Travel Nursing Pay: Same Hospital, Different Pay?
Travel nurses often discuss and compare their travel nursing pay packages. This is understandable given the opacity of travel nursing pay. Additionally, pay is always a matter of negotiation and it’s natural for people to want to know whether or not they’re getting a good deal.
As a result of their discussions and comparisons, travel nurses often determine that there are large pay differences exhibited between pay packages at the same hospital. They might find that these differences exist between two agencies or even between nurses working through the same agency. Here we’ll discuss some of the reasons that differences can exist, or appear to exist in some cases. Understanding these issues will help travel nurses evaluate their pay packages better.
Different travel nursing bill rates at the same hospital
Different bill rates at the same hospital is one potential reason for differences in pay. The bill rate is the hourly rate that the agency bills its client hospital for the traveler’s time. The bill rate is single biggest factor in determining how much an agency can pay for a particular assignment.
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Admittedly, it’s rare these days for a hospital to have different bill rates for different agencies. There has been a big move in recent years toward “standardized bill rates.” This means that hospitals don’t negotiate different rates with different staffing agencies. Instead, they maintain one rate structure for all agencies. Often times, the hospital signs a “Vendor Management Agreement” with one staffing company who is then responsible for managing all of the hospital’s staffing needs including managing all staffing agencies engaged in filling the hospital’s openings. Of course, this means the hospital has only one contract and therefore only one rate structure. Despite this, there are instances where two travelers at the same hospital in the same unit might be working under different bill rates.
The most common instance is when the hospital has instituted a “crisis rate” for a particular job or group of jobs. A crisis rate is an increased bill rate that the hospital can initiate in cases where they have an urgent need. When a crisis rate is initiated, it’s always possible that some nurses working on a unit received a crisis rate contract while others did not. Crisis rates can be upwards of $20 per hour higher than standard rates which would certainly translate into much higher pay.
It’s also possible that the hospital operates under a bidding system for it’s travel nursing bill rates. In a bidding system, agencies submit their candidates for a job opening along with a bid for the bill rate. The hospital reviews the candidates and the bids and decides on the best overall option. In this case, it’s certainly possible that two travelers working at the same facility are doing so under different bill rates.
Different Agency/Hospital Relationship
Another possible reason for different pay packages to exist at the same hospital has to do with agency/hospital relationships. As mentioned above, it’s rare for hospitals to have different bill rates for different agencies. However, it is possible. The most common scenario is when the hospital engages in “direct relationships” with various companies. In this rare case, the hospital could be negotiating different rates with different companies.
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As mentioned above, the hospital may also have a Vendor Management Agreement with one agency. This one agency will typically have an exclusive contract to fill all of the hospital’s staffing needs. Of course, they need help filling all those openings so they enlist other agencies as “sub-vendors.” In this case, the Vendor Management Agency will typically charge a fee to the sub-vendors. These fees typically range between 2% to 3.5% of the bill rate. This means the sub-vendors have a lower bill rate to work with. Some sub-vendors are still able to pay better rates than the Vendor Management Agency, but others are not.
Different start-up costs for the travel nurse
Another reason that different pay packages can exist at the same hospital has do with the nurses’ start-up costs. Many things can affect start-up costs. For example, there maybe major differences in the travel expenses required to get the travel nurses to and from the assignment. If an assignment is in San Diego, CA, then it’s going to cost a lot more to get a nurse from Florida there than a nurse from Los Angeles. And, as we’ve mentioned before, the travel stipend really isn’t free despite agency advertisements to the contrary.
The agency may also incur higher start-up costs for a brand new nurse than they would for a nurse that they’ve already worked with. On-boarding a new nurse can be expensive for an agency. They’ll need to go through the entire compliance process for the first time. They might need to pay for immunizations and medical exams. They may even pay for licenses and certifications. They’ll avoid most of these costs when working with nurses they’ve already on-boarded.
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While these may sound like insignificant differences, these costs can add up quickly. They could amount to $1,000 to $2,000 which is $2.13 per hour to $4.26 per hour if you’re working a standard 13 week contract for 36 hours per week. These figures would certainly result in a noticeable difference between two pay packages.
Different travel nursing pay packages
Finally, pay packages can be structured in many different ways. Different structures can lead to differences in pay. For example, one nurse may be taking travel nursing company provided medical benefits while another may not. This can result in a difference of more than $400 per month. This is true for many other variables including rental cars, differences in housing, bonuses, and others.
It’s also possible that one agency is paying a much lower taxable pay rate and higher stipends, while another is doing the opposite. In fact, some agencies pay very low hourly rates and very high tax-free stipends. This can affect pay in two ways. First, the agency paying the higher taxable hourly rate will be subject to higher payroll costs and therefore have less money to pay to the travel nurse. Second, a lower taxable hourly rate will result in higher net pay for the travel nurse receiving it. Therefore, if travel nurses compare net pay, then the travel nurse getting more tax-free money will have a reason to claim that they’re getting paid more money. However, the two may actually be receiving the same gross pay.
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Many travel nurses end up feeling that they’re getting ripped off by their agency when they hear someone is making more money at the same hospital. This is understandable given the opacity of travel nursing pay. However, it’s important to remember that comparing pay packages requires that you consider every variable involved in the packages. This is the only way to evaluate whether or not you’re getting a good deal as a travel nurse.
There are certainly instances where agencies keep more for themselves. And there are certainly agencies that offer better pay packages than others. However, there are also plenty legitimate reasons that pay may differ at the same hospital for the same specialty.
