Minimizing Contract Staff in Skilled Nursing Facilities | Clinical Consulting Services | Richter

The first cases of coronavirus (COVID-19) on U.S. soil were reported in a 100-bed Washington State skilled nursing facility (SNF) on January 21, 2020. On January 22, only three of the facility’s full-time nursing professionals showed up for work. The Centers for Disease Control (CDC) was compelled to bring contract staff to the facility to care for its residents.

Three months later, a Southern California SNF with 84 COVID-19-infected residents was evacuated after a large percentage of the nursing staff failed to show up for two consecutive days.

As the current crisis drags on, and with other potential pandemics/ disasters on the horizon, SNFs of all sizes in all corners of the country will find it harder and harder to attract qualified full-time employees, and retain them over time. Not surprisingly, clinical, accounting and financial implications of this are profound. So, how do you endeavor to maintain a full-time employee base, solidify your facility’s finances and provide optimal resident care in the process?

In this blog, we explore how minimizing contract staff can help to reduce staffing-related expenses while enhancing bottom-line outcomes for your facility—and its residents.

In a perfect world, your SNF would be 100 percent staffed, 100 percent of the time by full-time employees. Why? Optimal staffing levels help to ensure optimal resident outcomes; full-time employees generally feel a sense of teamwork and community and thus tend to be more engaged; and by any measure, salaries and benefits for fulltime employees represent predictable costs on the balance sheet and almost always prove more economical than hiring contract employees. Ours is not a perfect world, however, and staffing realities in today’s SNF realm paint a disturbing picture:

• Shrinking staffs
• Overworked and often undertrained employees
• Burnout and high turnover
• Bonus payments as incentives to retain qualified and valued employees
• A growing need for contract employees

Contract employees may be a necessity for your facility. But they present challenges from both clinical and financial perspectives. Consider:

Clinical Challenges:

• Your infection prevention and control efforts could be compromised. Often, contract employees’ work at multiple facilities, and those environments are beyond your control. Consequently, those contract employees could be exposed to COVID-19 patients in outside facilities (not to mention other pathogens such as viruses, bacteria, fungi and parasites), which puts your residents and staff at risk.
• Overuse of contract staff could adversely impact the quality of care in your facility, which in turn, affects resident outcomes and corresponding quality measures. As a result, your Five-Star rating could also be impacted.
• Relying on contract employees puts your facility at risk for declining resident outcomes, survey issues, audits and unwanted expenses as a result of running below your targeted patient per day (PPD) projections.
• Case mix index (CMI) could be compromised. Without the proper staff in place, your facility may not be equipped to provide the services that increase case mix, or document services that increase it. That, in turn, impacts revenue and clinical outcomes.
• Accident/incident reports could increase just from the fact that contract employees don’t know your residents, don’t understand their behaviors and can’t anticipate their needs.

Financial Challenges:

• Contract employees generally are more expensive on a per-hour basis than full-time staff. Fewer full-time staff means more contract staff—and more cash needed to pay them.
• Moreover, some contract employees demand hazardous duty pay for work around COVID-19 patients, and in other extreme environments. If your SNF falls into that category, your contract staff costs could skyrocket.
• It’s difficult to plan and budget for contract staff since needs are variable over time.
• Even when facilities budget for contract staff, actual costs often exceed budgeted amounts.
• Some contract employees don’t invoice in a timely manner, which can cause additional accruals and more work for your accounting staff.
• Even when contract employees do invoice promptly, they expect prompt payment, which could compromise your cash flow position in tough times like the COVID-19 pandemic.
• Using contract employees means paying for additional expenses like travel, meals and sometimes lodging.

Indeed, contract staffing can be up to three times as expensive as full-time staff—sometimes even higher. While it’s necessary at times to bring on contract staff, your goal should be to operate with as many full-time employees as possible—and the fewest number of contract employees.

For the contract employees you do bring on board, try to build exclusivity clauses into their work contracts. Having contract employees work solely at your facility (or facilities) during the entire term of that contract will eliminate their risk of exposure in outside facilities—and by extension, your residents and staff will be safer.