Skip to main content
COVID-19 in Maryland Health Care

Amid ‘Staggering’ Nursing Shortage, Lawmakers Target Price Gouging Concerns

Getty Images photo.

As Maryland hospitals shell out more money than ever to fill a surge of nursing vacancies, state lawmakers signaled on Tuesday that they intend to address persistent concerns that staffing agencies are engaged in price gouging.

Legislation introduced by Sens. Clarence K. Lam (D-Howard and Baltimore counties) and Pamela Beidle (D-Anne Arundel) would prohibit companies from boosting prices on essential goods or services more than 10% during or 90 days after a designated state of emergency.

The measure, Senate Bill 565, would plug what sponsors described as a long-standing gap in state law. “Maryland is one of the rare states that doesn’t actually have on the books a prohibition on price-gouging,” said Lam.

The state’s hospitals have 3,900 nursing vacancies, the Maryland Hospital Association announced on Tuesday. In a news release, the association said the “staggering workforce shortage” is limiting hospitals’ “capacity to meet the needs of all Maryland residents.”

“These challenges come after nearly two years on the frontlines of the COVID-19 pandemic and at a time when the total demand for hospital care — for COVID and everything else — is without precedent,” the association added.

Lam, a physician, and other hospital officials said the January spike in hospitalizations trigged by the omicron variant, a wave of illnesses among nursing staff, and general burnout from the nearly-two-year-old pandemic have created a crisis for health care facilities.

“It’s kind of a perfect storm,” said Bob Atlas, the hospital association’s CEO, in a recent interview.

Hospitals in Maryland and elsewhere have offered retention bonuses to encourage staffers to remain. They have also turned to staffing agencies that employ “traveling” nurses, often personnel who have recently left hospital positions to make more money.

Atlas said Maryland hospitals have seen the price for traveling nurses skyrocket in recent weeks.

“The average hourly cost of a staff nurse, all-in, is like $50. For a traveler it’s like $120 right now. And we’ve seen numbers as high as $175 or even $200 for certain specialties and locations,” he said. “Hospitals are paying an extreme cost for contract labor — not only because the hourly rates are high but because they’re having to use more contract labor in total volume.”

Atlas said the association has heard “anecdotally” that the increased fees don’t always reach the nurses themselves. “So the agencies are exploiting the situation in some cases,” he said.

The Lam/Beidle bill would protect consumers broadly during any government-declared emergency. With limited exceptions, companies would be only be able to raise prices 10% for “essential” goods and services, including food, fuel, water and ice, medicine, health staffing services, building supplies, storage space, internet service, and lodging.

Companies that can show that their costs have increased would be allowed to raise prices by more than 10% under the legislation.

Price-gouging legislation has been introduced in prior sessions but has not advanced. SB 565 is a priority for the hospital association, which said the 3,900 nursing vacancies represents a 50% increase since August.

In a recent interview, Attorney General Brian E. Frosh (D) said it is important that price-gouging legislation not impede nurses from making more money. “Nurses aren’t paid enough for what they’re going through,” he said. “It’s important to ensure that — as a remedy to this, which is a serious problem — you don’t take away the ability of the nurses to earn more money.”

He said it’s unclear to what extent staffing agencies are engaged in profiteering.

“They (the hospitals) don’t have — and we don’t have — information,” he said. “Everybody is speculating as to what’s what. What’s clearly happening is that it’s costing hospitals a lot more money to hire nurses, especially for traveling nurses. This is a serious problem for hospitals. I just think that the solution — if there is one — is going to be complex.”

The head of the Preventive Medicine Residency Program at the Johns Hopkins Bloomberg School of Public Health, Lam said he deals with the health care worker shortage on a daily basis.

“It’s fair [for staffing agencies] to make some profit, just like any business would, but I don’t think it needs to be exorbitant and taking advantage of a public health or emergency situation,” he said. “This is a crisis situation. We just can’t find enough people to staff up our hospitals and health facilities. It is absolute bananas right now.”

Pro-Obamacare group urges Hogan to act on licensing

A Washington, D.C.-based health care advocacy organization announced on Tuesday that it has begun running TV ads aimed at Gov. Lawrence J. Hogan Jr. (R).

The spots feature a Maryland nurse who says she waited outdoors in frigid temperatures to get her license renewed, but wasn’t able to do so.

“I’ve been working 80 hour weeks for months,” says the nurse, identified as Emily H. “I’m not sure people realize how much nurses are suffering. It’s affecting our patients. Now, to make matters worse, the state’s process for issuing nursing licenses is a mess.”

“Where’s Governor Hogan in all of this?” she adds. “It’s his health department. You need to fix this, Governor Hogan. Our patients need us now.”

The ad is an apparent reference to the licensing delays linked to the cyberattack that hit the Maryland Health Department’s computer networks in December. The agency has yet to fully recover from the incident.

The spot was produced by Save My Care, an off-shoot of ProtectOurCare.org, an organization formed by a former Clinton administration official to buck GOP efforts to weaken the ACA.

Save My Care said it will run as part of a “significant six-figure ad buy” on network and cable television in Baltimore and Washington, D.C.

A Hogan spokesman declined comment. Last week the governor signed an executive order to provide licensing flexibility for pharmacists and technicians, allow nursing students to serve as licensed practitioners, and allow respiratory therapy students to assist emergency medical services personnel. An earlier executive order suspended the expiration of nursing licenses.