The Hidden Price of Healthcare Staffing

Healthcare staffing has become one of the most expensive pressure points in an industry already struggling to control costs. According to Health Affairs, nearly half of U.S. nursing homes used agency nursing staff by 2022, up from 23 percent in 2018, while agency workers accounted for 11 percent of direct-care nursing hours.

The economics are difficult to ignore. Research published in Health Affairs also found that agency nurses cost nursing homes 50 to 60 percent more per hour than directly employed nurses. Federal data likewise characterized contract staffing as an important but costly response to persistent workforce shortages.

Demand for qualified healthcare workers is unlikely to ease quickly. The U.S. Bureau of Labor Statistics projects roughly 180,800 openings for registered nurses each year through 2035, driven largely by employment growth and workers leaving the occupation. Hospitals already feel the pressure. An American College of Healthcare Executives survey found that 72 percent of hospital leaders were using contract travel staff to address registered-nurse shortages, while 64 percent identified competition from staffing agencies as a contributor to those shortages.

The need for temporary workers is straightforward. Employees call out, vacancies remain open, demand rises, and facilities still have patients who need care. Agency staffing provides a rapid answer, but the financial model attached to that answer can become difficult to sustain when temporary labor turns into a recurring operating expense.

Derrick Asingwire, who spent roughly a decade in staffing and six years operating a staffing agency, saw that pressure from inside the system, which led him to build OpusRoster, an on-demand recruitment and workforce management platform. He argues that facilities can end up competing against one another for the same pool of nurses, with agencies setting different rates and adding markups that ultimately land on the facility's balance sheet. "Agencies increase rates because they're competing for the same nurses," he explains. "Each agency is trying to win those workers, and the facility is the one that ultimately pays the higher price. You find facilities can never hire someone easily because the person asks for a higher rate. And if you don't give it to them, they'll work for an agency."

The financial strain can compound quickly. Asingwire points to nursing homes that depend on multiple agencies across multiple shifts, creating a recurring expense that can make direct hiring harder to sustain. Research supports the scale of the issue. The ASPE found that contract labor costs rose sharply relative to permanent labor after 2019, with the gap widening particularly among larger nursing homes.

The challenge also raises a question about who controls the economics of temporary staffing. Asingwire believes facilities should have greater influence over the rates they pay and the workers they engage.

"If nursing homes and hospitals agree on the rate they're willing to pay contractors, they can set that rate on our platform," he says. "That gives facilities greater control over pricing." OpusRoster is being developed around that premise, initially targeting hospitals, nursing homes, and assisted-living facilities in Massachusetts.

Facilities, he says, can set their own rates while the system handles worker recruitment, matching, credential verification, background checks, shift access and payment settlement. Training and credentialing are also intended to sit within the platform, giving facilities a more consistent way to verify that workers are prepared for deployment.

Trust remains critical to the model. Asingwire argues that staffing technology has to address the operational work traditionally handled by agencies, including verifying qualifications and maintaining documentation. "Training is going to be built into the system," he explains. "Workers can complete the required training through the platform, giving facilities confidence that the people they bring in are properly qualified."

The larger shift he envisions is toward a staffing marketplace where facilities can access qualified workers without being locked into traditional agency arrangements. His argument is ultimately economic. "Our goal is to avoid dependency, to help facilities avoid dependency on agencies who are brokers in this place," he says.

Healthcare will continue to need flexible staffing as long as workforce shortages, unexpected absences, and fluctuating demand remain part of operating a facility. The more consequential question is how much that flexibility should cost. Asingwire believes the next phase of healthcare staffing will give facilities greater control over that equation, allowing them to access qualified workers while retaining more of the money currently absorbed by intermediary markups.