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Thread: How much does a healthcare agency make?

  1. #1
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    How much does a healthcare agency make?

    I'm on workers comp 100% disabled. My nurse gets $20 an hr. How much does wc pay her agency she works for? I've heard 2-4 times more.

  2. #2
    I know that a few agencies that I've contracted pay their CNAs ~$9/hr, and they charged me $20/hr. So about 2x more.

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    EyesOfTexas; Do you pay the carer yourself ? Do you do the Payroll/withholding taxes out of that 50%? Do you pay the required workman's comp out of that $9.

    It is pretty fair to say that required payroll deductions the Agency is obligated to pay out, are somewhere near another 50% to 60% that the Agency has to cover. That $9 becomes $13.50 to $14.40 all depending what kind of agreement your carer with her Agency.

    So they likely make $5 more or less on every worker they send out. They must also cover their own overhead out of that $5+/-. Your carer may also be eligible for some sort of Health Care insurance as a part of their work contract. But "I" do not Know what her/his agreements are.

    It is enough to say that any employee sent to your home, actually costs much more than the Agency actually pays the carer. The Agency is of course the carer's employer, not you. They must have some sort of liability insurance as well. NO insurance company insures such an agency cheaply.

  4. #4
    Quote Originally Posted by EyesOfTexas View Post
    I know that a few agencies that I've contracted pay their CNAs ~$9/hr, and they charged me $20/hr. So about 2x more.
    Actually, can confirm that this is NOT accurate. Reference: am a COO of an agency.

    The gross profit margins may seem high, but Bob Sullivan nailed it on the head. Between overhead, insurance, and caregiver salaries, we make less than half of what you might assume in net profits. I'll tell you right now that I know agency owners who act as care managers and work 14+ hr days regularly, for less than what you would think. Plus being on-call 24/7 if your team just can't make a shift. Not to mention constant stress in terms of the client's condition, caregiver performance, and so many other things. Being involved in a care agency is so much less .. easy, for lack of a better word... Than people could possibly imagine (and probably assume).

    (The take home is dollars per hour per caregiver. Depends on rates and pay, rent, insurance, and other overhead considerations.)

    Thanks for reading.

  5. #5
    I'm not sure how applicable this is to the US but would think it should be similar. Our agency charges ?14.50 an hour, care workers get ?8.50 an hour. Care workers pay their own income tax, agency covers their holiday pay, employers national insurance. We looked into running care ourselves and could make a few savings but also pay a higher hourly rate. Our biggest problem is a lack of staff which we might struggle to change. Agency has to advertise which is expensive to do and comes out of the profit they make. I've got no doubt that if we get a full team we'll end up running it ourselves as I know we'd retain staff if we paid more.

  6. #6
    Senior Member Wesley's Avatar
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    The other expense for an agency that I didn't see brought up yet is the cost of paperwork. Dealing with insurance companies, Medicare, state agencies, payrolls, billing... all costs money. That's why mom-and-pop agencies are either going out of business or being bought up by larger companies that can spread this overhead over a larger number of clients.

    I know a couple cases where the insurance companies are cooperative enough that they allow clients to hire their own caregivers. One guy with this situation has made the whole thing into a family business with his mom and sisters essentially being paid to take care of him. The situation is sad because the family has kept him from becoming more independent because that would reduce their work.

  7. #7
    The Agencies do make good money for not bearing the brunt of the work. Keep in mind they do have to pay for things like advertising costs ect. to actually find the patients so they do not take home 100% of the difference.

    A nice comparison would be to see what the going rate is on craigslist for a caregiver. Most of the time they will be a bit more expensive than what an agency would pay directly to the employee. And for less of a hassle you are better off paying a bit more of a spread.

  8. #8
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    Quote Originally Posted by Bob Sullivan View Post
    EyesOfTexas; Do you pay the carer yourself ? Do you do the Payroll/withholding taxes out of that 50%? Do you pay the required workman's comp out of that $9.

    It is pretty fair to say that required payroll deductions the Agency is obligated to pay out, are somewhere near another 50% to 60% that the Agency has to cover. That $9 becomes $13.50 to $14.40 all depending what kind of agreement your carer with her Agency.

    So they likely make $5 more or less on every worker they send out. They must also cover their own overhead out of that $5+/-. Your carer may also be eligible for some sort of Health Care insurance as a part of their work contract. But "I" do not Know what her/his agreements are.

    It is enough to say that any employee sent to your home, actually costs much more than the Agency actually pays the carer. The Agency is of course the carer's employer, not you. They must have some sort of liability insurance as well. NO insurance company insures such an agency cheaply.
    Revisiting this topic. I appreciate the info. However it didn't answer my question. If I'm paying the agency myself for a LPN for 12hrs a day 5 days a week and the LPN makes $20hr. How much an hr would I be paying the agency?

  9. #9
    It varies with the agency, but it is common for the agency to bill at 130-150% of what the actual nurse makes per hour.

    (KLD)

  10. #10
    Agencies in any industry will always add a markup so try to avoid them where possible. However, healthcare agencies do provide a valuable service and often take their work more seriously so it could be well worth it!

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