Iowa Nursing Homes Threatened by Price Gouging

Imagine if you’d been charged $26 per roll during the great toilet paper shortage in the pandemic’s early days. Imagine the outcry.

That didn’t happen because price gouging laws prohibit overcharging for necessities during public emergencies. Yet those laws don’t say a word about the price of services.

So health care staffing agencies are now price-gouging nursing homes to the point of closing.

That’s right: Government protects you from overpaying for toilet paper but hasn’t shown the political will to stop the highway robbery of Iowa’s most vulnerable seniors, who deserve consistent, committed caregivers. 

The health care worker shortage was dire before the pandemic. Since then, nursing home employment nationwide has declined a whopping 420,000 positions or 13.2%. Many, understandably, burned out from the stress of protecting residents from a deadly virus.

Sadly, unscrupulous agency owners have viewed this crisis as a money-making opportunity. They lure workers with higher wages, then charge that amount back to providers with huge mark-ups. 

Wait, you ask: Don’t nurses, aides and support staff deserve more pay?

Absolutely. At Western Home Services, a network of Iowa long-term care providers for which I am CEO, we used one-time federal pandemic funds for hourly hazard pay, attendance bonuses, vaccination bonuses, and social distancing pay to reward the sacrifices made off-hours to protect residents.

Yet when we recently raised direct care wages another $2 per hour, our third hourly increase in the past 16 months, one agency promptly advertised a $10 per hour hike — which they’ll pass right back to us.

That’s on top of the $4.9 million in agency fees we paid in 2021 for about 25% of our workforce.

I’ve got more choice words than price gouging to define this game agencies are playing.

They don’t balance their budgets on Medicaid reimbursements that don’t fully cover the cost of care. Most don’t provide any employee benefits. They don’t pay for ongoing education or the required masks, gowns and gloves.   

Agencies don’t pay for overhead that we invest to replace institutional nursing homes with new construction and innovative care models to create the optimal environment for working and living. 

And they don’t carry the liability. If an agency employee makes a mistake, we’re responsible. Government surveyors inspect and fine nursing homes, not staffing agencies.

Agencies aren’t measured by quality outcomes for residents, posted on public websites. 

Agencies used to provide a helpful service of filling occasional holes. Now those long-time agencies have to compete with greedy operators who have dollar signs as motivation. 

Then there's this irony: Agency employees tell us they love assignments in our communities. Why wouldn’t they? Our employees work hard to build a strong workplace culture. 

By choosing agency work, those who admire and appreciate what we’ve built are helping tear it down.

Lawmakers can’t wait any longer to act.

Many providers, ourselves included, have limited the number of new nursing home admissions; some have closed and more will surely follow if this unfair labor practice isn’t stopped. 

Iowa’s seniors soon won’t be able to find or afford the care they need, and what they do get won’t be the quality they deserve.