Anytime someone sells a good or service and artificially raises the price to an unreasonable level, it is considered price gouging.
We are seeing in the long-term care sector that many bad actors are taking advantage of the pandemic workforce shortage by drastically raising rates for caregivers. AmSA is concerned about this unscrupulous tactic since it plays a direct role in driving up the cost of care for our older Americans.
The pandemic has created a massive shortage in the health care workforce and the staffing agency industry is taking advantage of the crisis by excessively raising prices for these workers. Like a shark, the staffing agencies smell blood in the water and have gone in for the kill. Prior to the pandemic, nursing homes relied on staffing agencies as a last resort due to their fees and reduced quality care. However, during the outbreak providers have had to depend on the agencies more since many members of their workforce came down with illnesses.
On many occasions, the providers end up paid two times more than the hourly rate for staffing needs. As a result of the scheme perpetrated by the staffing agencies, the provider will be forced to increase their costs for care on their residents. This is price gouging at its worst and there is nothing we can do about it without any staffing agency oversight!
Many Attorneys General have issued price gouging alerts during recent hurricanes, tornadoes, and COVID-19. For example, on September 15th, 2020, Alabama Attorney General Steve Marshall urged citizens to be wary of price gouging. The Attorney General Marshall informed citizens the law is in effect when the Governor declares the State of Emergency to prohibit the "unconscionable pricing" of items for sale or rent. No matter what causes the crisis, bad actors seem to come out in full force anytime Governors issue a State of Emergency. With staffing agencies taking advantage of elderly citizens who are desperate for care at health care facilities, nursing homes, and assisted living communities, this certainly is price gouging.
According to Bureau of Labor Statistics data, the nursing home sector has lost a quarter-million jobs during the pandemic or 14% of its workforce since March 2020. Not only are long-term care facilities dealing with caregiver burnout, but the billions of dollars providers spent fighting the virus and chronic Medicaid under-funding have caused significant operational challenges.
With the nursing home industry facing severe staffing shortages, they are exploring innovative solutions to find caregivers, including calling on state and federal officials to help out. When asked about the staffing agencies price gouging tactics, Moe Freedman, President of Illinois based-Accolade Healthcare told Skilled Nursing News, "One entity is heavily regulated and held accountable for patient care, and rightfully so, and the other entity is price gouging and has no accountability at any regulatory level and they are the ones providing patient care." Freedman added, "We're fighting an uphill battle right now. There is no oversight of the agencies, on top of the fact they are price gouging us."
The workforce shortage continues to function at crisis levels and it appears to have many providers on the verge of collapse. It is time for solutions for these major problems! Providers can't withstand the outlandish rates being charged, sometimes up to 4 times what they pay their staff. We hope our public officials will focus on this anti-competitive staffing agency scheme that has put untold pressure on those providing care for our older vulnerable population. Price gouging is bad for the consumer, bad for business, and is driving up the cost of care.