As a travel nurse going on an assignment, you may occasionally have to deal with the surly core staff nurse who is unhappy that a travel nurse has been brought onto the unit. Even if she thinks you’re getting paid far more than you actually are, you are definitely getting paid more than she will be taking home for the same job.
This is travel nursing and while there may be a few envious nurses along the way, most will welcome your presence, your experience and your assistance. Travel nurses make more, that’s just the way it is. Certainly, we can all agree that this is the primary reason why facilities try to limit travelers, right? Travel nurses cost the facility far more than a core staff member, right?
Let’s be clear here, this may be the reason the facilities think they shouldn’t hire travelers but it’s not based on the facts. The truth of the matter is that the facility is not spending any more for a travel nurse than they are for a core staff nurse. In fact, a facility spends less by hiring a travel nurse.
How can this be, you ask? If a travel nurse makes so much more than a core staff and if the facility is ultimately paying for both, how can the cost be so different?
According to KPMG’s 2011 U.S. Hospital Nursing Labor Costs Study, the true cost of a core staff nurse must include more than just their hourly wage. Most of that expense actually “comes from non-productivity costs (12-13%), insurance costs (8-9%), recruiting costs (1-2%), and other costs (1%). In other words, the actual cost per hour for a full-time nurse is on average 176% of their base hourly wage.”
The study adds that for a facility employing a full-time core staff nurse, they are also paying for that employee’s “base wages, employer taxes and paid time off” which “represents 76-78% of the total cost of the RN labor force at facilities.”
This means that simply looking at an hourly rate for a travel nurse and attempting to reconcile that with what a facility pays their core staff nurses is an unfair comparison. A travel company such as TRS Healthcare will bear the full cost for credentialing, insurance and in many cases, overtime, holiday pay and orientation pay. The hospital, in many cases, does not deal with those for the travel nurses they hire for an assignment.
A facility also loses money by having a vacancy that a travel nurse can fill immediately. Travel nurses are known to be highly skilled and flexible and can usually get right to work after a day or two of orientation while a facility will sometimes spend weeks orienting a core staff RN. Once a facility has spent months or years investing time and money in a core staff nurse, they will be more likely to spend additional resources on training, retraining or retention, incurring additional expenses. A travel nurse has a definitive end date on an assignment and gives the facility a more solid adherence to budgetary boundaries.
A facility also loses revenue by not having enough staff to safely perform billable services for patients. In the travel industry, every company can share stories where a facility reaches out with numerous needs to fill or a unit can be temporarily shut down and patients will have to be turned away. Facilities also have been known to wait until the last minute to share their needs with travel companies. This lack of foresight causes problems all around; facilities will have to implement “crisis rates”, higher than usual pay to gain interest in a nurse jumping through the extra hurdles of fast tracking an assignment and travel companies must work that much harder to facilitate a complicated process in record time.
Referring back to the 2011 KPMG study: “Two-thirds of the hospital executives responding to the survey say they are currently using travel or per diem nurses. The key reasons for using traveling nurses were supply and demand, and quality of these nurses. These appear to be even more important decision factors than cost.” This implies that regardless of the erroneous appearance of higher expenses for travel nurses, facilities still recognize the value they bring and will still utilize their services.
Adding further validation to the 2011 report, the first update to be released since has just become available. KPMG’s 2017 U.S. Hospital Nursing Labor Costs Study reveals that in the last six years, the trend towards utilizing travel nurses, and their value to hospital budgets, has continued to grow.
Said the updated study: “When all costs are considered, traveling nurses appear to cost less than permanent nurses on an hourly basis. Cost data provided by hospitals indicate that the hourly, all-in cost for a full-time, permanent nurse is approximately $89. This hourly cost is higher than traveling nurses that cost approximately $83 dollars per hour.”
That may not sound like much, but I would challenge anyone to consider how they would feel if they were told they would be making $6 less an hour. It adds up. It’s substantial.
So, it’s quite reasonable to say that a facility employing a travel nurse enjoys substantial savings. In a time when healthcare has been reduced to profit margins and bottom lines, utilizing travel nurses increases the fiscal viability of a hospital substantially.
Keeping that savings in mind, it makes sense that respondents reported that travel nurses comprise about 11% of their staffing and they “indicated their use of traveling nurses will likely continue to grow in the future”, citing “nursing shortages and facility growth”.
Travel nurses offer a facility zero financial burden for recruiting costs, insurance and non-productivity costs when compared to core staff nurses. Recruiting costs included “orientation, new hire training, referral program, advertising, health screening and sign-on and relocation bonuses”. Insurance costs included “health, dental, vision, disability, malpractice and life insurance.” Non-productivity costs included “continuing education, paid annual training and administrative tasks not directly linked to patient care”. These do not apply to travel nurses, as they are either costs borne by the agency that hires them or are done outside of contract dates.
The report states that simply comparing hourly wages “are a poor measuring stick” as those wages only represent “48% of the total cost for a permanent nurse”.
This is great news for a nurse considering a career as a traveler. Not only can she enjoy greater take-home pay but she will also be in high demand for the foreseeable future. It should also be viewed as great news for a facility attempting to supplement staffing and increasing patient satisfaction with top notch nurses. All while reducing costs. It’s a no-brainer.
Facilities have been wavering, delaying and losing out on extremely gifted travel nurses far a variety of reasons as of late. Be it the complexity of the effects of implementing the Affordable Care Act in 2015, the US Presidential election of 2016 or the potential modifications to the ACA in 2017, every excuse has been made. The fact that healthcare has become a business already makes a tough environment for a nurse who is following a “calling”, but when facilities show such poor planning and execution in their business strategies, it’s a wonder nurses are willing to stay in the healthcare profession at all.
Travel nurses are overly credentialed, highly trained healthcare workers and not only are they cost effective to hospitals, they are revenue generators for these corporate facilities. It’s beyond time that hospitals take sensible steps to plan and realistically set goals for interviewing and hiring their supplemental staff in a timely manner. Without question, travel nurses are needed and will continue to be needed in all imaginable futures.
It’s time to stop using the excuse that travel nurses cost too much.