Utilisation and costs of nursing agencies in the South African public health sector, 2005–2010

Background Globally, insufficient information exists on the costs of nursing agencies, which are temporary employment service providers that supply nurses to health establishments and/or private individuals. Objective The aim of the study was to determine the utilisation and direct costs of nursing agencies in the South African public health sector. Design A survey of all nine provincial health departments was conducted to determine utilisation and management of nursing agencies. The costs of nursing agencies were assumed to be equivalent to expenditure. Provincial health expenditure was obtained for five financial years (2005/6-2009/10) from the national Basic Accounting System database, and analysed using Microsoft Excel. Each of the 166,466 expenditure line items was coded. The total personnel and nursing agency expenditure was calculated for each financial year and for each province. Nursing agency expenditure as a percentage of the total personnel expenditure was then calculated. The nursing agency expenditure for South Africa is the total of all provincial expenditure. The 2009/10 annual government salary scales for different categories of nurses were used to calculate the number of permanent nurses who could have been employed in lieu of agency expenditure. All expenditure is expressed in South African rands (R; US$1 ∼ R7, 2010 prices). Results Only five provinces reported utilisation of nursing agencies, but all provinces showed agency expenditure. In the 2009/10 financial year, R1.49 billion (US$212.64 million) was spent on nursing agencies in the public health sector. In the same year, agency expenditure ranged from a low of R36.45 million (US$5.20 million) in Mpumalanga Province (mixed urban-rural) to a high of R356.43 million (US$50.92 million) in the Eastern Cape Province (mixed urban-rural). Agency expenditure as a percentage of personnel expenditure ranged from 0.96% in KwaZulu-Natal Province (mixed urban-rural) to 11.96% in the Northern Cape Province (rural). In that financial year, a total of 5369 registered nurses could have been employed in lieu of nursing agency expenditure. Conclusions The study findings should inform workforce planning in South Africa. There is a need for uniform policies and improved management of commercial nursing agencies in the public health sector.