‘A vicious cycle:’ Regional hospitals spending $32M on for-profit staffing

A new report is revealing just how much Waterloo-Wellington hospitals are spending on for-profit staffing, showing costs of $31.9 million across 2022 and 2023.

It all comes from a new research report from the Canadian Centre for Policy Alternatives (CCPA), which details the 288 per cent increase over a 10-year span for the region. That compares with the province as a whole, which spent a collective $9.2 billion from public hospitals during that time.

“The use of for-profit staffing agencies is part of a vicious cycle that hollows out the public sector workforce, thereby increasing hospitals’ dependence on private agencies,” said Andrew Longhurst, research associate with the CCPA and author of the report. “The government must take a range of measures to resolve this crisis, but central to that is increasing hospital funding.”

The report states that the sizeable increase towards private staffing agencies “shows a correlation between the dramatic growth in agency usage and underfunding of public hospitals over the last decade.”

It was noted that Ontario’s per-capita funding for hospitals is the lowest across the country.

“The wasteful public spending on private agencies would have never emerged as a problem if Ontario’s investments in employed hospital staff kept up with patient needs,” Longhurst stated.

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While local hospitals in the region are seeing these substantial increases, it’s not alone as all but one of the 14 regions across Ontario are said to be facing similar difficulties. The reports said this is leading to frequent emergency room closures, long wait times, and a decline in community care.

Much of the issue stems from overall increases in job vacancies as the public sector workforce at local hospitals has increased by 330 per cent since 2015, all coming from increasing workloads and considerable wage cuts, the report states.

“Saving our hospital services requires an investment in the staff who deliver them,” said Michael Hurley, the president of CUPE’s Ontario Council of Hospital Unions. “The government must commit to staffing standards, including nurse-to-patient ratios to ensure manageable workloads, which would allow staff to provide care to the best of their abilities, improve morale and retention, and help stabilize the system.”

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Longhurst stated that rising demand, increasing agency costs, and an overall lack of provincial funding have led to the key issues, resulting in upwards of half of all provincial hospitals facing budget deficits in 2023-2024, and a majority of those expected to be in arrears this year.

He recommended that the province follow suit with British Columbia, which institutes a public sector staffing strategy to provide better relief to struggling hospitals, while working to phase out for-profit spending and private agencies.

Other alternatives were listed as including the development of a more encompassing health care staffing strategy, as well as investments in hospital services by as much as $2 billion annually.

Response from the Ontario Ministry of Health

The Ontario Ministry of Health has responded to some of the numbers coming from the recent report, working to call into question some of the details listed by the CCPA.

“The CCPA report inaccurately groups agency staffing costs with a broad range of purchased services and is, as such, blatantly misleading the public,” said Spokesperson for the Minister of Health, Ema Popovic. “The Ontario Hospital Association has reviewed the report and is now officially calling on the CCPA to withdraw it.”

While the research report raises concerns around the numbers for for-profit agency staff, the Ministry of Health stated that they account for less than 2 per cent of total hospital hours. It also added that over 97 per cent of nursing graduates enter the public workforce.

“The CCPA report inaccurately groups agency staffing costs with a broad range of purchased services and is, as such, blatantly misleading the public,” said Spokesperson for the Minister of Health, Ema Popovic.

“Since 2018, our government has registered a record 100,000 new nurses, with 30,000 more currently studying in Ontario. We’ve directed the College of Nurses of Ontario to reduce barriers for internationally educated workers, expanded the Learn and Stay Grant to support nursing students, and launched the first new nursing program in over 20 years.”

It also looked to address some of the concerns and recommendations coming from the CCPA report, saying legislation is already in the works to bring further clarity to regional hospitals across the province.

“Last week, our government introduced legislation that, if passed, will create a transparency framework for staffing agencies in the hospital, long-term care, and community health sectors to disclose administrative mark-up rates.”