Big Tech Is About to Make Our Terrible Health Care System Even Worse
“It's like Uber, but for nurses.” Does that scare you? It should. Private hospitals are increasingly teaming up with Silicon Valley to make American health care even more exploitative.
America’s health care system is in crisis. As frontline health care workers abandon the field at an alarming rate, hospitals are struggling to meet staffing demands — and patients are suffering for it. But Craig Allan Ahrens, senior vice president of strategy and growth for a start-up called CareRev, has an “innovative” solution for both short-staffed hospitals and burned-out healthcare workers:
The solution isn’t overly complicated. It all goes back to supply and demand. By creating a pool of ready skilled labor willing to work as needed instead of only full-time, healthcare systems can take advantage of professionals who want to work to tackle fluctuating needs.
Translation: Uber for nurses.
The idea has been gathering steam during the COVID-19 pandemic, which has pushed America’s capitalist health care system to its limits, dramatically exposing and exacerbating preexisting issues. The imperative for health care to turn a profit has left hospitals woefully understaffed, under-resourced, and unable to properly deal with the influx of COVID-19 patients. Thus, the question of the health care labor market has been driven to the fore, with everyone agreeing that something needs to change.
But instead of acknowledging that decades of pinching pennies and cutting corners led to this chaotic juncture and course-correcting by sacrificing future profits to permanently increase capacity, major health care companies have opted for a more predictable response. They’ve united with venture capital and Silicon Valley in a depressingly on-brand pivot to the gig economy.
Saving money on labor, regardless of the outcome for workers and patients, is the name of the game in hospital management. It’s how we got into this mess to begin with. And it seems the responsible parties know better than to let a good crisis go to waste.
The Flexibility Trap
CareRev, which received $50 million in series A funding from Transformation Capital earlier last year, is just one of several companies looking to “bring a different perspective” to health care labor. The company does not employ nurses; instead, it functions as a technology-driven platform that connects hospitals needing shifts filled to nurses and other health care specialists looking for work on their own schedule. Like Uber drivers, these nurses operate as independent contractors.
Because nurses who use CareRev are not employees of the company, they aren’t eligible for benefits through it. CareRev offers its users the ability to purchase health care through a partnership with Stride Health — the same insurance broker that works with other gig work companies like Uber. And that’s as far as benefits extend. Workers using the app are left to their own devices to manage tax contributions, retirement funds, and what to do about money when they need time off.
According to proponents of the new model, it’s not the management-by-stress techniques employed by profit-focused hospital executives that are driving the labor exodus from health care. The problem is the lack of “flexibility.” It’s not understaffed and under-resourced hospital floors, according to Ahrens, but the “red tape (of) regulatory and licensing hurdles to practice” and the “onerous onboarding and credentialing processes that keep professionals in orientations instead of actually providing care” that are making people leave the profession they once cared deeply about. CareRev advertises higher wages to nurses than standard full-time employment, but in pitching the gig model to hospital administrators, Ahrens advises that “engaging professionals beyond money by focusing on flexibility is key.”
The word “flexibility” does a lot of heavy lifting in selling gig work as innovative and emancipatory for workers. However, as political scientist and author of the book Consumer Management in the Internet Age: How Customers Became Managers in the Modern Workplace Joshua Sperber told Jacobin, “Flexibility means you’re fundamentally precarious.” Sperber noted that in traditional labor markets, workers compete with each other to fill job openings, but once in the workplace, they often find shared interests and some measure of stability. With the gig economy, workers are constantly in competition with each other for the next shift. Gig companies, says Sperber:
promote the idea that you have the choice to say yes or no, pick up what hours you want or set your own rates, and in practice, that’s never going to work because you’re competing with a whole bunch of other comparably qualified professionals. So, there’s not only increasing downward pressure on wages, but there’s also pressure to accept jobs even when they’re forty miles away.
Companies like CareRev and its competitors — ShiftMed, Trusted Health, Nomad Health, connectRN — are raising tens of millions of dollars in venture capital investment because they provide value to their customers. But their customers are not the health care workers who want to earn a living on their platforms. Their actual customers are for-profit hospitals desperate to cut labor costs.
Labor historian and history professor at University of Chicago Gabriel Winant examined the relationship between neoliberal capitalism and the health care industry in his book The Next Shift: The Fall of Manufacturing and the Rise of Health Care in Rust Belt America. He spoke with Jacobin about how health care employers have historically viewed labor as a hindrance to their profits rather than facilitators of care to their patients:
Individual employers — hospitals, nursing homes, home care agencies — have incentives to try to hold down their staffing levels as much as possible, since this is the best way for them to make their margins work. In consequence, health care is run increasingly on a “lean” basis, at the bare minimum of staffing, and then, when there is a need to increase supply, firms like CareRev are positioned to profit; it’s good for them and good for hospitals but bad for workers and bad for patients.”
Lean, Mean Profit Machine
The lean paradigm and resulting worker burnout existed long before the pandemic. The focus on margins rather than patient care, justified by the assumption that the same efficiency that increased profit would also benefit patients, led hospitals to look to automotive manufacturing as the template for how health care should be administered.
Originating in the auto industry, “just-in-time” production is the practice of dynamically scaling labor, resources, and production to match demand — always ordering parts or workers at the last minute based on a real-time assessment of needs, and never keeping extra reserves on hand since doing so might be financially wasteful. For hospitals, this has meant reducing the number of hospital beds and carrying the absolute minimum of drugs and personal protective equipment (PPE). And since labor remains the biggest cost to any hospital, reducing full-time staff has become a key feature of “successful” hospital administration.
Hospital administrators will fight tooth and nail for the continued ability to put their patients’ health and their workers’ well-being in jeopardy for profit. We saw this clearly in Massachusetts, where nurses at Saint Vincent Hospital recently ended the longest nurses’ strike in state history over safe staffing levels. And the pandemic has only increased hospitals’ appetite for cheap and flexible labor.
Before the pandemic, hospitals were mostly content to supplement their lean staffing with travel nurses from staffing agencies. Travel nurses typically are engaged in six- or twelve-week contracts at the same hospital. Some eventually are hired on full-time. Travel nurses are also likely to be compensated for the expenses related to moving for a job. Hospitals spend more for temporary travel nurses than they do for ordinary full-time nurses, but as Winant explained:
Many travel nurses have put themselves in harm’s way out of a sense of obligation or a justifiable desire for a pay bump or both in the past two years, and there’s nothing wrong — and even something laudable — about the individual choice to do that. And of course, nurses should have the right to adventure and travel and mobility, just like everyone should. But this industry is currently tied to a model where hospitals don’t employ enough nurses or other workers even during normal times — don’t pay them enough or treat them with the respect they deserve — and the travel nurses are brought in to cover over that ugly reality when it starts to show.
The cost of travel nurses has increased substantially over the pandemic. Some hospitals are paying over $200 an hour for nurses to take shifts. Some agencies have begun to import nurses from other countries to meet the demand and potentially lower costs, but hospitals are becoming frustrated with the time it takes to get foreign-born medical professionals through immigration.
CareRev and its fellow harbingers of gigification are seeking to remedy this contradiction, allowing hospitals to source temporary staff locally for much less than they pay for either full-time or travel nurses. Hospitals can have cheap labor on hand when they need it, and they bear no responsibility for those workers when there’s no immediate demand for their skills. In that sense, the Uber-for-nurses model is the dystopian logical conclusion of just-in-time production as applied to health care.
And there are other benefits to the gig model for health care employers. As the Saint Vincent nurses demonstrated, unions have some ability to change their working conditions — directly through striking, but also indirectly through organizing to pass bills like they did in California, where safe staffing levels are now state mandated.
In the gig economy, there is no communal space for workers to meet and organize. Instead of talking with fellow nurses about looking for work and how they are treated by hospital administration, job seekers are stuck looking at their phones trying to decide if the shift located forty miles away is worth it. Gigification is the most direct method of labor atomization capitalism has ever employed.
The Burnout-to-Precarity Pipeline
The pandemic prompted a surge of unemployed and underemployed workers to risk their health and enter the gig economy. A recent Pew Research Center study found that 9 percent of Americans performed some sort of app-based gig labor in the past year. Most reported that it was not their main source of income but rather a way to make ends meet or to save some extra money in a financially stressful and uncertain time. Over a third of respondents said that gig work was essential or important for making ends meet, with 52 percent saying that their motivation in taking gig work was covering for fluctuations in income. Pew notes that majorities of gig workers are satisfied with the work and pay, and feelings about the lack of benefits are basically split down the middle.
There are people for whom the gig model is perfect for their needs. According to Pew, 35 percent of gig workers got into it because they wanted to be their own boss. It’s uncertain how many of those 35 percent actually enjoy “self-employment” once they are doing it.
The problem, in any case, is that gig work isn’t self-employment. Organizations like the Gig Workers Collective, led by Instacart worker Vanessa Bain, are trying to fight against the misclassification of employees as independent contractors. Bain related to Jacobin that the autonomy nominally granted to gig workers is superficial. Workers’ options are determined by ratings systems and algorithms. They do not get to set their own rates. Their compensation is also set by algorithms — and, in the case of CareRev, the deals negotiated with hospitals looking to cut labor costs.
It’s disingenuous for health care gig work companies like CareRev to sell themselves as an antidote for burnout, when in fact they’re helping hospitals facilitate the lean staffing ratios that are a major contributor to burnout. And in fact, this new trend is likely to exacerbate the burnout we’re seeing among health care workers. What Ahrens refers to derisively as the “red tape” of orientation and regulatory certification serves a useful function, preparing new staff for the demands of the job and the specific rhythms and procedures of individual hospital floors. Transient nursing drops uninitiated strangers into already stressful situations and can have the paradoxical effect of making work harder for full-time staff trying to care for their patients while also bringing new staff up to speed.
It’s not unreasonable to predict that the burnout-to-precarity pipeline that health care gig work companies are creating will result in a scenario where staffing consists mostly of gig workers spending the majority of their time split between the same few hospitals, functionally employed but treated like private contractors, their working conditions determined by someone else’s keystrokes.
The ultimate problem with this lean philosophy is not just that it’s inherently vulnerable to unpredictable events like a pandemic — though that is a serious flaw, as the last two years have demonstrated. The ultimate problem is that it treats workers and patients as little more than inputs in a system designed to generate profit. Do we want a health care system designed to heal us when we’re sick, or do we want a business scheme designed to enrich a few executives at everyone else’s expense? In the end, we can only choose one.