Help wanted sign for nursingIt is no secret that nursing facilities (NF) nationwide are in the midst of a severe staffing crisis that has been exacerbated by the pandemic. We’ve had many conversations with our clients about the difficulties in finding and retaining direct care staff despite large wage increases and incentives. This industry-wide problem has resulted in unprecedented nurse staffing agency usage, so much so some NFs have had difficulty finding an agency with available nurses.

With the recent release of the 2021 Ohio Medicaid NF cost report database, we took a look at statewide agency nursing expenses over the past 10 years, which has shown a steady increase even while average occupancy has been declining. Agency nursing usage for Registered Nurses (RN), Licensed Practical Nurses (LPN), and Nurse Aides increased $203 million in 2021 to $341 million, an astounding 147% increase from $138 million in 2020, even though occupancy declined 5% in the same time period.

 

 

  • 83% of NFs used some agency nursing in 2021, up from 76% in 2020, and 32% in 2012.
  • $341 million total agency nursing is just short of the prior 4 years combined total.
  • Increased 600% in the last 5 years and 3600% in 10 years, which makes the spike we discussed in this 2017 article pale in comparison.
  • Agency nursing represents 5% of total costs and 10% of direct care costs in 2021, up from 2% of total costs and 4% of direct care costs in 2020.
  • LPN had the biggest increase in usage up over 189% from 2020, as well as the biggest increase in percent of facilities utilizing agency nursing up to 67% from 53%.
  • 10% of NFs had over $1 million in agency nursing in 2021.
  • An average 100-bed facility paid $404,000 in 2021 for agency nursing, compared to only $165,000 in 2020 and $10,000 in 2012.
  • Agency represented $15.46 per day (RN $2.25; LPN $6.07; Nurse Aide $7.14), an increase of 161% over 2020. There was a great disparity between urban and rural counties:
    • Peer Group 1 (Cincinnati area counties) $18.82
    • Peer Group 2 (Other urban counties)      $94
    • Peer Group 3 (Rural counties)                  $97

 

 

Request our analysis: If you are an Ohio provider having staffing challenges, our agency nursing and average hourly wage analysis can help. It compares your agency nursing usage and nursing average hourly wages to county, peer group and state-wide averages. Please contact us to request the analysis which can assist you in determining the target areas to focus on.

Stay tuned…… In future articles, we will look at the relationship between direct staffing and agency usage, average hourly wage trends, and occupancy declines.

In times of uncertainty, understanding your facility’s operations can make all the difference. HW&Co. can assist you in analyzing your facility’s expenses, hourly rates and staffing hours per day, including comparisons to competitor and peer averages. Please contact us to discuss how HW&Co. Healthcare Advisors can help you improve your operations.

@2022

 

Paula Reape

Paula Z. Reape, CPA, LNHA
Principal
paula.reape@hwco.cpa