It was against my better judgment getting caught up on my reading of the healthcare trades on Thanksgiving. I had planned a day of reflection and introspection and reading healthcare industry news invariably causes my blood pressure to rise and my plasma to boil. Regretfully, my morning coffee is enhanced if accompanied with some reading. I threw caution to the wind and stumbled on something that triggered me.
It was this story about Senators Bill Cassidy, MD (R-La), and Mark Kelly (D-Ariz), and Reps. David McKinley (R-W.Va) and Doris Matsui (D-Calif) writing to Covid czar Jeffrey Zients asking him and other agencies to investigate the American Hospital Association’s complaints that nurse staffing agencies were using the pandemic to price gouge hospitals with exorbitant fees to supply them with nurses. The AHA posted the letter on the advocacy section of its website.
I recently posted a commentary about how the hospital industry’s complaints about being gouged by nurse staffing agencies is akin to the proverbial child who kills both his parents and then asks pleads for mercy because he is an orphan. The nursing shortage was years in the making, and while covid accelerated the situation, the crisis is the hospital industry’s own doing.
It’s the result of hospital managements treating and paying nurses poorly for years and ignoring their pleas that stretching their patient ratios to boost profits was imperiling safety. When nurses increasingly began to organize to make their concerns known, hospital managements spent millions on union busting consultants to intimidate and frighten them.
Nurses can make more working for a staffing company and demand better conditions. Not surprisingly, nurses are quitting in droves, forcing hospitals to rely ever more heavily on staffing agencies to fill the mounting vacancies. Nurse staffing agencies can’t keep up with the demand, so they must pay more to attract nurses. The agencies pass on their increased staffing costs to hospitals, which don’t want to accept responsibility for the situation.
The AHA, which is focused on improving hospital profits and executive compensation, has pulled out all stops to derail the success of staffing agencies and the increased compensation they are paying nurses. The group has previously asked the FTC to investigate nurse staffing agencies, and the California Hospital Association has asked their attorney general to investigate. That was comical since California’s AG sued CHA member Sutter Health for price gouging and garnered a landmark $575 million settlement.
The AHA, which greases politicians on both sides of the aisle, has clearly called in some chits. Senator Bill Cassidy is a bought and paid for healthcare politician and its readily understandable why the Louisiana gastroenterologist is so willing to poop on nurse staffing agencies. According to public filings, the healthcare industry contributed more than $1 million to his campaign since 2017, the largest industry sector largesse. Curiously, Urology of St. Louis is listed as his fifth biggest contributor.
Health organizations and PACs were also the biggest contributors to McKinley’s campaign in the 2021-2022 period, plopping $58,000 into his campaign. Matsui in the latest period received $25,500 from healthcare interests, a virtual tie with her biggest contributor, the electronics manufacturing and equipment industry.
I haven’t yet figured out Senator Kelly’s deal. He hasn’t received oodles of healthcare industry cash, and he campaigned on reducing healthcare costs. The guy is a former astronaut, so he’s smart enough to know that nurse staffing agencies aren’t the cause of exorbitant healthcare charges.
Jeffrey Zients, Biden’s covid czar, should recuse himself from this matter. His previous gig before becoming Biden’s closest advisor was serving as CEO of The Cranemere Group, which under Zients’ watch acquired NorthStar Anesthesia, a controversial outsourcing anesthesia staffing agency. Zients is a healthcare profiteer and he made millions consulting for the industry. I’ve previously written about Zient’s incompetence managing the pandemic and why NorthStar is so controversial.
In yet another outrage, federal officials granted a request from Michigan Governor Gretchen Whitmer to send 22-person military teams from the U.S. Department of Defense to Beaumont Health’s Dearborn hospital in suburban Detroit and Spectrum Health’s Grand Rapids hospital. Michigan, as expected, has experienced a surge in covid cases but Whitmer hasn’t publicly explained why only two hospitals are so overwhelmed they can’t manage without federal assistance. Beaumont has a $3.5 billion cash reserve, which includes the $1 billion stash it added during the pandemic last year.
Beaumont has been experiencing a severe nursing shortage for months, as the health system is infamous for being a terrible place to work under CEO John Fox. The company’s flagship hospital in Royal Oak went into a tailspin last spring after it announced it was going to outsource anesthesia to NorthStar. Whitmer and Michigan AG Dana Nessel took no action. The health system recently implied that unvaccinated patients were the source of its problems.
Spectrum is awaiting FTC approval to acquire Beaumont, a move that will create the biggest company in Michigan in terms of employees. The two companies recently announced they were making great strides integrating their organizations. Perhaps if they better prepared for the expected surge in covid cases, they wouldn’t need federal assistance. Notably, the covid crisis isn’t sufficiently severe for Spectrum to call off its takeover of Beaumont.
Spectrum CEO Tina Freese Decker is the current chair of the Michigan Hospital Association. Beaumont’s Fox is a past chair. It’s a sad commentary on the MHA that its leadership can’t manage their hospitals without federal assistance during a pandemic. It’s an even sadder commentary that Whitmer and Nessel haven’t opposed Spectrum’s takeover, which is expected to raise patient costs.