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Government acts on soaring nurse agency costs - 7.1.02 Monday, 7 January 2002

Monday, 7 January 2002


Victorian public hospitals were being held to ransom by private nurse agencies that were charging up to $195 per hour for a specialist nurse.

Announcing new moves to tackle the spiralling agency costs, Acting Premier and Health Minister John Thwaites said hospitals had been forced into a bidding war that was costing the public health system more than $1 million a week.

Mr Thwaites said the Government was setting up its own “nursing banks” to reduce the reliance on private companies and had applied to the Australian Competition and Consumer Commission to allow it to tender for agency nurses on behalf of all public hospitals.

“More than half of the $1 million a week in agency fees goes directly to the private companies, not the nurses, and could be better spent on employing permanent staff to treat more patients from our waiting lists,” the Minister said.

While Victoria had recruited an extra 2650 nurses and offered the best nurse pay and conditions in Australia, private agencies were capitalising on a national shortage of specialist nurses by dramatically increasing their fees.

“Since May, fees for emergency and critical care nurses have increased from $50 to $88 an hour, while on public holidays, hospitals have been forced to pay $195 an hour for an agency nurse instead of $44 for a salaried nurse,” Mr Thwaites said.

“The costs for hospitals and the quality issues for patients is of real concern, as agency nurses don’t have the same knowledge of patient histories and local hospital practices.”

Mr Thwaites said the Government was working with hospitals and the Australian Nursing Federation to urgently address the issue by boosting hospital-run ‘nurse banks’ to provide a reliable pool of nurses wanting flexible hours who had local experience.

“A nurse bank is a locally-run group of nurses working casually in a health service by filling roster deficits, replacing sick leave shortages or providing extra support during periods of high demand,” Mr Thwaites said.

“Nurse bank staff are familiar with the standards, procedures and expectations of the hospital, giving the highest quality of care for patients.”

The Government was also considering capping nurse agency payments by hospitals and, as recommended by the Industrial Relations Commission and nursing bodies, limiting overall use of agency nurses to unplanned absences and exceptional circumstances.

Mr Thwaites said the Government was also funding hundreds of scholarships and refresher courses to attract more specialist nurses into our public hospitals.

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