How this new law may (or may not) address rising healthcare staffing costs

How this new law may address rising healthcare staffing costs

The Senate is reviewing a law that should reduce expenditure for healthcare facilities. Though it is not a perfect solution, it is set to be “a step in the right direction.” This article goes over everything you need to know about these proposed changes.

Why have healthcare expenditures risen so much?

Temporary staffing rose to prominence during the course of the pandemic. Hospital spending for these per diem workers reached record heights, to combat both the ongoing nursing shortage and the rising healthcare costs. Though their services have been essential, contract labor expenditure in America, within this time, has risen to a staggering 250% over the last thre years. Because demand for temporary healthcare labor is so high, the temporary HCPs have to be compensated accordingly. This has put a number of hospitals in precarious financial situations, as they are made to give out these increasingly high rates if they want to maintain adequate staffing levels, or find short term solutions to staffing vacancies.

What changes does the proposed legislation present?

Senate Bill 149 was signed this August, and became enacted in October. From this point onwards, agencies are no longer allowed to schedule a temporary nurse for more than one assignment, to avoid bidding wars as a result of double bookings. In addition, agencies are no longer able to attribute COVID-19 or the flu as a reason why their rates have increased. In theory, this will control the temporary staffing market and ensure that the market can stay at a sustainable level.

Finally, the license has revoked the rights for nurses or nursing assistants to practice, if their license was revoked. As soon as January, nurses will be asked to register with the Office of Professional Licensure and Certification if they want to continue being able to practice. A fee will be charged, though the specific amount is yet to be disclosed.

How will this affect the healthcare market as a whole?

Facilities across the country still rely on these agencies to find HCPs who are well-trained, and prepared to contribute immediately. That being said, it is undeniable that the current laws will make healthcare agencies work with increased restrictions and fees. There should be an adjustment period, but on the whole temporary healthcare staffing is still in a good position.

The efficacy of this bill, with regards to stabilizing the costs of temporary healthcare, remains to be seen. Even if the rates were slightly lowered and double bookings were put under control, apps like VitaWerks provide a kind of workplace flexibility they cannot find anywhere else. Temporary HCPs can set their own schedules, pick and choose the shifts that best fit their needs and build the careers they want to create for themselves. The best way for facilities to keep pace is to stay competitive. Providing their full time employees with more professional flexibility and retention incentives could be the way to ensure there is a balance, between bringing onboard a host of temporary employees and having a strong base of full-time talent to work off of.

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