Agency staff cost Ontario hospitals, LTC homes nearly $1B in 2023

Hospitals and long-term care homes spent nearly $1 billion last year to fill shifts with nurses and personal support workers from private staffing agencies, a Ministry of Health document estimates.

A November 2023 staffing agency update obtained by The Canadian Press through a freedom of information request shows that agency use increased from 2021-2022 to 2022-2023 by every metric in hospitals and long-term care, in hours worked and in total costs.

Hospitals and long-term care homes turn to staffing agencies when they can't fill all of their shifts with employees, and the temporary nurses and PSWs from agencies allow them to continue providing services in the face of staff shortages.

But agencies charge double or even triple the regular hourly rate for their staff, hospitals and long-term care homes have said.

Health Minister Sylvia Jones has repeated recently that agency usage is going down in the province.

"Respectfully, Speaker, facts matter in this discussion," she told the legislature in October. "The use of health personnel agency nursing has actually decreased in the province of Ontario."

A spokesperson for Jones wrote in a statement that the proportion of agency nurses and total hours worked by agency staff has decreased since 2017.

But that was not the case in the 2021-22 to 2022-23 period, the most current data when the ministry document was written. It says organizations' reliance on the use of agencies to address staffing challenges "continues to increase."

"Staffing issues persist in hospitals and long-term care homes; vacancy rates remain consistent despite the addition of staff through HHR (health human resource) programs," the ministry's capacity and health workforce planning branch wrote.

"This is due to migration of staff away from hospitals/long term care to other sectors (public health, telehealth) and agencies; and overall higher demand for staff due to the capacity that is being added in the system (increase in hospital and long-term beds, etc.)."

Understanding the issues at play is key, the planning branch said.

"It is important to crystallize the problem we are trying to solve (high use, high cost), and respond to the choices that staff are exercising when they choose to work for agencies (higher compensation, higher flexibility)," it wrote.

"This balance is crucial to ensure retention and satisfaction of our workforce."

Agency cost 'crowding out' care budgets:advocate

Lisa Levin, the CEO of AdvantAge Ontario, representing the province's non-profit long-term care homes, said surveys of her organization's members suggest the situation hasn't improved much since 2022-23.

"We've been hearing from our members that the cost of agencies are crowding out the budgets for care," she said.

Hospitals and long-term care homes spent about $368.64 million on agency nurses in 2021-22, and the projected cost in 2022-23 was $600.18 million, a 63 per cent increase, the ministry document says.

When the cost of personal support workers from agencies is added, the total for the latter year becomes more than $952.8 million, the document says.

The percentage of hours worked in hospitals by agency nurses was 0.7 per cent in 2021-22 and that rose to 1.5 per cent the next year, the document said, with an increase of 123 per cent when looking at total hours.

In long-term care, the percentage of hours worked by agency staff grew from 7.6 per cent to 14.9 per cent in the same time period, an increase of 103 per cent when looking at total hours.

Agency staffing is a tool many northern and rural hospitals rely on, Jones' spokesperson said.

"We will continue to take action to grow our health-care workforce in these communities, building on our progress adding 17,000 new nurses this year, through programs like the Learn and Stay grant and breaking down barriers to make it easier for internationally and interprovincially educated nurses to practice in Ontario," Hannah Jensen wrote in a statement.

Opposition criticizes reliance on agencies

Green Party Leader Mike Schreiner said Ontario's growing reliance on staffing agencies means more tax dollars are ending up in the hands of agencies that are allowed to charge whatever they want.

"It's completely inappropriate, financially unsustainable and not a real solution to the issues we're facing," he wrote in a statement.

NDP Leader Marit Stiles said her party and experts have long been ringing the alarm bells about staffing agencies.

"The Ford Conservatives are underfunding our health care system so badly that hospitals and long-term care homes are left with no choice but to use these private nursing agencies," she wrote in a statement.

"This not only costs all of us more money, it further drains workers from the public system."

Hospitals and long-term care homes have said staffing agencies are necessary and they do not want to see them banned, but many have urged an end to what they call price gouging.

The Ministry of Long-Term Care is "examining the possibility of creating a vendor of record for approved LTC agencies to potentially support price regulation," the document says.

AdvantAge has made that recommendation to the ministry, but also says any measure applied to staffing agencies for long-term care must be applied across the health sector so one part of the system is not disadvantaged.