For-profit agencies have become the go-to solution for many healthcare organizations’ staffing shortages.
New research led by Joan Almost, a professor at Queen’s School of Nursing, in collaboration with the Canadian Federation of Nurses Unions (CFNU), has revealed a significant issue impacting Canada’s healthcare system: the rapid rise in public health spending on for-profit nursing agencies.
The study, Opening the Black Box: Unpacking the Use of Nursing Agencies in Canada, outlines several recommendations to address this costly trend. Almost calls for governments to phase out the use of private, for-profit nurse staffing agencies in Canada. In the interim, stronger regulations and oversight should be implemented to ensure transparency and prevent price-gouging.
Spending on for-profit agencies is expected to hit $1.5 billion in the 2023-24 fiscal year—a six-fold increase from $247.9 million just three years ago, the study shows. “The pace of this increase is shocking,” Almost said in an interview with The Journal.
According to Almost, the shift to relying on these agencies has been largely fuelled by the COVID-19 pandemic, which left healthcare systems scrambling to fill staffing shortages that had been growing for many years, even before the pandemic.
Even as the crisis phase of the pandemic wanes, the trend has continued. What’s more alarming is the fact this figure only scratches the surface. Almost emphasized due to a lack of transparency and available data, the real spending could be much higher. “The $1.5 billion is just the tip of the iceberg,” she said.
According to Almost, this surge in spending isn’t just a financial issue—it’s disrupting the healthcare system and affecting the quality of care.
“The use of short-term contracts and frequent turnover impacts team morale, workload, and unit culture. It disrupts the continuity of care, especially in long-term care settings where patients value seeing familiar faces. Agency nurses don’t have the same knowledge of unit policies, resources, or patients, which can cause confusion and affect the continuity of care provided,” she said.
Almost highlighted the for-profit nursing sector operates with little to no oversight.
“We saw wide variation in the hourly rates being charged by agencies. In some cases, we saw contracts that had no ceiling on rate increases. This leaves healthcare employers in a bind when agencies decide to hike up rates unexpectedly, forcing them to choose between paying more or leaving units understaffed,” Almost said.
Almost’s research found this lack of uniformity makes it difficult to monitor spending and ensure that taxpayer dollars are being used effectively. Some provinces provided comprehensive data for the study, while others were unable to provide complete information, pointing to the need for a standardized regulatory framework.
Without intervention, the continued reliance on for-profit agencies could have severe long-term consequences. Almost said some hospitals are taking out loans just to pay for staffing.
According to Almost, healthcare organizations should focus on addressing the root causes of the nursing shortage through better retention and recruitment strategies.
“Right now, it feels like we’re just slapping a Band-Aid on a gaping wound,” Almost said. “We need to put a cap on what these agencies can charge and hold them able.”
One promising model cited by Almost is Manitoba’s government-run nursing agency, which offers nurses flexible schedules and the ability to work in hard-to-fill areas while still being part of the public system. According to Almost, “it’s a step in the right direction.”
Almost hopes her findings will serve as a wake-up call to policymakers.
“The public needs to push their representatives to implement the recommendations we’ve outlined. This is a critical issue that impacts not just the healthcare system, but the quality of care Canadians receive,” she said.
Findings from this study will be presented at the meeting of health ministers in Halifax from Nov. 13 to 14. Almost hopes the study will spark a national conversation on sustainable staffing solutions and prompts the federal government to take concrete steps in regulating an industry that operated largely unchecked for too long.
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