In the midst of a health-care staffing crisis, Ontario’s not-for-profit nursing homes say they’re losing tens of millions of dollars to temporary-employment agencies that often charge exorbitant fees.
Operators say those fees are cannibalizing the government funding needed to hire new workers to meet Premier Doug Ford’s target for an average of four hours per resident of daily hands-on care by March 31, 2025.
That goal, industry leaders say, is increasingly at-risk because many agencies are “poaching” frontline employees and charging short-staffed homes excessive fees to replace them.
Essentially, homes are paying more money for less staff.
“It’s the Wild West-meets-the gold rush for temp agencies,” said Peter Bolland, executive director of Spruce Lodge in Stratford.
“It’s brutal right now — we are seeing staffing losses pretty much on a daily basis,” said Steven Harrison, CEO of Tri-County Mennonite Homes in southwestern Ontario.
“We have staff who leave work after a 12-hour shift and walk to the parking lot and find someone sitting on the hood of a car saying, ‘Hey, I’m sure it was a long, tough day. Wouldn’t you like to work less and get paid more? No commitment. No schedule.’ That’s very enticing,” Harrison said.
A staffing-shortage survey released Tuesday by Advantage Ontario, the association that represents not-for-profit, charitable and municipal homes, looked at 100 of its member homes and found they spent a collective $6 million on agency fees — each month — from June to September last year.
Of those homes, 34 per cent said they will not be able to meet this year’s incremental hours-of-care increase — an average of three hours and 15 minutes by March 31 — as required by the Ministry of Long-Term Care.
Another 10 per cent were “unsure” if they could meet the 2023 hours of care, meaning the government’s plan for increased time with residents is unlikely to roll out as directed in almost half of the surveyed homes. Advantage Ontario represents nearly 250 of Ontario’s 626 long-term care homes.
Personal support workers hired by homes made between $19 to $30 and sometimes $44 an hour, while agency fees were often more than triple, as high as $99 an hour, the survey results said. One agency charged $150 an hour for a registered nurse, more than double the $60 hourly wage paid to nursing home RNs, a pay rate the survey said is considered at the high end for regular staff.
On average, the survey said registered nurses working for homes made $43 an hour while fees for agency RNs were double at $88 an hour. The average wage of personal support workers employed by nursing homes was $26 an hour while the average agency fees were $45 an hour. And, the average wage for a registered practical nurse (RPNs have less training than RNs) in a home was $31 an hour compared to the agency fee of $67.
Those figures do not include a 35 per cent surcharge called the “agency fee” or extra billing for a COVID outbreak; hotel and car rentals or short-notice staffing requests of 12 hours or less, the survey said.
As staff departures spike and their replacement costs escalate, operators are struggling to meet their budgets. Some are taking out loans or delaying capital improvements in order to pay the agency fees which, in one home, will hit $3 million this fiscal year.
The Star reached out to an association representing temporary employment agencies for comment but did not get a response. Operators say some agencies are reputable while others are “fly-by-night” operations. Many, they say, view the industry upheaval as a business opportunity — fuelled by public money.
Lisa Levin, Advantage Ontario CEO, is calling on the government to restrict the fees agencies can charge.
“We have a health human resource crisis that is really challenging and we’re starting to see that some — not all — but some temporary staffing agencies have taken advantage of this crisis and they are price gouging,” Levin said.
“This is not a good situation, and it needs to be addressed.”
Long-term Care Minister Paul Calandra recently highlighted plans for four hours of daily care when he gave what appeared to be a less-than enthusiastic reception to Canada’s new long-term care standards, saying they could result in a “watering down” of Ontario’s existing standards.
On Monday, Calandra’s spokesperson, Jake Roseman, said the ministry “has heard from some in the long-term care sector that costs related to agency staffing can be a challenge.
“It is an issue we continue to monitor,” Roseman said.
Although some consider the target of four hours to be 20 years out of date — given the increasingly fragile state of those now admitted to long-term care — advocates and industry leaders who’ve long requested the standard still applaud the ministry’s plan, including Levin.
It was announced in fall 2020, after the first deadly waves of COVID-19 swept through homes and exposed dire conditions, including the lonely lives of residents and low wages of the mostly female frontline staff who often juggled jobs in several homes to earn the equivalent of a full-time wage.
Ontario has said it will spend $4.9 billion to increase the average daily hours of direct care for residents by hiring 27,000 new staff, such as registered nurses, registered practical nurses and personal support workers. That includes $673 million for 2022-23.
The amount of time staff spend with residents is supposed to increase incrementally each year until reaching four hours by March 31, 2025. Prior to the first scheduled increase in March of 2022, residents received an average of two hours and 45 minutes of hands-on care each day, the ministry has said.
Now, at least in some not-for-profit, charitable and municipal homes, that promise may go awry.
“At the time (the government) announced the four hours of care I believe their intention was sincere and still is,” Levin said. “But at the time that they put in place the plans for four hours of care, we weren’t having these issues with temporary staffing agencies.”
Bolland, of Spruce Lodge, said he believes the industry will eventually achieve four hours of care, since it’s “something the entire sector supports and has been advocating for, for years.
“Doing it in the midst of a human resource crisis,” he said, “is a challenge. For that to happen, many homes will have to use temp agencies. But the (government) funding formula didn’t factor in the incremental variable of agency use.”
The ministry, Bolland said, needs to “shore up the sector until such time that it can reach the staffing levels with its own people.” There are many reasons for the staff exodus.
The mostly female and immigrant workforce is among the lowest paid in the health-care sector. Staff work long shifts, rushing from one task to the next. After the chaos of COVID, many left for better pay in hospitals, that were dealing with their own staffing struggles.
Municipal long-term care workers often get an additional pay boost from local tax dollars, while not-for-profit and charitable homes rely solely on provincial funding.
Then there’s the trouble created by a good deed. During the pandemic, the Ford government gave PSWs a $3 an hour wage increase, which advocates applauded. Now they say it created resentment among other staff, including registered practical nurses, who have more education but suddenly were making the same money or less than the PSWs they were supervising. “That led to some RPNs leaving,” Levin said.
Ford’s Bill 124 did not help. The 2019 legislation (Ford is appealing a 2022 court ruling that declared it unconstitutional) capped the pay for public health-care workers including those in not-for-profit and charitable homes, while municipal and for-profit homes wages were exempt.
And finally (although some would say this list is not conclusive) many are leaving healthcare altogether.
Harrison, the CEO of the Tri-County Mennonite Homes, oversees two nursing homes, in New Hamburg (near Kitchener) and Stratford. The homes are, respectively, a 15- and 25-minute drive from the dairy community of Tavistock where, about a year ago, a new factory opened and its managers advertised for labourers.
“And I lost 12 PSWs from the frontline to go and work at a cheese factory,” he said.
The PSWs were offered shorter shifts and an hourly rate that was “in excess of anything we could accommodate in health care,” he said. PSWs in his two homes make roughly $25 an hour, including the $3 an hour government boost which is now permanent.
“After two, three years of a pandemic, a lot of stress and short-staffed situations, people are exhausted and they’re leaving. We’re seeing this from leadership positions all the way through to frontline service delivery,” he said.
“It’s a sloppy recipe, let’s put it that way.”
The reliance on agency staff was not anticipated a few years ago.
Tri-County Mennonite Homes runs two long-term care homes with 150 residents along with two private-pay retirement homes. It has an annual budget of roughly $24 million.
In the year before the pandemic hit, Harrison said he budgeted $125,000 to $150,000 for agency staff, almost all for the long-term care homes. That number rose to $250,000 in the 2021-22 fiscal year, as outbreaks across the province continued and staff started leaving.
In the 2022-23 fiscal year, Tri-County Mennonite Homes budgeted $300,000 for agencies.
But this time it was different. Staff left and the home couldn’t recruit new workers.
Now, six weeks before the end of the fiscal year on March 31, Harrison said staffing agency fees will cost $3.1 million — ten times higher than expected. Ninety-three per cent of those costs, he said, went to agency staff in the long-term care homes.
“And, we know what we’re doing,” he said. “Our organization has been around for 50 odd years. We know how to do this but we’re struggling, we can’t recruit and we are losing staff. And some of those staff that we’re losing are being preyed upon in the parking lot by agencies.”
That $3 million expenditure has to come from somewhere.
“We’re deferring capital repairs and renovations to our properties. We have no choice. I mean, when it comes down to it, the money’s not there. And then the other thing that we’re doing, which is everyone’s nightmare, we’re living on borrowed money. We’re taking out a loan.
“That’s like borrowing from a MasterCard to pay a Visa,” he said. “It’s not sustainable at all.”
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