Hospital Create Their Own Staffing Agencies to Save Money on Travel Nurses

Travel nurses work in short-staffed facilities all over the country while making more per hour than permanent employees. Hospitals that use their services end up spending exorbitant amounts of money on nurses and the agencies that provide the contracts. But some hospital systems are creating their own temporary staffing agencies to get around these costly fees.

Alex Scala got a pay raise when she recently became a travel nurse with Allegheny Health Network. She works on a team that rotates its time between the company’s 14 hospitals, mostly located in Pennsylvania. Scala says she still gets to travel around and learn new skills, but she likes not having to travel so far from home. She now commutes to work from her home in Butler, PA to hospitals across the western part of the state. “I can meet new people, learn new procedures, and how hospitals do different things,” Scala said.

Allegheny Health Network recently created an in-house staffing agency to deal with the ongoing staff shortage. The unit sends temporary workers to various facilities around the area just like a travel nurse staffing agency, but the company doesn’t have to worry about paying an outside agency. They pay the nurses directly for their work. 

Nurses in the program work either week-long or multi-week assignments before moving to another facility in the area. The nurses can schedule their own shifts and float around from unit to unit as needed. Some choose to work at a single hospital while others move throughout the state.

The move is designed to beat travel nurse agencies at their own game. The program provides added flexibility to nurses who like working at more than one facility while reducing the company’s dependence on expensive travel nurse agencies.

Temporary labor contracts in healthcare are now 500% higher than they were before the pandemic. That has put many hospital systems in the red over the last few years. Many travel nurse agencies have steadily raised their prices to score massive paydays, but the nurses usually only see a fraction of that money.

Allegheny Health Network says the temporary staffing units make up a small portion of their operations and that such programs likely wouldn’t be possible in smaller, more rural hospitals.

“There’s a huge shift in the evolution of healthcare in creating more staff who can move around,” said Daniel Hudson, vice president of nursing administration and operations at Jefferson Health in Philadelphia, which now has a staffing unit of 35 full-time workers.

During the height of the pandemic, travel nurses were making as much as $10,000 a week, and hospitals say these prices aren’t sustainable. However, the average pay for travel nurses has since dropped to $3,000 a week.

Piedmont Healthcare in Atlanta spent $20 million annually on nurses from outside staffing agencies. About a third of that money went directly to the agencies, not the nurses.

Now the company has its own temporary staffing agency. The freedom that comes with self-scheduling is a major draw for nurses, said Akin Demehin, senior director of quality and patient safety policy at the American Hospital Association.

However, nurses who participate in these programs won’t have the opportunity to travel across the country like they would with a national staffing agency. The opportunities tend to be limited to a confined geographic area.

Ryan Bannan and his wife, Bharvi Desai Bannan, both nurses, traveled the road for nearly two years working in different hospitals. “The advantages first and foremost were compensation,” he said.

But now they are looking to stay closer to home as they get ready to have their first baby. His wife currently works as an “internal travel nurse” with 13-week assignments in and around the Atlanta area.

Chris Eales of Premier Healthcare Professionals, a prominent outside staffing agency, said hospitals will need time to develop these programs. “Their success would very much depend on their ability to attract, recruit, and retain nurses,” Eales said. “They have to build up some credibility.”