This article has been updated to incorporate additional comment from the Oregon Health Authority.
Reacting to lingering staffing shortages and concerns of temp agency price gouging, Oregon state officials are capping the hourly wage of temporary nurses and other health care temporary workers. But new rules taking effect in January have prompted mixed feelings for an influential backer that helped design the new program — the Oregon Health Care Association, a long-term care industry trade group.
In 2023 the Oregon Legislature passed a law backed by senior living advocates, hospitals, the long-term care industry and others that was intended to cap rates charged by temporary staffing agencies that had skyrocketed during the COVID-19 pandemic.
On Nov. 26, despite strongly worded criticisms from the long-term care industry group, the agency issued rules that will cap the rate temp agencies can charge at, for example, $131.95/hour for registered nurses at hospitals and $42.23/hour for certified nursing assistants — with a 50% bump for overtime and holiday work.
Additionally, hospitals and other health care workplaces are free to ask the state for waivers to pay more than those limits.
“OHCA brought forth the bill that created this program and, overall, we are pleased to see it go into effect next year,” according to comments a spokesperson for the long-term care industry group issued to The Lund Report. “However, we remain concerned that OHA’s underlying rate methodology supports what ends up being a 52 percent markup on some healthcare labor for temporary staffing agencies.”
New temp rates would significantly exceed average pay
On average, registered nurses in Oregon earned about $55 an hour as of a year ago, according to the Oregon Center for Nursing.
But while that wage is better than in many states, hospitals around the state continue to struggle to expand staffing in light of a hospital nurse staffing law adopted last year.
The high cost of temp nurses to meet the new staffing law is driving millions of dollars worth of unexpected costs at the state’s main psychiatric institution, the Oregon State Hospital, for instance.
In the face of the continuing shortages, some employers hoped setting lower wages for health care temps would slow the rate of permanent staff quitting to take higher-paying temp jobs.
“Too much reliance on temporary staff,” supporters wrote in support of House Bill 2665, “destabilizes the workforce and is inequitable to permanent staff employed by hospitals and long term care facilities.”
The law also empowered the state to investigate complaints filed against health care temp agencies.
Critics predicted the new program could drive down wages and fuel continuing staffing shortages, citing issues that arose in two other states that had already put similar rules in place, Minnesota and Massachusetts.
In August, after conducting statistical research and interviews with employer groups and unions, Oregon Health Authority officials issued proposed rates that would cap what agencies could charge for a half dozen job descriptions.
But those rates were too high, the Oregon Health Care Association wrote in comments last month. “OHCA is concerned that in calculating this factor, OHA utilized data collected during the height of the COVID-19 pandemic when temporary staffing agencies engaged in predatory pricing practices that allowed them to artificially inflate the wage differences between temporary staff and permanently employed workers,” wrote the group’s Eugenia Liu, the association’s senior vice president and general counsel.
Not only that, she added, but the agency’s adjustment to the base wages amounted to a 52% markup over any wages paid: “What OHA has chosen to do is essentially prioritize the profit percentage for temporary staffing agencies.”
The rates the state finalized this week keep those rates in place, and the state also wrote in additional clauses benefitting employers that felt they needed a waiver to let them pay higher rates—a priority of the Hospital Association of Oregon.
A state spokesperson said the state used federal data from 2023, after the pandemic, to calculate its rates.
The Hospital Association of Oregon did not respond to a request for comment.
The final rules were also changed so that any waiver requests made by employers hoping to pay rates higher than the maximums could be confidential and not subject to public disclosure. Transparency had been required under the earlier proposed rules.
In an Oregon Health Authority email announcing the new rules intended to help employers, the team that crafted them stressed that “OHA is mandated to conduct annual reviews of these rates in the future ... to ensure that the rates remain fair, effective, and reflective of current economic realities.”
The email added, “We understand that consistent and predictable rate structures are crucial for your planning and operational activities. By providing this finalized rate structure and committing to regular evaluations, we aim to support your strategic needs and respond to evolving market conditions appropriately.”
It’s the future changes that the Oregon Health Care Association is pinning its hopes on, writing to The Lund Report that its leadership hopes its concerns “can be addressed in future reviews.”
Clarification: This article has been modified to reflect comment from an Oregon Health Authority spokesperson that although the final state rules removed the requirement for disclosure of waiver requests, some could be disclosed under certain condditions.