Michigan is joining at least 15 other states in an attempt to tamp down the high costs of contract travel nurses, even as demand for healthcare workers continues to grow post-pandemic.
Earlier this month, Republican Rep. Sarah Lightner introduced House Bill 6364, which would limit travel nurse agencies to charging hospitals no more than 25 percent above what the agencies pay their nurses.
The intention of the legislation is not to punish nurses, but to limit how much money these contracting agencies can make off them, Lightner told Crain's.
The healthcare industry says travel nurse agencies exploited the COVID-19 pandemic for billions of dollars. That gold rush is largely over as the coronavirus crisis has settled down, but now many states want to prevent a repeat as the industry struggles to make ends meet in a post-pandemic world.
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There are plenty of challenges ahead. Legislators are running out of time as only a few legislative days remain ahead of the Nov. 8 election. At the same time, experts are questioning whether the law would even be effective at reducing costs.
Crain's reached out to nearly a dozen national and local travel nurse agencies and did not receive a call back.
Travel nurses made headlines across the U.S. during major surges of the COVID-19 pandemic as many nurses quit their jobs for short-time contract work through an agency where they could double or even triple what their counterparts employed directly by health systems were earning.
Locally, travel nurses were making as much as $5,000 a week, or as much as $100 an hour, as hospitals and nursing homes struggled with staffing shortages during the pandemic. The staffing agencies reportedly were charging facilities as high as $200 per hour.
Local hospitals and health systems saw labor costs rise rapidly — travel nurses made up 39 percent of hospital nursing budgets in January of this year, up from just 5 percent in 2019, according to the American Hospital Association.