B.C.'s health-care crisis: First look at massive markups by 'parasitic' staffing industry

Private staffing agencies stand to make huge profits from British Columbia’s public health-care system, according to exclusive documents obtained by CTV News after a seven-month freedom of information battle.

The contracts between the province’s health authorities and 16 for-profit companies detail massive markups for the provision of health-care workers – from nurses to X-ray technologists to occupational therapists – who are now propping up the faltering public system. Sources tell CTV News anywhere from a quarter to nearly all the staff in a hospital operating room or care home ward, for example, are there on a short-term contract.

Many of them have left the public system and union pensions to make much higher hourly rates while retaining the ability to choose when and where to work. The agency hires them as temp workers, taking a big slice of the pie for doing so. 

For example, a unionized, health authority worker with a designation as a registered nurse in their first 10 years on the job makes roughly $45 as their base hourly wage. A recent posting from a prominent staffing agency that runs travelnurse.ca posted a week-long request for a surgical nurse in the Lower Mainland offering $52.50 per hour, with “bonus incentives” and unspecified benefits.

All but one of the contracts allows such companies to charge health authorities $75.62 for that same nurse for each hour they work, as well as any travel expenses for those working more than 50 kilometres from where they live. The markup is consistent across professions, and all offer a one per cent credit for each $500,000 spent.

The contracts all appeared to have been re-negotiated last year and are nearly identical except for two. ProMed HR Solutions’ contract has redacted the sections outlining its rates, and Ontario-based Calian Ltd’s contract was radically changed last year: until then, they had been charging $115 per hour for registered nurses provided to Interior Health alone.

A GROWING PROBLEM FOR TIGHT BUDGETS

Before the pandemic, so-called “travelling nurses” had been predominantly used in rural and remote communities where they would fill-in at smaller health-care facilities to allow for vacations, medical absences and parental leave. 

But the staffing crisis that’s dramatically escalated since the COVID-19 pandemic has dramatically increased the reliance on short-term contractors, expanding to allied health-care workers like pharmacy technicians and technologists. 

“I would call it a parasitic industry because they are really benefitting from the severe shortages we're seeing in our public health-care system,” said Andrew Longhurst, a health policy researcher at Simon Fraser University. “When you do the math you see about a 30 to 35 per cent markup and that's a pretty significant profit margin – you don't see that in a lot of industries, especially in an industry without a lot of overhead.”

The health authorities require the agencies to cover their workers with insurance, but also demand they sign their standard confidentiality agreement, that they cannot assign the agreement to another company, and that “there is no minimum service supply guarantee.”

TRULY A ‘LAST RESORT’?

The health minister and health authority staff have justified the use of agency staff at various times by suggesting they were the workforce that powered vaccinations, testing and contact tracing during the pandemic, that they were a “last resort” that is only called upon to fill vacant shifts when patient safety or keeping a facility open required more staff than were available from the full-time ranks. 

But British Columbia has seen a seven-fold increase in payouts to those agencies as reliance on them skyrocketed and has continued after public COVID-19 testing collapsed and was abandoned in December of 2021 and many vaccinations are now carried out in pharmacies.

“This is privatization of healthcare starting with nursing services and it's not good stewardship of taxpayer dollars,” said BC Nurses’ Union president, Adriane Gear, who pointed to the better working conditions offered by agencies as a major incentive for nurses.

“We can see why nurses make this choice, but it's further destabilizing the system and steps need to be taken to keep that from happening,” she said, echoing the concerns of public health-care advocates. “The cost is not sustainable and I think if you could take a fraction of that money and invest it in the health authority nurses in better recruitment and retention strategies, that's where taxpayers' dollars should go.”