Why a cap on travel nurse salaries is a big mistake, particularly for patients


The American Hospital Association (AHA) and over 200 bipartisan, high ranking U.S. House and Senate members, including Adam Schiff, Tim Ryan, Rick Scott, Liz Cheney, and Jackie Speier — fearless fighter of women’s rights — are calling for an investigation into the high nursing staffing fees. They request the White House COVID-19 Response Team Coordinator to determine why nurse staffing fees have skyrocketed during the pandemic and protect consumers from anti-competitive and unfair agency staffing.

Denise Dawkins is an assistant professor of nursing at San Jose State University. (Photo courtesy of The OpEd Project)

Everyone involved agrees that the COVID-19 crisis has placed unprecedented stresses on healthcare workers and accompanying burdens on hospital systems to maintain safe staffing levels to care for patient demands. But the AHA and this large group of lawmakers are bent on focusing on why nurse staffing agencies have collectively raised fees to hospitals as much as three times the pre-pandemic rate, with 40 percent going to the agency’s profits.

This may sound bad by the numbers. But in my opinion, as a nurse for over 38 years, who has worked for nurse staffing agencies, I believe that AHA and lawmakers are errantly accusing these agencies of wholesale extortion. Because it is easier than paying travel nurses and the agencies that field their services based on emergency needs by hospitals dealing with a staffing crisis amid a pandemic. Don’t we pay police and firefighters premium rates when they work overtime or when called upon for emergency duties?

Meanwhile, travel nurses and agencies are becoming national targets.

During the pandemic, Massachusetts and Minnesota have capped fees to address the high cost of the nursing staffing agencies. Massachusetts raised its caps by 35 percent, whereas Minnesota increased the cap to $58.08/hour for regular pay and up to $99.90/hour for holiday pay. Connecticut enacted a statute prohibiting profiteering during emergencies, and violators will incur fines. In Pennsylvania, a bill was introduced in January to cap the rates at $150/hour for workers sent by staffing agencies to long-term facilities. Still, this would include administrative costs incurred by the agencies.

Hospitals must offer competitive salaries to attract the best and brightest Registered Nurses. Unfortunately, labor can cost a business up to 70 percent of their profits, so it makes sense that it would be the first place the health organizations would start to impose salary caps on traveling nurses to trim costs.

Not all businesses are the same

To be sure, salary caps are essential for many industries, particularly in large organizations where the compensation structure is more defined. However, smaller businesses may give their managers latitude in determining salary increases for employees, raising salary levels, and pricing employees closer to the salary cap sooner than is possible with a large company. 

When it comes to nursing salary caps, there may be unintentional consequences, starting with potentially exacerbating the current chronic nurse shortage that has taken root across the country. In response to cap salaries, nurses may move to areas with better compensation, leaving some hospitals with a limited supply of nurses.

The truth is, traveling nurses are essential during a pandemic, and the agencies that supply traveling nurses have not been more crucial than presently due to the pandemic. 

When it comes to nursing salary caps, there may be unintentional consequences, starting with potentially exacerbating the current chronic nurse shortage that has taken root across the country.

Like most healthcare professionals, nurses are not in it just for the money. For example, when New York City needed nurses during the pandemic, traveling nurses came to the rescue. Nurses are highly skilled workers whose roles can’t be easily duplicated, and they are the most prominent frontline healthcare workers in the health industry. Limiting access to traveling nurses is not a way to ensure patient safety. Nurses are tired, burned out, and welcome relief that the travel nurses can bring. 

To be sure, hospital costs have increased very steeply and rapidly.  According to a study conducted in 2020, hospitals increased patient charges up to 18 times, which doubled in the last 20 years. Could this concern for high nurse agency fees be more about cutting into their profits than patient safety? 

Doctors are expensive; the most expensive employees at most hospitals. Why not cap their salaries? Cap the CEOs too. 

If we don’t do that then leave traveling nurses alone, too. These nurses are being paid their worth for the premium service and patient care they administered during the ongoing pandemic and beyond. 

About the author

Denise Dawkins is an assistant professor of nursing at San Jose State University with more than 38 years of nursing experience and 15 years as a nurse educator. She is also a Public Voices Fellow with The OpEd Project.

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