Nursing Homes Increasingly Rely On Staffing Agencies For Direct Care Nursing

Abstract

When nursing homes experience a shortage in directly employed nursing staff, they may rely on temporary workers from staffing agencies to fill this gap. This article examines trends in the use of staffing agencies among nursing homes during the prepandemic and COVID-19 pandemic era (2018-22). In 2018, 23 percent of nursing homes used agency nursing staff, accounting for about 3 percent of all direct care nursing hours worked. When used, agency staff were commonly present for ninety or fewer days in a year. By 2022, almost half of all nursing homes used agency staff, accounting for 11 percent of all direct care nursing staff hours. Agency staff were increasingly used to address chronic staffing shortages, with 13.8 percent of nursing homes having agency staff present every day. Agency staff were 50-60 percent more expensive per hour than directly employed nursing staff, and nursing homes that used agency staff often had lower five-star ratings. Policy makers need to consider postpandemic changes to the nursing home workforce as part of nursing home reform, as increased reliance on agency staff may reduce the financial resources available to increase nursing staff levels and improve the quality of care.

Exhibit 1. Share of U.S. Nursing Homes Using Direct Care Agency Nursing Staff, 2018-2022

Source: Authors’ Calculations Using Payroll-Based Journal Data. Notes: The share of freestanding nursing homes using agency staff was calculated on a daily basis. To account for the significant daily variation, the 14-day moving average is reported. The daily sample size average 14,435 nursing homes for all periods excluding the first quarter of 2020 which averaged 11,770 nursing homes.

Exhibit 2. Share of Hours Worked By Agency Nursing Staff in U.S. Nursing Homes, 2018-2022

Source: Authors’ Calculations Using Payroll-Based Journal Data. Notes: The share of hours worked by agency staff is the total number of agency hours divided by total number of nursing staff hours. To account for the significant daily variation, the 14-day moving average is reported. The daily sample size average 14,435 nursing homes for all periods excluding the first quarter of 2020 which averaged 11,770 nursing homes.

Exhibit 3. Distribution of U.S. Nursing Homes by Number of Days Agency Staff are Utilized, 2018 and 2022

Source: Authors’ Calculations Using Payroll-Based Journal Data in 2018 and 2022. Notes: Among nursing homes that used agency staff, the exhibit reports the percent of nursing homes by the number of days they used agency staff. The sample is restricted to nursing homes that reported PBJ data for all days in the calendar year. The sample size is 6,636 nursing home in 2018 and 10,258 nursing homes in 2022.