The Decibel - Investigating Canada’s dependence on for-profit nursing

Episode Date: February 21, 2024

As health care across Canada struggles with staffing shortages, a Globe investigation has found that provincial use of private nursing agencies has recently skyrocketed – in some cases costing hundreds of millions of dollars.The Globe’s Kelly Grant and Tu Thanh Ha have been investigating these private agencies – and one agency in particular – for months. Today, they tell us how these agencies work, why it’s costing so much, and the concerns with how some of these companies are operating – including some questionable expenses that are being passed onto taxpayers.Questions? Comments? Ideas? Email us at [e-mail]

The staffing shortages in Canadian health care are well known, and they're getting worse, particularly among nurses. One of the ways provinces and territories are dealing with nursing shortages is by using private, for-profit agencies. The use of these agencies has skyrocketed during the pandemic, costing provinces tens of millions of dollars. And there are serious concerns about it. The Globe's Kelly Grant and Duth and Ha have been investigating these private nurse agencies, and one agency in particular, for months. And just this weekend, several nursing unions began urging provincial governments to investigate this practice, after Kelly and Haas' investigation. Today, they tell us how these agencies work, why it's costing so much, and the concerns with how some of these companies are operating, including some questionable expenses that are being passed on to taxpayers.

I'm Mainika Raman-Wilms, and this is The Decibel from The Globe and Mail. Kelly Ha, thank you so much for being here. Hi, Mainika. Thanks for having us. So you've spent a long time by now looking into these private nursing agencies, and one company in particular. But I think we should just start maybe with some basics here. So Kelly, let's start with you.

What exactly is private nursing? Private nursing is an industry that sees agencies, for-profit agencies, hire and then sort of sell back to the public system registered nurses and other healthcare personnel. They've been around for a long time, but they used to play a more peripheral role in Canada's healthcare system. Generally, there were two types of agencies or two types of private nursing. One is travel nursing, and that often involved sending nurses from urban areas of the country to remote and rural places like indigenous communities and remote flying communities in the far north. Then there's agency nursing that's a bit more typical in urban areas, and that is companies that provide nurses for last minute shifts at

some hospitals and long-term care homes and bigger centrals, those nurses tend to be people who live locally and moonlight working for these agencies. And do we have a sense, like, how common is private nursing in general in Canada? So stats on this are, as we learned, somewhat difficult to find. What we did manage to get our hands on was information from most provinces and territories about how their spending on private agency nursing has grown, particularly since the pandemic. The real trend we've seen here is that we've gone from places that almost never used private agency nurses or travel nurses. We've seen some of those places come to rely quite heavily on these private nurses. So to give you a couple of examples in Newfoundland

and Labrador, just in five months of last year, from April to August, they spent $35.6 million on agency travel nurses. And that's up from an average of about a million dollars a year before the pandemic when they really only used agency nurses in Labrador's remote communities. Okay, so that's a huge increase. If we're talking about like a million to 35.6 million, that's a really drastic number change there. And it's not just Newfoundland and Labrador. Several other provinces sent us numbers showing just how much their spending had grown.

So Nova Scotia, for example, their health authority spent $43.9 million on agency RNs from April to September of 2023. That's about 10 times what it spent in all of 2018-2019. We saw similar increases in Manitoba, in Saskatchewan, and large increases in Ontario as well. Ha, I want to turn to you here because you were really focused on looking at one company. You were investigating Canadian Health Labs. So, Ha, can you tell me about this company? Like, when did this company start and who founded it? The company was started by a man named Bill Hennessy. He is from Prince Edward Island, but he has been based in Ontario for several years after studying business at the Ivy School of Business at Western Ontario. He's very entrepreneurial.

He started first organizing planning parties on campus. And in 2009, there was a strike by garbage collectors in Toronto, and he very quickly set up a company to do a pickup service at home. He later bought a company that sold sanitation products. And through his work with sanitation products, when the pandemic started, he pivoted first to selling testing kits for COVID-19. Then he started running clinics to test and vaccinate. And then in the last iteration, he went into travel nursing. And so he's founded this company, Canadian Health Labs. Kelly, do we know where this company operates?

Online, CHL says it operates in eight plus provinces. But we were really only able to get very deep details on how they operate in Newfoundland. And that's because Newfoundland has what we believe is the best freedom of information system in the country. And they disclose to us all of CHL's contracts, as well as the contracts for every other agency that operates in the province, as well as hundreds of pages of CHL's invoices. We also know that CHL has a large presence in New Brunswick, where it's a major supplier to the Vitalité Health Network, which is the French language health network. Unlike Newfoundland, New Brunswick is far less

cooperative when it comes to freedom of information, and Vitalité refused to release any documents whatsoever related to CHL to us. Fortunately, we were able through a source to obtain copies of CHL's contracts with Vitality. So let's focus then on CHL's involvement with Newfoundland and Labrador. I'll ask you this, do we know how that involvement started? We can get a sense of how it started through the documents that we have obtained through access to information. In early 2022, we know that a lobbyist that CHL had retained made an introduction between CHL and the office of Premier Furey in Newfoundland. But this was for vaccination and testing clinics. And nothing came out of it to our knowledge. But a few months later, by April, there was a severe nursing shortage

in one of the regional authorities in Newfoundland, the central authority. And they turned to CHL. And CHL promised, unlike other agencies they were dealing with, that it could deliver all the nurses that they needed, or quite a large number. So I guess, how is that? How is CHL able to offer so many more nurses than other agencies? We're not sure what came first, the egg or the chicken, but the nurses we spoke to said that it was simply that CHL paid more. And not just in terms of the rates that the CHL

was going to pay the nurses, but also CHL was going to reimburse them for different forms of expenses that it would incur to work as travel nurses. Okay, so how much is CHL then charging the province for these nurses? And I guess, how does that compare to how much the nurses are actually getting themselves? CHL doesn't have hourly rates in their contracts the way that other agencies do, but we calculated the rates ourselves, and we found that they charge from $161 per hour per nurse to over $300 per hour per nurse. And the nurses who work for CHL told us that they are paid between $85 and $100 an hour. That's what they told us. So CHL is charging three times that in some cases. But what is also significant is that the local nurses who worked in the public system in Newfoundland were getting less than $50 an hour. So Newfoundland had to pay six times what

they paid their regular nurses to get the services of travel nurses from CHL. I think it's important to point out too that the western region of Newfoundland wasn't alone in paying these very high rates. Vitalité in New Brunswick was also paying rates that we calculated worked out to about $300 an hour for a nurse. They were also paying CHL $162 an hour for a personal support worker. And those are health workers that generally earn in the range of $20 to $25 an hour. We don't know for sure what they were being paid by CHL. Those numbers in the low 20s I'm talking about is generally what PSWs are paid in the public system. Wow. Okay. So Kelly, do we know how much CHL is actually getting from provincial governments in total? We don't know for sure. And that's because neither Newfoundland

and Labrador nor New Brunswick would give us specific amounts for how much they had actually paid out to CHL. But we did obtain copies of their contracts, and the numbers are in the tens of millions. To give you one example, there's a nursing contract in place right now with Vitality in New Brunswick that's a four-year contract that runs until February of 2026, and it has a cap, a maximum, of $93 million. This is just looking at labor, but there were definitely other things that CHL charged to the public purse. And do we know what those things are? Yes, Minaka. The contracts call for the local health authorities to reimburse the cost of

accommodation and transport, which is a rather common thing in the industry. However, CHL also included other expenses too. And we have the invoices that they submitted. We saw, for example, that first there was cost to make sure that the nurses are ready to practice in Newfoundland. So that means paying for the criminal police check, paying a $412 fee for their license to practice in Newfoundland, paying for some courses, several hundred dollars per course per nurse. After that, you have the travel. So some of them flew, but others drove because the company wanted to encourage them to stay a longer period of time. And one way to do that was for them to drive so they could bring more personal belongings. And sometimes they even brought their pets. Sometimes they even brought their spouses.

Driving was not cheaper than flying because they charge mileage. And so the nurses who drove from Ontario would charge, some of them charged as much as $2,000 in mileage, plus the hotels along the way. Some drove from Alberta. Some drove from BC. So all of these costs are being incurred by the nurses because they're traveling to get to Newfoundland, for example. And the company, CHL, is saying we'll reimburse them for that. But then the company is billing the province for those costs. Yes. And once they arrive in Newfoundland, some of them got to stay in hotels or resorts or Airbnb. So the bills, the monthly bills sometimes ran to $2,000, $4,000 a month. Others were put in apartments. So the apartment has to be furnished. So we saw items such as Walmart kitchen utilities,

Dominion groceries, Rogers bill. There was a charge for an air fryer. An air fryer. Yeah. They would also have rental cars. And the rental cars also opened the door to another form of expenses. At some point, the CEO of CHL, Mr. Hennessy, was incorporating a few companies where he's the sole director, and those companies were renting vehicles to New Brunswick and Newfoundland. Okay, wait a minute. So the guy who owns CHL also owns other businesses that are renting cars to the nurses that the nurses are using when they're there? That's right. Also in New Brunswick, we found that his companies bought properties and were lodging nurses there. Except that in the contracts with New Brunswick, it says that his company can

charge hotel or Airbnb rates for the accommodation. So CHL would be able to charge hotel rates, even though the nurses were staying in apartments. And Ha, I know you also found some interesting things around the food charges. Can you tell me about that? The food, it's a standard thing with travel nurses because they are traveling, that they get per diems to pay for their food. And all the contracts spell out that Newfoundland authorities or New Brunswick would pay for breakfast, lunch, and dinner. So that

works out initially to about $50 per day per nurse. So that's the contract that CHL had signed with the health officials. However, the nurses in the contracts that they signed with CHL were told that the food was not included. We reached out and spoke to 26 of them and they said that they were not given those per diems. They were never told about it. We tabulated from the invoices the per diems that were charged just in Newfoundland, and it's around $1.6 million. And this is a partial sum because we don't have access to all the invoices. So $1.6 million charged to the province for these per diem food charges, but the nurses say they weren't actually getting any food. That's right. And we have asked CHL about this discrepancy, and we did not get a response on that. Kelly, what has CHL said about all of this?

So we started contacting Mr. Hennessey and CHL in the middle of January, and they declined to do an interview, but we did send them 36 detailed questions about CHL's business practices. Ultimately, they sent us a four-paragraph statement, and that statement really addressed how they decided to set their rates. So I want to just read a quote from that statement for you. And they said that, well, contract rates for health human resources vary by region and specialty. The terms of CHL's contracts with healthcare professionals are fair and transparent. The company also added that the contracts are tailored, quote, to meet each jurisdiction's significant local needs and reflect the

extraordinary logistical challenges of getting and keeping healthcare professionals in rural, remote, and underserved communities, end quote. We'll be right back. Kelly, what is the government of these provinces? Let's talk about Newfoundland in particular. What has the government of Newfoundland said about why they're working with CHL, you know, despite all of these discrepancies, essentially? First, I should say that we also put detailed questions to the

governments of Newfoundland and New Brunswick. And in both cases, they didn't answer most of our questions directly. And instead, they provided statements that really laid out just how dire their staffing situations were, and talked about the possibility of having to close rural ERs, possibly having to close some rural hospitals, possibly having to close some rural hospitals, possibly having to stop dialysis services in parts of rural New Brunswick. So they really came back to say that when it comes to keeping essential hospital and other healthcare services open, that that is their priority and that that's why they turned to travel nurses and turned to CHL. So these provinces are really in such a difficult situation that it sounds like they don't have a

lot of options here. After our story published, I actually spoke with the health minister in Newfoundland. And he repeated something that he had said earlier, which is that he considered travel nursing to be a necessary evil. And we also said, importantly, that it was Newfoundland and Labrador Health Services, which is now the single amalgamated health authority, was the one who made the operational decisions. But from a philosophical perspective, he felt like the most important thing was keeping these services running. And if travel nurses at a high price were the only option, then he was willing to pay it. I mean, it sounds like a lot of this does really come down to money then. So, Ha, let me ask you, like, there's so much money going to CHL. Like, why not just pay their regular nursing staff that

they have a little bit more so they can, you know, keep people around, reduce the number of people leaving? Why not just do that instead of getting in all these travel nurses? It's something that we heard in the feedback we got to our stories, that why are we not giving more money to local nurses? There are two factors in it. One is that there's a finite number of nurses in New Brunswick and Newfoundland. So even if you're paying them more, you cannot create more. So they actually do need more legs on the ground, more scrubs on the ground. The second thing is that if they were going to pay more for their nurses, I suspect that it will also create long-term problems for them because it would be locked into collective agreements and contracts. This is a dynamic that we have seen in Quebec where the government was told that it needed to pay its healthcare workers better after the terrible crisis that

happened when the pandemic struck nursing homes. But the government was very reluctant to do that because they knew that doing that, other public sector employees would also want similar raises. I think another thing that's important to understand here is that although there's been this huge increase in spending on travel nurses, they still make up overall a small percentage in most provinces of the hours worked by nurses. So to take Newfoundland again as an example, in that most recent five-month period they gave us, April to August of last year, 5.4% of the hours worked by nurses in the province are worked by travel nurses. So you have to think if they were to give very substantial raises to all of the staff nurses who work the other 95% of hours,

that adds up to a lot of money, which is part of the reason why there is some reluctance on the part of the governments to, not just in Newfoundland, but everywhere, to provide really substantial increases to unionized nurses. I wonder if we kind of look at this, you know, from a big picture perspective here, is there maybe a lesson for people funding health care systems in Canada? Could we be doing this better? Some provinces have begun to recognize the challenges that this practice poses to provincial

finances. One province, for example, Nova Scotia, just passed a policy in December saying that travel nurses couldn't work more than 180 days in the province. In other words, they were trying to encourage anybody who's working that much in Nova Scotia to just become a unionized staff nurse rather than working through a private agency. Quebec is also working on trying to wean itself off of travel nurses. Yes, and Quebec is a huge user of not just agency nurses, but of other types of healthcare workers too, and they include orderlies, social workers.

The province has actually taken steps, and in the reaction to our story, like a number of other people in Atlantic Canada have said, we should adopt what Quebec has done, which is the legislation to phase out the use of agency workers. You have to know that the context is that Quebec's in the last fiscal year spent like nearly half a billion dollars just on agency nurses, not including other categories of healthcare workers who come from agencies. So this law has been passed, but until then, the province still has to rely heavily on agency nurses. Last year, they issued a massive tender for more than 8 million hours of work by agency staff. And that in itself is interesting because it shows how Quebec has taken steps for tighter controls that other provinces don't have.

For example, people who want to offer agency work, Quebec will pick the lowest bidder. The agencies have also to be pre-screened by an authority. You cannot just show up and bid for this. But nevertheless, it is still a huge challenge. And some of those bids have ended up in court with allegations of collusion. So it's not a simple matter. And I've heard nurses in Quebec say that even if they pass a law, they're not going back to nursing in public hospitals because the work is too unpleasant.

And that goes to the bottom of the issue, which is that it's not just a matter of banning travel nursing. It's not just a matter of banning private nursing. You also have to create the working conditions that will make it palatable for people to work again in those public facilities. Yeah. I mean, that seems to really get to the heart of the matter. So, I mean, just lastly, Kelly, maybe I'll ask you, like, what have experts said about how we can do this better? Like, how can we sustain our healthcare systems without having to rely on private nursing? I think, as Ha just mentioned, the key here is improving the working conditions so that we can retain the nurses we already have and convince those

who are on the sidelines or working for agencies to come back and work full time for the public system. The areas that I think would make the biggest difference for retention, one of them is in fact better pay, but greater flexibility and control over hours and schedules is something we heard again and again. And then we also heard a lot about workloads in the hospitals. So one province I would point to that's come up with something that I think is fairly innovative is that British Columbia has put into its most recent agreement with the registered nurses there

that there is a minimum nurse to patient ratio and that the hospitals and the government are committed to meeting that ratio. So you could imagine if you're a nurse, if you're guaranteed that on a med surge ward, you'll only be one nurse to four patients on every shift, as opposed to constantly working short and being one nurse to six, seven or eight patients, where you feel as though you're run off your feet and you can't provide good quality care. That kind of nurse to patient ratio is one solution that really could help to improve working conditions and convince nurses to stay or return to the public system. Kelly, thank you so much for taking the time to be here today. Thank you for having us.

Thanks. That's it for today. I'm Maina Karaman-Wilms. Our producers are Madeline White, Cheryl Sutherland, and Rachel Levy-McLaughlin. David Crosby edits the show. Adrienne Chung is our senior producer,

and Angela Pachenza is our executive editor. Thanks so much for listening, and I'll talk to you tomorrow.