Temporary nurse staffing is cost-effective: Study

By Debra Wood, RN

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Travel nurse staffing and other kinds of supplemental nursing can be cost-effective for hospitals and even allow them to break even on staffing expenses when addressing shortages of permanent staff or rising patient acuity, according to a new study in the Journal of Nursing Care Quality. 

“Minimal or moderate use of supplemental nurses could be cost even,” said Ying Xue, DNSc, RN, associate professor at the University of Rochester School of Nursing, in Rochester, New York. 

“This confirms what many health systems have known for a while: Modest use of supplemental staffing is a cost-efficient strategy -- and overtime use of permanent RNs is not cost-effective,” said Ralph Henderson, president of Healthcare Staffing at AMN Healthcare in San Diego. “A lot of health system leaders believe supplemental nurses are a great way to handle the ebbs and flows of the business.”

Landry Seedig, division president of Travel Nursing at AMN Healthcare, was not surprised by the study results. 

“For hospitals that use contingent labor in the right way, it’s cost-effective. That means they are using it for census fluctuations, seasonal difference, EMR projects or to fill in for leaves or vacations.”

The researchers, who included Linda Aiken, PhD, RN, at the University of Pennsylvania, analyzed data for four years from 19 adult units, including medical, surgical, step-down and intensive care, at a large academic medical center from 2003 to 2006. In 2012, Xue and colleagues published a paper from the same data source that found no adverse outcomes related to the use of supplemental registered nurses. 

The recently published study, titled Cost Outcomes of Supplemental Nurse Staffing in a Large Medical Center, “minimal to modest use” of temporary nurses can be cost-efficient, but heavy reliance on them to meet core staffing needs probably is not. The study also found that using temporary nurses may be more cost-effective than using overtime by permanent staff nurses. Overtime remains a poor solution for hospitals, the researchers said. 

“There is a lot of research that’s been conducted to demonstrate that overtime is related to poor patient outcomes and poor nurse outcomes,” Xue said. “Nurses are more likely to burn out and to quit.” This adds significant costs for healthcare facilities. 

The researchers also found supplemental nurses’ hourly rate was on average higher than staff nurses’ hourly pay. But when employee benefits and other expenditures were factored in, the difference was not statistically significant. 

Henderson noted that the costs of temporary nurses may be even more competitive today compared with 10 years ago, when the data for the study was collected, because staff nurse wages have grown at a higher rate than supplemental nurse bill rates for nearly a decade. He also said that the costs for permanent staff nurses may be higher if you consider the full costs of employment, including sign-on bonuses, new-employee orientations and other factors. 

Seedig said that some hospitals have difficulty retaining permanent nursing staff due to a problem environment or over-reliance on overtime that results in an inordinate amount of nurse burnout. When that happens, the mix can become too heavy on temporary clinicians. 

“Sometimes, our nurses do not enjoy going to those facilities,” Seedig said. “Nurses want to go to the ones using contingent the right way – facilities that utilize the right mix of permanent and temporary staff to create a good work environment.”

Nurses considering a travel assignment often ask about the culture of the facility. That can translate to more than a pay rate, Seedig said. 

“We want our facilities understanding that we are a great resource to bring nurses in for periodic or temporary reasons,” Seedig said. “If you use it the right way, temporary nurse staffing will be cost-effective.”