Manitoba slashes private nursing agencies: The path forward or a policy stumble?

The Manitoba government’s efforts to phase out for-profit staffing agencies is the right move. In Manitoba and across the country, these private agencies have been found to be much more costly than hiring staff directly into the public sector. It is also highly corrosive to morale when agency staff are making upwards of 30-50 per cent more than public sector staff. Agency staffing also introduces risks to patient care and safety when there isn’t stability and continuity in staffing. For-profit staffing agencies create a cycle of parasitic dependence by hollowing out the public sector workforce. The provincial government is smart to try to end this cycle of dependence before for-profit agencies become more entrenched.

The Manitoba government is experiencing the challenge of putting this genie back in the bottle. It is not surprising that there are staffing challenges winding down private agency use. This is to be expected. The government and health system employers face no easy task, but they are on the right track. These challenges highlight the importance of focusing on public sector recruitment and retention and strong workforce planning, which includes the welcome addition of an in-house travel pool to help with staffing needs, especially in rural Manitoba. The provincial government and public should keep in mind that it took years for the workforce crisis to get to this point, and it will take some time to turn the situation around.

Once viewed strictly as a last resort, private nursing agencies were meant to temporarily fill staffing gaps in hospitals only when no other options existed. They were never intended to become a permanent fixture in health care.

In recent years, however, Ontario’s health-care system – across all sectors – has increasingly and willingly come to rely on for-profit staffing agencies, enriching shareholders at the expense of public care.

In fact, during 2022-2023, one Ontario hospital spent $8 million on agency nurses in its emergency department alone, an extraordinary and troubling use of taxpayers’ dollars.

The Ontario Nurses’ Association has been unequivocal in its opposition to nursing agencies. Its pre-budget submissions have repeatedly and clearly called on the Ford government to phase them out.

Nursing agencies represent yet another step toward the privatization of Ontario’s health-care system, siphoning scarce public funds away from patient care. Agency nurses are often paid two to three times the hourly wage of public-sector nurses, a disparity that has deeply demoralized nurses who have remained committed at the bedside.

There are also serious consequences for patient care. While agency nurses are fully qualified, they cannot provide the continuity of care that permanent staff nurses deliver. Patients are best served by public-sector nurses who know their patients, residents and clients.

The only real beneficiaries of nursing agencies are the private, for-profit owners.

ONA applauds Manitoba’s call to ban nursing agencies and urges the Ford government to follow suit.

Overall, I don’t think Manitoba made the right call (and they seem to agree, since they have already walked back the policy to add flexibility). Agencies exist to provide temporary staff to fill shortages and can be particularly important for rural and remote locations, covering weekends, and other persistent staffing challenges.

Manitoba is not alone in seeing significant growth in the use of staffing agencies in public health care settings. Still, it does have a relatively high proportion of nurses working with agencies (second-highest, 22.7 per cent of nurses). The number of agencies that each health region contracts with is higher than most regions in Canada, except Quebec. The province can use competitive bidding processes to reduce the number of agencies providing services to public health facilities. Doing so can create savings but also creates short-term disruption and doesn’t increase the total nursing labour supply.

Reducing the number of agencies creates short-term disruption for hospitals and nurses by reducing flexibility. Many of the nursing agencies that were not selected to provide public services will reduce staff or possibly be forced to shut down operations altogether (forcing nurses to find new jobs and reducing the number of companies that could compete for government service provision contracts in the future). The key factor here is that it does nothing to increase the total supply of nursing hours or meaningfully address the staffing gaps that agencies are filling. Simply switching which agencies provide services does not increase the volume of services, nor does it give hospitals a more permanent way to address persistent staffing challenges.

Hourly wages for agency nurses are lower in Manitoba than in other provinces, meaning that the savings the government can achieve are likely limited. Reducing hourly wages further makes entering the nursing profession less attractive and could contribute to nurses leaving the profession or moving to other provinces for higher incomes. It’s also worth noting that wages for agency nurses being higher does not necessarily mean they are better compensated than full-time hospital staff, who also likely receive extended health-care benefits, paid vacations, sick leave and retirement plans that agency workers do not.

Like a fever to a virus, agencies are an obvious symptom that something in the health-care system isn’t working as it should, but also helpful to fighting the problem for which they are a symptom. The disease is persistent staffing challenges in public health-care settings. If the government would like to reduce dependence on agency staff, policy should focus on increasing the total supply of nurses and addressing hospitals’ recruitment and retention challenges. If there were no persistent staffing gaps, the hospitals and long-term care facilities wouldn’t need to contract with agencies (regardless of how many agencies might be available).

Drawing on decades of my work and from other leaders, it is clear that Canada’s continued reliance on travel and agency nurses represents a costly and unsustainable response to workforce shortages that were anticipated many years ago. Provinces and territories are spending extraordinary sums on agency nurses, diverting funds away from proven evidence-informed investments in the permanent and sustainable solutions that can strengthen our nursing workforce.

While there is still mixed evidence on whether agency nurses impact positively or negatively on issues such as patient safety, quality of care, etc., there is good evidence that nurses who work in well-established team-based care models do well. This speaks to the importance of strengthening and sustaining our teams that include our nurses.

Agency nurses often work alongside nurses employed by health-care organizations while earning substantially higher wages, selecting preferred shifts and working fewer hours. This creates tensions, inequities within teams and contributes to burnout among permanent staff who carry the burden of continuity, mentorship and organizational knowledge. We also know from evidence and the work that I have done that new graduate nurses need a robust transition to practice and at least a year to reach the same level of productivity as experienced nurses. As a result, rotating casual and agency nurses requires repeated orientation and supervision, reducing overall team productivity and placing additional strain on already exhausted staff.

Sustainable staffing is essential for continuity of care for patients and families. While travel nurses may choose this work for valid personal reasons and often report high satisfaction, they are far less likely to accept permanent full-time positions in rural, remote or underserved communities.

The evidence is clear: retention, professional development, wellness supports and meaningful incentives are far more effective than agency reliance. If governments are serious about reducing expenditures on travel nursing, they must reinvest those funds into strategies that make nurses feel valued, supported and able to practice to their full scope within strong interprofessional teams.

At this point, the question is not whether we know how to address shortages – we do. The call to action is for governments to partner with nurses, unions, patients, and communities, take informed risks, evaluate innovations and redirect funds away from agency staffing to invest in our nurses, those who are in the system, those who are graduating. Invest in their education, retention, incentive to work in rural communities, in professional development, in their health and well-being. Evidence in all of this is strong and should be done already. Short-term and stop-gap measures are not sustainable.

Manitoba has done a lot to try to move away from private agencies and I commend their move.

However, it seems like they need to do a bit more work before they take this drastic step. What they’re proposing is coming from 80 agencies down to four and then asking the nurses that work for the current agencies to either choose one of the four agencies, or move to the provincial travel nurse program, which is the public system float pool.

When I wrote the report for the Canadian Federation of Nurses Union on the use of agencies, one of our four recommendations was to cut ties with agencies. But we made it quite clear that a plan had to be put in place before you did that, otherwise it would put the system into chaos.

Because private agencies are being used to fill shifts and to provide necessary care, you can’t just take that away all of a sudden. It seems that Manitoba put a lot of work into thinking about this, but maybe it was a push that came too soon and the system wasn’t ready for a total cut the way that it did initially. It needed to only implement this in certain regions that were more prepared for the shift, rather than in all the regions where it resulted in significant concerns about unfilled shifts and understaffing. That’s just going to create more issues. We need to see a more gradual approach.

In Ontario, we absolutely should be following Manitoba’s model; they are one of the few provinces that has a provincial nurse float pool that’s under the public system where nurses have an option to work and have similar flexibility as they would within a private agency. But because it is still in the public system, it doesn’t cost taxpayers nearly as much as it does to hire private agencies. B.C. and Manitoba have done this and I think every province should follow suit.

The hospitals in Ontario are projecting a $1 billion deficit over the next year. We need to find every possible way to save money, but to do that, we need to have nurses to fill positions and not just leave units understaffed. This is going to mean a gradual approach that involves getting rid of agencies. Governments, like Manitoba’s, are trying to do that but it’s challenging.

In a lot of ways, it’s a step in the right direction to move away from the privatization of our human resources in health care. It speaks loudly to the fact that instead of undermining our public health-care system, we need to reinforce it.

I’ve always said that having a realistic human resource plan doesn’t include us paying millions of dollars to private nursing agencies that do nothing to enhance public health care. In Alberta, these agencies are being used all the time to fill gaps instead of using the huge human resource departments that they have in our public health-care system to hire people.

The crux of the problems in our health-care system is the lack of human resource planning, the short staffing and the underfunding, and the under-valuing of our nurses in the public health care system. I don’t blame nurses for wanting better wages, but that should not come from outside of the public system.

It’s very clear that outsourcing through private clinics and companies that make tons of money off our tax and health-care dollars is not solving anything. It’s putting a Band-Aid on a problem that has been there for years now, so kudos to Manitoba for taking a stance and moving away from that.