New travel nursing report featured in Fierce Healthcare, McKnight’s Long Term Care News
November 18, 2022
A new report, “Profiting in Crisis: Exploring Private Equity’s Investments in Travel Nursing Amidst a Critical Nursing Shortage and a Pandemic,” authored by PESP researcher Mary Bugbee is seeing coverage in multiple medical news publications.
Fierce Healthcare October 17, 2022: Amid travel nursing rate spikes, a ‘record-breaking’ number of PE investments deserves scrutiny: report
McKnight’s October 17, 2022: Danger lurks amid private equity investment, influence on staffing agencies: report
Since the beginning of the pandemic there has been an uptick in travel nursing, accompanied by record levels of private equity activity in the medical staffing space. With this in mind, Mary Bugbee explored the current nurse staffing crisis, the travel nurse industry, and the increased private equity investments the sector is seeing.
Both publications focused on the record-breaking number of PE transactions and investment in the travel nursing industry and staffing agencies in general. McKnight’s also honed in on the tight margins medical facilities have faced as they use staffing agencies to bolster their nursing staff:
“Nursing homes and hospitals have paid much more for agency staffing than in-house employees throughout the pandemic; the expense squeezed already tight margins, especially as nurses left to make more money with agencies. Though that trend has waned, many providers are still reliant on agency staff to remain operational.”
The new report investigated these trends, especially the effects private equity investment would have on an already volatile industry.
“Private equity firms were already investing in travel nursing and other types of medical staffing companies prior to the COVID-19 pandemic,” Bugbee said. “As a fragmented industry with considerable opportunities for consolidation, this sector has been attractive to private equity. Plus, the combination of an aging population and long-term projected shortage of nurses to meet the needs of this population has also attracted investors.”
The lack of transparency and disclosure remains a concern for PE’s involvement in travel nursing and staffing agencies in general. Private equity has brought more volatility to the sector with rate hikes and cost-cutting measures aimed at generating quick profit. These rate increases that have benefited investors have also led to other industry-wide difficulties.
Fierce Healthcare reported, “Healthcare industry groups and lawmakers alike have called for regulatory action against what they described as price gouging, which they say left many providers high and dry since the end of relief funding.”
“Various policymakers and the hospital industry have called upon federal and state agencies to investigate travel nursing agencies and their rate hikes during the pandemic,” Bugbee said in her report. “Unfortunately, current regulations and enforcement of those regulations have been insufficient to contain costs and address the acute labor shortage within our healthcare system.”
