Why the travel nurse shortage continues as wages decrease

By Joe Hannan | Fact-checked by Barbara Bekiesz
Published November 2, 2022

Key Takeaways

  • Travel nurses are caught between staffing firms that are cutting their rates and hospitals that have demanded rate cuts after COVID relief funds dried up.

  • This ongoing dispute is indicative of a larger problem in the nursing workforce, chiefly, how hospital-based nurses are managed and paid, an expert said.

  • Solving this problem may require new approaches to how nurses are deployed—potentially approaches that are not market-driven.

A bitter feud is playing out between travel nurse staffing agencies and healthcare administrators. Mounting evidence suggests that travel nurses—a critical bulwark of the COVID-19 response—are caught in the middle.

How did we end up here? According to one expert, beyond the effects of supply and demand on the nursing workforce are larger unanswered questions about trends within the nursing profession.

What’s going on?

After robust wage growth for travel nurses throughout the COVID-19 pandemic, pay has begun to dip, according to an October 2022 report from Vivian Health, a national hiring marketplace.[] In September 2021, travel nurse wages in about half of the country were up by more than 10%.

Compare that with September 2022, when 38 states saw wages decline by at least 1%.

Declines ranged from 1% in Montana ($2,470 per week in July down to $2,447 in August), to 15.4% in Maryland ($2,125 in July down to $1,842 in August).

According to Vivian Health, less severe cases of COVID-19 and fewer COVID-19–related hospitalizations are driving the downturn. Fortunately, the days of critically ill people packing EDs and filling hospital beds are hopefully behind us.

Regardless, the US still confronts a nursing shortage. The healthcare system is projected to need more than 275,000 nurses by 2030, with job openings growing at a rate of 9%—outpacing all other professions from 2016 to 2026.[]

But without COVID-19 relief funds to subsidize the cost of travel nurses, healthcare systems are back to operating on leaner staffing margins. Travel nurses may be seeing the waning days of the pandemic-driven gold rush.

What has changed?

Travel nurses find themselves caught between staffing agencies and healthcare organizations.

A September 2022 Newsweek report contained anecdotes from nurses who were contracted by staffing firms at one rate, only to see their rates reduced by up to 60% while still under contract.[]

While staffing firms point the finger at hospitals for demanding lower rates, healthcare organizations object, saying that it’s the staffing agencies that ultimately set the rates.

Many irked RNs are taking legal action. According to Newsweek, hundreds of nurses have joined class-action lawsuits over wage cuts that range from 25% to 70%.

From the front lines

Shannon, a former travel RN working in Michigan, told MDLinx she is not surprised. [Note: Her last name has been withheld to protect her from potential reprisal.] Shannon said that she gave up on travel nurse work at the start of 2022, electing to work per diem with a major regional healthcare system. Her decision to leave travel nursing behind can be summed up in two words: corporate greed.

“Middleman agencies were taking, on average, 40% of the hospital’s bill rate for themselves—sometimes upward of 60%—and paying RNs who had basically worked in war-zone-type settings for 2 years less and less,” Shannon said.

Along the way, she encountered agencies that would not pay for such things as 30- to 60-hour mandatory training sessions; they also docked tax-free living stipends if RNs called out sick or requested days off, and they engaged in the bait-and-switch tactics described in the Newsweek investigation.

"I—and many nurses—will never go back to regular staff because COVID fundamentally changed nursing and what we will tolerate."

Shannon [last name withheld], former travel RN

“The hospitals’ greed brought about the current staffing issues that were exacerbated by COVID,” Shannon continued. “Over the years, they cut staff to the bare bones, expecting nurses to do more with less staff and supplies in the name of profit, and those chickens came home to roost.”

Bigger problems

Shannon’s view from the front lines of healthcare appears to be aligned with greater trends in the nursing workforce.

According to Patricia Pittman, PhD, solving the problems that underpin these trends requires rethinking healthcare altogether. Pittman, director of the Fitzhugh Mullan Institute for Health Workforce Equity at George Washington University, said that the solution begins with addressing how we pay hospital-based nurses.

"Because we pay for nurses as part of room and board and we don't acknowledge their value in the payment system, we are basically incentivizing hospitals to increase their margins by having very lean staffing."

Patricia Pittman, PhD

“And the way that they have been able to manage having very lean staffing is by creating this subsidiary industry that we call the travelers industry,” Dr. Pittman added.

Dr. Pittman explained that travel nursing was created to solve entirely different problems, chiefly regional surges in healthcare demand (such as for Mardi Gras in New Orleans in the 1970s) or when regional disasters strike. It worked well in the early days of COVID-19 when it was a regional crisis largely based in New York. The cracks began to show after 2 years of a nationwide pandemic.

“They created a beast that has come back to bite them,” she said of hospitals and healthcare systems. “It’s not really the travel nurse industry’s fault. They’re responding to basic core incentives, or how markets work in the healthcare workforce. We should, as a country, be thinking about whether we want markets to be the ones that control how we deploy the healthcare workforce.”

What's to come?

The present moment is an opportunity for healthcare systems to evaluate how they’re staffing, Dr. Pittman said. Some large, regional healthcare systems (like the one Shannon works for) have established their own travel nurses who bounce between facilities.

But will this lead to meaningful change? Dr. Pittman wasn’t sure.

"My hope would be that there’s some sort of deep lessons to be learned from why this happened."

Patricia Pittman, PhD

“It’s not clear to me that [hospitals] are really understanding the gravity of this nurse workforce conundrum,” Dr. Pittman continued. “It’s time to take off the blinders [and] start talking to the chief financial officers about how they do their algorithms when they think about how to manage the nurse workforce.”

Dr. Pittman also speculated on how the current demand for travel nurses could ultimately impact the future of the nursing market.

“I think there's a lot of thinking ahead about how the hospital industry is going to consolidate—who's going to close and who's going to grow—and a lot of thinking that they can hold out and not address the nursing shortage in a long-term, serious manner,” she said. “They're thinking that either because of the recession, nurses are going to come back, or because rural hospitals are closing like crazy, there will be more nurses available. They're banking on turning the corner here, on the pandemic being over and hospitalizations reducing.”

What this means for you

Clinicians who find themselves in the thick of the nursing shortage may not be seeing relief anytime soon, as lawsuits brought by travel nurses, along with potential workforce changes, slowly play out. Complicating matters are broader workforce trends. Labor market conditions may bring nurses who left the workforce back in.

Read Next: How is the boom in traveling nurses affecting healthcare during the pandemic?
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