Nursing agencies are staffing hospitals at ‘huge cost’ to health-care system, experts say

Burned-out nurses who've left Canada's healthcare industry in droves are now returning to the job through private agencies, and that transition is costing the public system millions of dollars every year.

Nurses working for these temp agencies can earn more than double the wages of staff nurses doing the same jobs in the same hospitals, with full control over their work schedules, according to those in the industry.

Terri Stuart-McEwan, vice president of clinical programs and chief nursing executive at Oak Valley Health, which operates Markham Stouffville Hospital in Ontario, said she's watched as a steady stream of nurses have quit their jobs out of fatigue and frustration.

"Last year we spent, in this organization, over $4 million [on agency nurses], and we are a medium-size organization," she said. "That's a huge cost to our health-care system."

Long-time nurses say those costs are just going to keep rising unless something is done to address systemic issues in the Canadian health-care system that are driving workers to leave their jobs.

In the meantime, the agency industry is flourishing. Stuart-McEwan said she now has contracts with 13 nursing agencies, compared to just one or two before the pandemic.

She describes these agencies as the Ubers of nursing, and just like ride-hailing companies, some agencies have implemented surge pricing that see costs spike during certain times.

"It would be a Saturday night, we're down by a couple of nurses, it's in the critical care area — we know we cannot survive without another nurse," Stuart-McEwan said.

"As an organization, you're saying I could either put my patients at risk, my staff at risk, or I pay $300 an hour."

High costs of agencies 'doesn't make sense'

Those hourly rates can add up quickly.

In Toronto, University Health Network's nursing agency expenditures totalled $6.74 million in the fiscal year ending in 2022, a sharp increase from the $775,926 it spent in 2021.

Manitoba spent $3.9 million in one year to fill shortages in Winnipeg alone, according to the provincial NDP, and Global News has reported that the cost provincewide was more than $40 million in 2021/2022.

And in Nova Scotia, the Department of Seniors and Long-term Care allocated $3.1 million in December 2021 for agency nurses, but later had to increase the budgeted amount for that year by $18.4 million.

In Quebec, private health-care staffing agencies cost taxpayers $960 million last year, and the province has spent about $3 billion on these agencies since 2016.

Earlier this year, the provincial government passed a bill that will limit the use of health-care staffing agencies, with a goal of banning hospitals from using them by the end of 2025.

"You've seen the cost of that, it doesn't make sense," Health Minister Christian Dubé said.

WATCH | The National reports on nursing agency costs:

Private agency nurses cost much more. Hospitals need them anyway

1 day ago

Duration 5:33

Canadian hospitals are facing a nursing shortage partly because many nurses have left for more flexible, higher paying nursing agencies. CBC’s Christine Birak found out why the cost to the public system is more than just financial and what it would take for nurses to come back.

Robert Handelman, the CEO of Toronto-based Staff Relief Healthcare Services, told CBC News that companies like his play an important role in providing workers when hospital resources are stretched thin.

His business has been around for 25 years and has long-standing relationships with a number of hospitals, Handelman said. But he noted that there are few barriers to entering the industry and no regulation of the sector, which has allowed a number of "predatory" agencies to pop up in recent years, charging high rates and taking a large cut of workers' wages.

'A meat grinder for nurses'

According to Natalie Stake-Doucet, the growing use of agency nurses is a symptom of a much larger problem. She recently quit nursing after a decade working in Québec, and currently teaches at McGill University.

"The private agencies are taking advantage of the fact that our health-care system is a meat grinder for nurses," she said.

She argues that private nursing agencies in Quebec are simply taking advantage of the high turnover within the province's health-care system, caused by poor working conditions, low wages, forced overtime and high patient-to-nurse ratios.

"This has been a crisis that nurses have been warning about for 20 years now, at the very least," Stake-Doucet said.

At Markham Stouffville Hospital, emergency room nurse Basil Byfield acknowledges it's been tough to retain staff in recent years.

"Emergency is really — I shouldn't say a beast, but it can be a tough place," he said.

During his 35-year career, he's spent time working for agencies as well, and says there are downsides, like having to quickly learn new procedures and technologies after being placed at a new facility.

But for many, the extra pay is worth it, and that's not easy to swallow for those working regular jobs at the hospital.

"It can be demoralizing for the regular staff having to do the same job but getting less pay," Byfield said.

Ontario nurse Kian Johnson said she originally began picking up shifts with an agency seven years ago to supplement the pay from her full-time hospital job.

"Just the full time employment income would not suffice to take care of the necessities in my life," she said.

Now she's studying to become a nurse practitioner and has left her staff position to exclusively work for the agency, where she can choose her own hours.

Johnson says that in her experience, there's always a shortage of staff nurses in Ontario hospitals.

"I've been on shifts where eight agency nurses are working within the facility on the unit and there's perhaps 10 or 12 nurses overall," Johnson said.

"It's necessary to have … adequate staffing, and the actual hospital does not provide it."

She believes the only way to reduce the dependency on agency nurses is to increase the pay in the public system, and allow more flexibility in those jobs.

"We try our very best to care for people," Johnson said. "I feel like we're not respected in the sense that our needs are not being met."