PROFITING IN CRISIS

The report examines the intersection of the U.S. nursing shortage and private equity's expansion into travel nursing. It argues that while the pandemic exacerbated staffing issues, structural problems and profit-seeking by hospitals created a vulnerability that travel nursing agencies and private equity firms have exploited. The document details how private equity firms use leveraged buyouts and dividend recapitalizations to extract value from staffing agencies, while agencies have seen profit margins grow from 15% in 2019 to 62% in 2022. It also covers legislative efforts to address price gouging and the push for mandated staffing ratios.

• The U.S. nursing staffing crisis is viewed by many advocates as a manufactured issue created by the hospital industry's profit-seeking rather than a simple shortage of qualified professionals. National Nurses United notes that while there are over 4.4 million RNs with active licenses, only 3.2 million are employed as RNs, suggesting a "shortage of hospitals that provide safe working conditions."
• Travel nursing agencies significantly increased their profit margins during the pandemic. According to the American Hospital Association, the average margin retained by these agencies grew from approximately 15% in 2019 to 62% as of January 2022, while rates charged to hospitals increased by 213% over the same period.
• Private equity activity in the medical staffing sector reached record levels in 2021, driven by the fragmented nature of the industry and the high demand for temporary staff during the pandemic. Some firms, such as Cornell Capital and Trilantic North America, entered the healthcare space for the first time in 2021 through multiple acquisitions.
• Private equity firms have used aggressive financial strategies to extract profits from travel nursing portfolio companies, often saddling them with debt. For example, Leonard Green and Partners and Ares Management extracted at least $1.54 billion in dividends from CHG Healthcare, leading Moody's to describe the company's financial policies as "aggressive."
• There is a growing trend of staffing agencies acquiring AI and software platforms to facilitate recruitment and workforce management. This strategy, seen in acquisitions by Medical Solutions and Triage Staffing, raises concerns about the loss of vendor neutrality and the potential for non-competitive pricing using proprietary data.
• The sustainability of the travel nursing boom is threatened by the depletion of federal COVID-19 relief funds, such as the $178 billion Provider Relief Fund. As these funds dry up, travel nurses have reported cancelled assignments and reduced wages mid-contract.
• Policymakers and hospital associations have called for federal investigations into potential price gouging and anticompetitive pricing by staffing agencies. While the Federal Trade Commission has been urged to act, the federal government has not confirmed if any investigation is occurring.
• Legislative responses vary by state, with Illinois passing laws to increase contract transparency and protect temporary nurses. While some states proposed rate caps, only Massachusetts and Minnesota had such caps prior to the pandemic, and their effectiveness is disputed.
• Nurses generally oppose rate caps on travel nursing, viewing them as attempts to reduce wages rather than solve the staffing crisis. Instead, many advocate for mandated staffing ratios to address the burnout and unsafe conditions that drive nurses away from permanent bedside roles.

APA

Bugbee, M. (2022). PROFITING IN CRISIS. Private Equity Stakeholder Project. https://pestakeholder.org/wp-content/uploads/2022/10/PE_travelnursing_FINAL-1.pdf

Chicago

Bugbee, Mary. PROFITING IN CRISIS. Private Equity Stakeholder Project, 2022. https://pestakeholder.org/wp-content/uploads/2022/10/PE_travelnursing_FINAL-1.pdf.

Wikipedia

{{cite report |last1=Bugbee |first1=Mary |title=PROFITING IN CRISIS |publisher=Private Equity Stakeholder Project |date=September 2022 |url=https://pestakeholder.org/wp-content/uploads/2022/10/PE_travelnursing_FINAL-1.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{bugbee2022profiting, author = {Bugbee, Mary}, title = {{PROFITING IN CRISIS}}, institution = {Private Equity Stakeholder Project}, year = {2022}, month = sep, url = {https://pestakeholder.org/wp-content/uploads/2022/10/PE_travelnursing_FINAL-1.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }