Secondary Cost Considerations Associated With Respiratory Therapy Agency Staff

Abstract

Background: There is a national shortage of respiratory therapists (RTs) intensified by the COVID-19 pandemic and 2022 bronchiolitis/RSV surge. These factors have contributed to increased use of agency RTs. The salary cost per hour of agency RTs is higher than full-time (FT) RTs secondary to the nature of the contract position and priority need. We aimed to review what secondary cost implications were associated with use of agency RT associates.

Methods: An IRB-approved retrospective review of onboarding, orientation, and documentation driven revenue errors was completed from 1/1/2022-5/15/2023 comparing FT RT practices and agency RT practices within our pediatric hospital (244 beds, Level 1 Trauma Center/Level IV NICU).

Results: In the Northeastern United States, the average cost of a pediatric agency RT was approximately $136/hour compared to the average RT salary of $45/hour based on regional market benchmarks from 1/1/2022-5/15/2023. 9.0 FTEs of agency RTs were employed in our department (Budgeted 91.09 FTE, 22% vacancy rate). Annual salary cost of one agency RT working 0.9 FTE is an estimated $157,248 more than a FT RT. Cost of orientation for a travel RT compared to a FT RT is $6,528 versus $19,440 (4 days versus 12 weeks). Each FT RT receives an average 15% non-productive time (approximately 280 hours per year in a 0.9 FTE position) equating to about $12,600 not utilized by an agency RT. In our review, we found that agency RTs had documentation errors 429% more than FT RTs. These errors led to a reduction of revenue on average of $13,597 per month per 0.9 FTE agency RT. Empirically, agency RT call outs, contract cancellations, and policy deviations also occur and create risk and cost implications that were not quantified in this study.

Conclusions: Overall, agency RT staff use is costly from a primary base rate measure. Secondary cost implications are both positive and negative. Positive cost savings measures include the reduction in non-productive time (average savings $12K annually) and decreased orientation time (average savings $13K annually). Negative cost increasing factors include documentation driven charge errors (average cost increase $132K annually) and pay rate (average cost increase $157K annually). Inclusive of all these factors, the cost of an agency RT compared to a FT RT at 0.9 FTE is $246K more annually. Further studies must be done to evaluate potential cost reduction strategies for secondary cost implications in agency RTs.