Ballad CEO, Congressional panel agree: Travel nurse industry huge part of health care labor challenge

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JOHNSON CITY, Tenn. (WJHL) – If national leaders want the rural nursing shortage to disappear they’re going to have to fight the battle on many fronts, Ballad Health CEO Alan Levine and others testifying before a Congressional subcommittee said Tuesday.

Levine said the region hasn’t avoided what he called an “emerging national crisis” – the “supply and resiliency of our nation’s health care workforce, in particular our nursing professions.”

In a sign of the tension over vaccine mandates, the hearing of the Energy and Commerce Committee’s Subcommittee on Health also featured sharply differing opinions from panel members, including Virginia 9th District Republican Morgan Griffith.

But members and several guest panelists seemed to agree on at least one thing — the travel nursing industry is gutting small communities’ ability to keep their hospitals fully staffed and the cost of contract nurses keeps rising.

“How can we deal with that?” Vermont Democrat Peter Welch said at one point. “Part of it is making the nursing profession more financially competitive, but we can’t compete with the traveling nurse where essentially it’s a stickup and a lot of that extra charge goes to, probably hedge funds.”

Levine told representatives Ballad currently has 700 nurse openings, which it is partly offsetting with 400 travel nurses. He also seemed to suggest that current rates for travelers, which can approach quadruple standard pay, may border on gouging.

“Attorneys general will prosecute and go after organizations that gouge consumers in the aftermath of a disaster like supplies or gas,” Levine said. “Here we sit where we’re now paying $140 an hour for contract nurses. I’ve got a nurse at one of my hospitals in Johnson City from Vanderbilt and the reason that nurse is here four hours away is because they can get three times more money from a contract agency.”

Vaccine mandates problematic for rural systems?

Griffith spent most of his five minutes of allotted time conversing with Levine. He estimated Ballad could lose up to 15% of employees if it instituted a vaccine mandate.

Levine didn’t put a number on it but said just 63% of total Ballad employees are vaccinated, along with 90% of physicians. Without strong outside pressure, though, Levine said Ballad was unlikely to mandate the COVID vaccine.

“We’re in a part of the country where for a lot of various different reasons people have differing viewpoints on vaccines,” Levine said. “And so we’ve tried very hard to lean heavily into educating people, being a resource of truth for the community on it and we’re going to continue doing that.”

He said with 700 nursing openings, every departure is hard to replace.

“We have been a bit hesitant to impose a mandate while we continue to try to work with and educate our team members,” Levine said. “We certainly are for them getting vaccinated but the issue of a mandate has been a concern for us.”

Griffith said people in his district sometimes see mandates like those associated with COVID “cultural colonialism by Washington DC.”

“There’s just a resistance to folks coming in from outside trying to tell anybody what to do and I’m concerned that there will be a lot of people, a lot of health care professionals that’ll just say ‘forget it, I’ll go do something else.”

But subcommittee chairwoman Anna Eshoo, a California Democrat, pushed back on that notion.

“At Tyson Foods, 96% are vaccinated,” Eshoo said of the huge food company with locations in many rural, conservative areas. Tyson announced in early August it was mandating vaccination and would pay $200 to fully vaccinated frontline workers.

Tyson announced Tuesday it had reached the 96% level.

“60,000 people vaccinated thanks to their requirement,” Eshoo said.

I have to tell you, if I went to Stanford University Hospital … as a patient I wouldn’t want any doctor, any nurse, anyone coming near me that was not vaccinated. I don’t go to the hospital to become infected, so I just, I wish that we were all on the same page because I think this back and forth on vaccinations – at the end of the day I think it’s holding us back, honestly. It’s hurting us and our country.”

Travel travails

While several other committee members addressed vaccine mandates, with opinions generally split along party lines, the hearing covered other issues that predate COVID and will outlast it.

From a shortage of nursing school slots and an out-of-control travel nursing industry to a skewed Medicare payment system that’s slanted toward high-income regions, rural markets face outsized challenges finding and keeping nurses and other staff, Levine said.

Stress and burnout from COVID, he said, has only exacerbated the problem to the point that a $100 million recurring investment in higher nursing pay may not be enough to stem a tide that has left the 21-hospital system with 700 nursing openings.

“Once the very generous federal pandemic support is gone I do fear this could have a lasting impact on our sustainability as a rural health system,” Levine said during prepared remarks.

He referenced the closure of 180 rural hospitals nationally and said Ballad is paying contract nurses “fourfold” rates to combat shortages. “Most rural health systems can’t afford to do this for very long,” he said.

Indeed, Ballad’s financials show it spent $85 million on contract labor in the fiscal year that ended June 30, 2021, up 60% from the $53 million it spent the year before.

Unlike opinion over vaccine mandates, Congressional criticism of the contract nursing industry was bipartisan.

Pennsylvania Republican John Joyce, a physician who represents a rural district, was among several who called out the contract nursing industry. He said his district’s hospital systems had difficulty keeping enough providers even before COVID-19 and that stress

He spoke of hospitals “forced to contract with nursing agencies at sometimes double, even quadruple the cost of our hourly rates just to stay operational and staffed to be able to take care of post-op patients.”

Levine thanked Joyce for that statement.

“What they’re doing is not only financially destroying some of these hospitals, but they’re also distorting the market for nurses, and it’s not helpful what they’re doing,” Levine said.

Vermont Democrat Welch spoke of $25 million in contract nursing costs for a small hospital system in Rutland.

“I don’t know who owns these travel nurse agencies but it’s like now a business model where there’s an incredible profiteering,” Welch said. “And it creates a dynamic where nurses who are for instance on staff at the University of Vermont go on a per diem and then go down 90 miles … to Dartmouth-Hitchcock as a traveling nurse and make a lot more money, and there’s no benefit to the community.

“I’d really welcome thoughts on how to deal with that.”

“Supply and resiliency”

Levine said the key to digging out of those shortages is twofold: ensuring enough supply of new nurses and helping foster “resiliency” among the ones who are already employed.

He brought up his oft-repeated argument that the so-called “Medicare wage index” unfairly penalizes rural areas and those with lower cost of living. He said Ballad gets about 70% of its revenue from lower-reimbursing government sources.

“Government payment is not and cannot keep up with the inflation we’re seeing in the market right now and it’s further harmed by the arcane and frustrating Medicare area wage index,” Levine said.

He also told Washington Republican Cathy McMorris Rodgers that COVID-era flexibility allowed by the federal Centers for Medicare and Medicaid Services should remain.

That included rules about who can do what type of work as well as options for telehealth.

“If you’re in a rural or non-urban region of the country the use of telemedicine can be critical if you’re going to bring services, particularly for children who suffer from mental health issues as well as adults with addiction,” Levine said. “The flexibilities with telemedicine, particularly if we can get broadband deployed to rural and non urban communities in America, that’ll help.”

He said as the pandemic subsides, employee turnover will probably increase.

“We need the flexibility of using other healthcare professionals like paramedics, EMTs, nursing assistants in ways that perhaps in the past we haven’t used them before, and any types of flexibilities would help.”

In the end, though, Levine said regional leaders in and out of health care need to work together regardless of what gets accomplished in Washington.

He mentioned Ballad’s newly announced partnership with East Tennessee State University (ETSU) that will create a center for nursing advancement that aims “to bolster nursing supply and support.”

Levine said COVID-19 laid bare an already existing problem of resiliency among nurses, especially as mental health challenges increased under COVID’s stress.

Just since 2016, he said, the average American hospital has seen about five out of six existing nurses leave employment – whether for other nursing jobs, retirement, or different careers.

And he said nearly a quarter of hospital turnover comes from people leaving within their first year, “which points to the issue of resiliency.” On top of that, Levine said, retirement is rising as a percentage of departures.

“The cost of this in terms of quality of care and sustainability is enormous,” he said.

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