Temporary Nursing Home Staff Are More Common Now, Increasing Labor Costs and Decreasing Care Quality: Study

Nursing homes have been increasingly relying on temporary staffing agency workers since the COVID-19 pandemic, which not only increases labor costs across the industry, but also may be associated with lower quality of care that increases the risk of nursing home negligence, according to the findings of a new study.

Traditionally, independent staffing agencies have been used to fill temporary staffing gaps at nursing homes, such as when employees call out sick or takes vacation. However, facilities rarely relied on them prior to the start of the COVID-pandemic.

According to a new report published in the medical journal Health Affairs, nearly half of all nursing homes in the United States now rely on temp staffing agency workers, and facilities that use the services typically have lower quality of care ratings.

Approximately 8.4% of the nursing home workforce left the industry between 2019 and 2020, leading to more than one in three nursing homes experiencing staff shortages before the COVID-19 public health emergency officially ended on May 11, 2023.

Although temp nursing staff have been used to address the shortages of qualified nurses, researchers point out that high rates of high nursing staff turnover is known to lower the quality care provided to residents, and these expensive temporary workers are less familiar with facility policies and resident care needs.

Understaffed Nursing Home Risks

Recent research has shown insufficient nursing home staffing and frequent turnover reduces the quality of care patients receive, and may increase the risk of injuries. Researchers indicate even a 10% increase in staff turnover can decrease the quality of care patients receive and reduce their functioning.

An investigation led by a panel of U.S. lawmakers indicated that shortages of nurses and certified nursing aides (CNAs) in nursing homes was a major contributing factor of COVID-19 deaths and poor health outcomes for residents during the pandemic. The Government Accountability Office found that more than 200,000 nursing home deaths were reported throughout the course of the pandemic, due to poor quality of care and neglect from insufficient staffing.

A study conducted by the American Health Care Association (AHCA) revealed that more than 73% of U.S. nursing homes reported they were at risk of closing due to insufficient staffing stemming from the COVID-19 pandemic. The study also found that approximately 60% of the participating nursing homes reported moderate or high staff shortages, and at least 98% reported difficulty hiring staff.

Temporary Worker Reliance Impacting Nursing Home Care

In this new study, researchers from Miami University in Ohio, Georgia Southern University in Georgia, University of Texas Medical Branch in Texas, and Harvard University in Massachusetts analyzed data from the Payroll-Based Journal (PBJ), which includes daily worked hours and whether the worker was employed by a staffing agency or directly by a nursing home.

Researchers also examined data from the Nursing Home Compare Archive, which included care ratings for facilities and Medicare Cost Reports, including the labor costs for nursing home employees between 2018 and 2022.

According to the data, researchers found 22.5% of U.S. nursing facilities used agency staff for direct care between 2018 and 2019, with 7.1% using staffing agency registered nurses, 12.1% using agency licensed practical nurses, and 16.2% using agency nursing aides. Amid the pandemic, use of temps increased to 49.1% in 2022, with 17.8% using agency registered nurses, 31.9% using agency licensed practical nurses, and 40% using agency nurse aides.

Researchers saw the greatest increase of temporary staff use in Vermont, New York, Maryland, and Pennsylvania, with more than 70% of nursing homes across those states reporting use of temporary agency workers. Meanwhile, less than 30% of facilities in Oklahoma, Alabama, Washington, D.C., and Arkansas used agency staff for direct care. Temporary agency staff accounted for more than 20% of direct care nursing staff hours worked in Vermont, Montana, and Maine facilities in 2022, the researchers found.

Agency staff accounted for 3.2% of nursing home staff between 2018 and 2019, but jumped to 11% by 2022, according to the data. About 44.7% of nursing homes used agency staff for 90 days or less in 2018, with 5.7% using agency staff every day, but 13.8% used them for ninety days or less by 2022.

Between 2018 and 2022, nursing home labor costs increased by 23.5% for registered nurses, 29.3% for licensed practical nurses, and 37.6% for nurse aides, researchers determined. However, labor costs for temporary agency workers increased at a slightly faster rate than for directly employed workers during the same period, with a 28.5% increase for registered nurses, 34% increase for licensed practical nurses, and 40.1% increased cost for temporary nurse aides.

Temp Nursing Staff May Increase Risk of Nursing Home Injuries

The data indicates registered nurses from staff agencies cost $17.20 more an hour than a directly employed registered nurse cost in 2018, and increased to $23.93 more an hour in 2022. During that period, the hourly labor cost to use agency staff compared to directly employed staff was 50% higher for registered nurses, 57% higher for practical nurses, and 66% higher for nurse aides.

Researchers compared quality care ratings among nursing homes and found that those care facilities that used staffing agency workers had lower health inspection ratings and lower average ratings overall. While they indicate more research is needed to consider how agency staff use has impacted quality of direct care, the findings may suggest the costly labor expenses of hiring temporary employees, as well as the unfamiliarity of patient needs, may result in poorer care quality.

“Before the pandemic, most nursing homes did not rely on agency staff. Since the pandemic, the use of agency staff has become more common; it is more expensive and may be associated with lower-quality care,” the researchers concluded. “Given the recent push to implement more stringent nursing home oversight, including proposed regulations that would increase nurse staffing levels, our findings suggest that policy makers need to consider the recent increased use of agency staff and their higher labor costs.”