Capping Medical Agency Fees – What Impact Is It Likely To Have?

So, if Ministers and NHS England go ahead, interfere with the market (not a usual Tory principle) and set a cap on fees for medical agency staff, what is likely to happen?

The first point to keep emphasising is that most of these “agency staff” are actually doctors and nurses employed by the NHS already. In London, where the analysis was done, 70% were employed by other Trusts. So this is the main staff choosing to take on extra shifts to make more money. As the wonderful Ben Goldacre pointed out on Twitter, with the affordable housing shortage in London, and recent restraints on medical staff pay, it is not surprising that staff have to do additional work to be able to live in London!

The second point is that the majority of the fees go to the staff, not the agency. Now I don’t know exactly what the average margin is for agencies, but my guess is it will be around 20%. So if real savings are to be made, the cap must address the base pay for the staff, not just limit the margin. (It probably should limit the margin as well, we should emphasise).

But what will happen if a nurse or doctor has their agency rate dramatically reduced? Well, some may be in a position that they accept it and carry on as now. Others may find that they now simply can’t afford to live or work in the most expensive areas, like London, and we could see some severe problems. For other staff, the decision process might go like this.

Act 1. The phone rings in a pleasant suburban house. It is 9 pm on Friday. A man, glass of Sauvignon Blanc in hand, answers.

- Hello, Dr Findlay here.

- Doctor, this is Sarah at the Smith Medical Agency. How do you feel about covering a 12-hour shift in A&E at Boozetown General tomorrow night. 6pm – 6am – you know, the usual?

- Not Boozetown again! I’ve done 50 hours this week already in my hospital, and that shift is a nightmare. Just aggressive drunks from 10pm onwards, I’ve been threatened with a knife, punched, had two girls throw up on me ... OK, how much are you offering?

- Well, the fee has been capped. We can only offer you £60 an hour. So that’s £720 for the shift.

- You must be joking! That’s less than half of what I got last time! By the time I’ve paid tax on that, driven the 40 miles there and back, got my clothes dry cleaned afterwards ... that’s probably less than £300 in my pocket. I’m not greedy but you know, I promised to take my wife out this weekend, we haven’t had much time together recently. I think I’ll just stick to that plan. Thanks.

The cap will initially apply to nurses but will be extended later, they say. So the key point we suspect will be how many nurses are still prepared to work at the lower rates and how many will walk away. And there may be another perverse outcome.

Suppose I am a nurse, a single mother perhaps, on £600 a week (before tax), or £120 per working day. But to survive in London, and pay my rent / mortgage, I need about £900 a week. So I fit in an extra 12 hour shift once a fortnight, for which I get about £600. That gets me to the £900 a week and just about keeps me afloat.

But now, that extra shift is being capped at, say, £300. So I have several options. I could work the extra shift every week, which will drive me to a nervous and physical breakdown. Or I move to a cheaper area of the country where I can live on £600 a week . Or ... I resign, become an agency nurse, and work 3 days a week for £900. Of course, I could give up nursing and become something that apparently carries a higher value to society – maybe a management consultant, table dancer or bond trader.

Coincidentally, in the middle of writing this article, I met a friend who is a nurse in our local Trust – objectively rated the best in the country, by the way. The other problem she highlighted is that agency nurses are not allowed to carry our certain procedures like IVs. So on some shifts, there may be only 2 employed staff nurses (out of 6 or more in total) who are rushing around doing all the complex stuff, whilst the agency staff have an easier time. “And they are getting more than three times my hourly rate” she said. Is she tempted to join them – “I could get £1000 for two 12 hours shifts a week” she says. I take that as a yes.

So no one is doubting that there is a problem here. Is the cap the right approach? I doubt it, but in the short term, the politicians may not have much more to offer until more staff are trained, processes re-engineered, or patients moved into different sorts of care (unlikely whilst local authorities are slashing social care budgets). But they have to be seen to be doing something, and this is something.

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