Covid Led To Hundreds Of Millions Being Paid For Travel Nurses


By Joshua Solomon

On Tuesday, the State University of New York’s Upstate University Medical Center made what’s become a typical payment for central New York’s largest hospital and only trauma center: $1.5 million to a travel-nurse agency.

The estimated weekly salary for a nurse in that payment was $7,200, nearly five times what the hospital would pay a union nurse.

Since Gov. Kathy Hochul declared a state of emergency to address health care staffing shortages in September 2021, Upstate Medical has secured more than a half-billion dollars in contracts with staffing agencies to provide temporary health care workers, usually nurses.

The contracts reveal the hidden cost for health care workers as rates were negotiated at a time when hospitals were running short of staffed beds because of a lack of workers available to sufficiently and legally care for them, according to records obtained by through Freedom of Information Law requests with the Office of the State Comptroller.

The contracts often result in the temporary health care agencies receiving about 44 percent of the costs billed to the state.

In one of the contracts, a registered nurse who works a 40-hour work week could be paid up to $4,000 — roughly $208,000 a year. But that weekly payment does not include the additional $3,200 paid to the staffing agency. The agency, Aya Healthcare, notes the additional money covers not only its own profits, but also the costs of housing, meals, relocation, professional liability insurance, workers compensation and statutory matching taxes. The agency did not specify how much of the overhead costs it takes for its own revenue.

"We're proud to partner with hospitals to ensure they have high-quality clinicians to support their communities and we're deeply grateful for the critical work of our clinicians," Lisa Park, a spokeswoman for Aya Healthcare, said in a statement.

SUNY Upstate has contracted with at least 38 other companies, though Aya Healthcare has the second most expensive contracts on the books, $42 million, which can be renewed annually for four years. The most expensive contract, with Health Carousel Travel Network for $190 million, is not in the possession of the Office of the State Comptroller, unlike the one with Aya Healthcare.

While Hochul has previously described hospitals as getting “slammed” by the “very expensive” contracts with travel nursing agencies, less has been known about the rates the agencies were able to negotiate with hospitals, without typical competitive bidding or other rules in place.

“We have travel nurses coming from other states,” Hochul told reporters in January. “They’re very expensive, very expensive. It’s a hard hit for the state.”

A month earlier, Hochul told reporters that the “average person would consider” the travel nurse costs as “very high rates” and the “hospitals are getting slammed because of the expenses,” which the federal government was no longer picking up as a COVID-19 cost.

In the months since, Hochul has continued the state of emergency to ensure enough health care workers can meet the demand in New York, including those who delayed receiving typical care during the pandemic.

Hochul’s executive order, the fourth she signed into law when she succeeded Gov. Andrew M. Cuomo in August 2021, is set to expire on June 8, the final day of the legislative session.

Lobbyists and experts expect lawmakers to pass health care staffing-related legislation, although the details are still being worked out in the final days of session. Discussions by experts have mostly focused on licensing out-of-state health care workers. They are generally not licensed in New York but can work here under the executive order.

Regardless of legislative fixes, one question — which good government watchdogs raise on pandemic-related procurement practices — is whether the contracts with the travel-nurse agencies would become void if the executive order expires.

“There’s an awful lot of money involved here, and one way of ensuring the state isn’t being abused is by competitive bidding and by having another set of eyes on the agreement,” said Bill Hammond, senior fellow at the Empire Center.

SUNY Upstate Medical University’s contracts with temporary health care agencies include four, one-year renewals. If the contracts were maximized to their respective potential, they could result in a $2.5 billion value for travel nurses and health care workers who operate outside the state’s unionized workforce.

“You hate to see the state spending money that way — money that could be spent on improving care in other ways or just being saved on behalf of the taxpayer,” said Hammond, who closely follows the state’s spending on health care and insurance.

SUNY Upstate is probably not the only hospital that executed hiring contracts during the state of emergency.

The hospital, though, is unique in its transparent reporting of why the contracts were secured — making them different from more opaque records filed by SUNY hospitals in Brooklyn and at Stony Brook University on Long Island.

Similar contracts also were obtained by private hospital systems throughout the state; they also may employ unionized workers but are not obligated to share contracts with the public.

“Bigger picture, whether its taxpayer dollars or health care insurance dollars, someone is going to have to pay,” Iroquois Healthcare President Gary J. Fitzgerald said.

Concerned with the exorbitant fees from outside agencies, Fitzgerald said Iroquois Healthcare formed its own, lower-cost staffing agency to assist with staffing shortages upstate.

Hospital officials and experts in the field describe a perfect storm of events that have led to a shortage of nurses.

Advocates in December said there are 9,300 job openings for nurses in New York. The advocates expect the nurse shortage could swell to 30,000 vacancies by 2030. Meanwhile, the amount of care needed is expected to increase with the state’s aging population.

Experts point to collateral effects from the COVID-19 pandemic as another driver of the shortage. Job burnout, deaths and retirements of health care workers, vaccine mandates and changes in workplace cultures all contributed to nurses to choosing different ways to work. Some became travel nurses, where they could earn far more.

SUNY Upstate suspended close to 200 workers for failing to comply with vaccination requirements, which led the Public Employees Federation to file a lawsuit against the hospital.

“PEF supports the full state salary review recommended by the governor and approved by the Legislature,” a PEF spokesman said. “At a minimum, we believe all state salaries should bump up two grades in an immediate effort to bolster retention and help with recruiting.”

In November 2021, Upstate Medical University Hospital closed nearly 20 percent of its beds and halted elective surgeries because it had about 400 vacant nursing positions.

“Upstate is like many other hospitals across the country — balancing staffing challenges as we see increasing demand for patient care,” the hospital said in a statement that year. “Our nursing staff in particular has been working around the clock helping patients, and we will support them so they can continue to provide the highest level of care.”

Several lawsuits were filed against the state for its vaccination mandate and some of those case are still being litigated. Last week, the state announced plans to lift the vaccine mandate for health care workers.

“This is like a slow-moving natural disaster, and it’s going to last longer than any of us really want,” said Dr. William Paolo, Upstate’s head of emergency medicine.

At the same time, the hospital was paying millions of dollars for outside help for travel nurses and other staff. The hospital has the ability to continue those contracts with outside help at least through 2026, barring any legislative changes to COVID-19 emergency contracts.

SUNY Upstate provided raises to its nearly 1,500 registered nurses, ranging from $9,000 to $14,187 based on years of service, experience and education. In September, there were plans from central New York hospitals to turn away thousands of patients, whilen Tuesday, the State University of New York’s Upstate Univers


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