dollars.”

That’s because there’s still a limited pool to recruit from and the state isn’t making new nurses fast enough.

“You can’t wave a magic wand and create a doctor or a nurse overnight,” Ahnen said.

Ahnen said some regulatory changes and college programs with more teachers would speed up that process. New Hampshire hospitals also need to look outward.

In September, the state issued a Request for Proposal to offer a recruitment firm a three-year contract to attract healthcare workers from out of state. Bids are due by Nov. 18.

Torosian said CMC is also starting to recruit international nurses.

For now, hospitals like CMC are throwing lots of money at their workforce needs. Collins-Cline said there isn’t a specific coffer of their operating budget set aside for staffing, but doesn’t believe it can last like this forever. Torosian agrees.

“I do not believe it’s sustainable,” Torosian said. “Although I do not have a specific number. But I don’t see how it could be.”

These articles are being shared by partners in The Granite State News Collaborative. For more information, visit collaborativenh.org.


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