Is There a Highest Paying Travel Nursing Agency?

With hundreds of agencies operating throughout the United States, many travel nurses wonder if there is a highest paying travel nursing agency. After all, great pay is one of the many advantages that agencies tout about their services. Unfortunately, it would be impossible to definitively determine THE highest paying agency. However, understanding the issues pertinent to this question can help you find agencies that pay good rates.

As we routinely mention on this website, travel nursing pay packages are largely contingent on the bill rate for the assignment in question. The bill rate is the hourly rate the agency is able to charge for the nurse’s time at the hospital and it represents the agency’s sole source of revenue. So the higher the bill rate, the more the agency has to pay and vice-versa.

When travel nursing agencies have different bill rates at the same facility

So one way for an agency to potentially pay higher rates is to have higher bill rates than their competitors. In the past, agencies negotiated rates with hospitals on a case-by-case basis much more frequently than they do today, so it was more likely that bill rates varied between agencies for the same assignments.

However, these days, the vast majority of bill rates are “standardized.” This means that every agency that works with a particular hospital gets the same bill rate. This change is due in large part to the proliferation of Vendor Management Services which help hospitals manage their relationships with the agencies they work with. Despite this shift in the industry, there are still some cases where bill rates vary between agencies at the same hospital.

For example, one popular Vendor Management System called Medefis, includes a bill rate bidding feature. Hospitals post their jobs and when agencies submit their candidates, they also submit a bid for the bill rate. Of course, this type of system is designed to get agencies to bid competitively, so rates tend to get driven down, not up.

At the same time, the bill rate is just one variable for the hospital to consider when making their decision. Theoretically, more qualified candidates would command higher pay. Hospitals may be willing to pay for the qualifications in some cases.

For this situation, we recommend asking your recruiter if the job in question is offered through Medefis. If so, your recruiter should be able to log into Medefis to see the bill rates that are being bid by other agencies as well as the desired bill rate posted by the hospital. Also ask about the qualifications of the submitted candidates and work with your recruiter on a bill rate that will work for you. Of course, your recruiter may decline in which case you’ll just have to let them know the rate you’d be willing to work for so they can bid appropriately, or find a new recruiter.

Bill rates also vary between agencies when there is a Managed Service Provider (MSP). An MSP is a type of Vendor Management Service in which one staffing agency holds an exclusive contract with a hospital or hospital system and subcontracts with other agencies to help get all the orders filled. The MSP agency typically charges a billing fee to the subcontractors of anywhere from 2%-4% of the bill rate. Therefore, the MSP will have a higher rate than the subcontractors because they’re not subject to this fee.

The problem for travel nurses is that MSPs tend to be the largest and often most unpopular travel nursing companies in the industry. American Mobile, Cross Country, Parallon, and Medical Staffing Network serve as the MSPs for many hospitals throughout the country and it’s quite rare for a smaller or mid-sized agency to secure MSP contracts of their own.

For these situations, we recommend that you always ask if the assignment is being offered through an MSP. However, don’t automatically assume that the MSP will pay more money. We’ll discuss the nuances involving MSP pay below. For now, knowing there is an MSP and who it is allows you to shop around with the understanding that all agencies except the MSP have the same bill rate.

It’s also possible for smaller and mid-sized agencies be able to secure direct contracts with small rural hospitals or smaller regional hospitals systems in their general geographic location. While it is infrequent, these agencies and hospitals often have long running and deep seeded relationships. And in these situations, the bill rates can certainly vary from agency to agency. Two examples that come to mind are Trinity Healthcare Staffing in the Carolinas and Medical Staffing Solutions, Inc. in Wisconsin.

For this situation, we recommend asking all agencies where they are located and if there are certain hospitals that they have great relationships with. You can also ask if there are certain hospitals that offer the best pay. Agencies will usually jump at the opportunity to sell you on their best gigs.

Finally, bill rates may also vary between agencies when state agencies or public healthcare facilities are involved. Many of these entities still utilize an RFP contract system. Under these systems, a window opens during which time agencies can submit their proposed contractual agreements and bill rate bids. The healthcare organization will then award contracts to select agencies.

One such example is the California Department of Corrections (CDC). In this case, CDC maintains a public “Bid Matrix.” The Bid Matrix can be viewed online and it displays all the bill rates and corresponding agencies. Under this system, the CDC contacts the lowest bidding agencies first to see if they can get the assignments filled at the cheapest price and then work their way up the list thus ensuring the best price for taxpayers.

When agencies have the same bill rates

Now, it’s also possible for one agency to pay more than others when the bill rates are the same. In this case, obviously, one agency simply takes less for themselves and gives more to the traveler. Understanding how this plays out is a little more complex than it sounds, but understanding the issues at play can help you find higher paying agencies.

In a general sense, it’s quite common for all agencies to attempt to operate with a standard gross profit margin of between 20-25%. We’ve broken down the gross profit calculation in detail in a previous blog post so we won’t rehash it here. However, the bottom line is that when agencies are operating with the same gross profit, then they’re typically going to be paying the same rates.

This is why we always contend that if you make apples to apples comparisons between agencies, you’ll often find that they’re fairly close to one another. However, there are two scenarios under which one agency may pay more than others given an apples to apples comparison.

Better deals on compensation variables

First, an agency may be able to provide certain components of the compensation package at a lower cost than their competitors. For example, an agency might be able to get apartments, furnishings, and/or medical benefits,  for cheaper than their competitors. And if they’re able to provide these items for less, then their costs are lower and they have more money to pay the travel nurse.

One common scenario in which this plays out is with larger companies. Contrary to popular opinion, larger travel nursing companies are indeed capable of meeting or beating the rates of their smaller counterparts. They are able to do this because they are volume purchasers of the benefits that comprise the pay package. Bottom line: they receive bulk pricing discounts because they purchase more. This means MSPs can sometimes beat the rates of their smaller and mid-sized competitors.

Another common scenario in which this plays out is with agencies staffing jobs in their local area. These agencies may have bulk purchasing power because they staff so many travel nurses in the area in question. Or they may just have special relationships with providers of the various goods and services in their area.

One example that comes to mind is Medical Staffing Solutions, Inc in Wisconsin. I routinely see them offer pay packages for jobs in Wisconsin with a choice between fully furnished company provided housing or a housing stipend of $1,000. Take the housing on this deal! Our research indicates that a decent apartment alone in Wisconsin will run more than $800 per month, and the quotes we received were for long term rentals. There is usually premium price added for short term rentals.

When agencies take lower gross profits

The second possible scenario under which an agency may pay more than their competitors for the same assignment is when the agency maintains lower overhead which allows them to take a lower gross profit. As mentioned above, it’s fairly common for agencies to operate with gross profits of between 20% and 25%.

Gross profit is essentially what is left over after all of the costs directly attributable to the traveler are accounted for. So the travelers’s compensation package and all associated costs make up the lion’s share of pre gross profit costs. But costs like rent for office space and payroll for all the agency’s internal employees, like recruiters and managers, come out of the gross profit. So if one agency is paying less for these post gross profit costs, then they could theoretically operate on a lower gross profit margin than their competitors.

How is this possible? The location of the agency is one possible scenario. An agency in Omaha, Nebraska is bound to have lower post gross profit costs than an agency in San Diego, California. The cost of office space is cheaper and recruiters and other support staff could be paid less money because the cost of living is lower. However, this doesn’t mean that all agencies in Omaha are taking lower gross profit margins.

We think it’s more likely that agencies in California and other high cost regions operate leaner than their counterparts in less expensive regions of the country. Having called on hundreds of agencies over the years for marketing purposes, we’ve found that agencies in lower cost regions are much more likely to have specialized personal. For example, they’re more likely to have a VP of Marketing as well as a Director of Marketing and several other specialized positions. In more expensive regions, there is typically a CEO and a bunch of recruiters. All other endeavors are split among the team or viewed as unnecessary.

Moreover, smaller to mid-sized agencies tend to work more with hospitals in their general vicinity and hospitals tend to have bill rates commensurate with the cost of living in the area. This means that agencies in lower cost of living areas could have a larger percentage of contracts with lower bill rates and vice-versa.

Why is this important? If you’re gross profit is 20% and and your average bill rate is $55 per hour, then you’re making $11 per hour. But if your average bill rate is $65 per hour, then you’re making $13 per hour. So higher bill rates translate into higher gross profits and therefore make up for the differences in the cost of living between agency locations.

What does all this mean for the travel nurse?

Travel nurses can glean several helpful hints from this information. First, it might be more advantageous to search for the highest paying travel nursing assignments as opposed to the highest paying agencies. We’ve discussed crisis-rate assignments, strikes and bonus assignments in a previous blog post. To reiterate, the best way to land these highly competitive positions is to have your documentation ready to go at the drop of a hat. And you can use BluePipes to manage your own submission profile so it’s ready to go when you need it.

Second, you can use our tips for finding travel nursing agencies that work in your desired locations to hunt down small to mid-sized agencies with contracts in your desired locations. You can also look at agency websites for their physical addresses. Then, contact them and ask them where their highest paying assignments are. This way you’ll be able to track down those agencies with close personal ties in their general vicinity.

Third, you can scout potential travel destinations ahead of time and inquire about pay rates for various locations. For example, if you’re planning on taking an assignment in California, then you should be aware that Kaiser, Sutter, and Dignity Health employ tons of travelers between them as the largest hospital organizations in the state.

Pick a couple of locations/cities and send out a mass email to several recruiters asking if they have contracts with these hospital organizations and, if so, ask them to provide a sample pay rate. Remember to be very specific with your rate request asking for exactly what you need and providing an exact location and hospital.

It’s important to point out that MANY companies claim to offer the highest rates, or higher than average rates. And no company is going to advertise that their rates are average or poor. As long you provide the specific details they need to run an accurate rate quote, then they should have no problem providing one.  Consider the following inquiry for example:

I’m considering a future ICU travel assignment in Los Angeles, CA with Kaiser. Do you have contracts with them? If so, can you please provide a quote for a 13 week assignment with 36 hours per week providing a Lodging Stipend, M&IE Stipend, Travel Stipend, and Medical Benefits?

It’s important to be specific. Otherwise, you’ll get answers that don’t provide the specifics you’re looking for. Helpful recruiters who are confident in their pay packages will most certainly respond. And that’s the kind of recruiter you’re looking for anyway. You can then compare the rates and select a company to work with while letting the others know that you’ll be working with a different agency for said hospital organization.

As always, we’d love to hear your feedback on this topic. Please let us know if there are specific agencies you’ve worked with that offer great pay or let us know if there are any questions or concerns by posting in the comments section below.