Nursing Wiki

History of Per Diem Nursing

Working shift by shift is not a modern departure from how nursing is organised. It is closer to how nursing began. For the first four decades of the twentieth century most American nurses were not employed by anyone: they were engaged case by case through a registry, and the salaried hospital staff nurse is the arrangement that came later.

The registry system, 1900 to 1940

Studies estimate that roughly 80 percent of practising nurses worked in private duty in the early twentieth century. A nurse took a case, usually stayed with the patient for the duration of the illness, and was paid by the patient or the family. Nurses were, in modern terms, independent contractors.

The registries existed to connect them to work. Some were run by hospital alumnae associations and placed only graduates of their own school; others were central registries, owned and run by nurses through their professional associations, serving a whole city. The New York County Registered Nurses Association opened its central registry in 1910; Chicago's local association followed in 1913 with a central directory that Lucy Van Frank ran for nearly thirty years. The American Nurses Association counted 40 central registries in 1915 and 75 by 1924, and roughly 164 professional registries were operating by 1950.

They were funded by the nurses themselves, through annual membership fees and, at the start, bond sales and contributions from members. They were also segregated. African American nurses were excluded from professional registries until the middle of the century, and in New York established their own.

Three features of that system are still recognisable: a third party matching nurses to work, a nurse who can decline, and no employer carrying the nurse between engagements.

The Depression, and the invention of per diem hospital work

The Depression removed the customer. Private duty was paid out of pocket by families, and families could not pay. Cases became shorter and scarcer, registry memberships fell, and the New York central registry closed in 1932 for want of income.

The Chicago registry's survival strategies included loan funds for members, relaxed on-call rules, and something more consequential: it encouraged hospitals to take private duty nurses on a per diem basis. That is the arrangement in its recognisable modern form, and it emerged as a way of keeping nurses fed when the private market collapsed.

Hospitals become the employer

Through the late 1930s and 1940s hospitals moved from care delivered mostly by student nurses to employing graduate nurses on staff. Technology, more complex care and private and semi-private rooms all required it. Shifts came down from twelve hours to eight in many hospitals in the late 1930s, and the requirement that nurses live on hospital grounds was gradually relaxed.

The change in the numbers is stark. By 1941 institutional staff nurses were 47 percent of active registered nurses and private duty nurses 27 percent. By 1949 only about 20 percent were in private duty. Within a decade the profession went from mostly self-employed to mostly employed, and the industrial model of nursing services displaced the registry system.

Registries did not disappear. They became what hospitals called when their own staff could not cover a shift, which is what a per diem agency still is.

The shortages of the 1970s and 1980s

By the late 1970s vacancies were acute, and hospitals were reaching for every available lever at once: local registries and per diem agencies for single shifts, international recruitment, and, from 1978, the new travel nursing agencies for longer gaps. Per diem coverage came first historically and was found insufficient on its own, which is precisely why travel staffing was invented. See the history of travel nursing.

Employers also began redesigning the schedule itself. The best known attempt started at Baylor University Medical Center in Dallas in 1981, where nurses worked two weekend days and were paid for three. Vacancies filled quickly, turnover fell, and versions of the weekend programme spread across the United States and abroad before fading as the shortage eased and the premium looked expensive again.

The pattern established in this period still holds. Flexible arrangements expand when employers cannot hire and contract when they can.

Internal pools

The obvious response to paying an agency margin for shift coverage is to keep your own roster, and hospitals built two things: per diem staff, employed by the facility with no guaranteed hours and a higher hourly rate, and float pools or internal resource pools, employed with a schedule but assigned across units.

Both remove the agency margin and keep the nurses inside the institution's own competency and orientation systems. Neither removes the underlying problem that a unit short of permanent staff is short of permanent staff. See float pools.

The pandemic, in numbers

The most recent expansion is the first one that can be measured precisely, because nursing homes have reported their contract staffing hours to Medicare since the Affordable Care Act required it.

Contract staff were 3 to 4 percent of nursing home nurse hours before the pandemic. By 2022 contract registered nurses were 7 percent of registered nurse hours, contract licensed practical nurses 11 percent and contract aides 12 percent, each more than double the pre-pandemic rate. The share of nursing homes using any contract nurses went from 19 percent in 2017 to 43 percent in 2021.

The national employment figures move with it. Registered nurses employed by staffing agencies rather than by a facility went from 57,270 in 2019 to 130,890 in 2023, while registered nurses employed by nursing homes fell 18 percent.

Then it receded, without returning to where it started: contract staff were 7.5 percent of nursing home nurse hours in early 2024, against 10.1 percent a year earlier. The same shape as every earlier cycle, this time with a measurement attached.

The platforms, 2015 onward

The most recent change is the arrival of app-based shift marketplaces, which do for a single shift what a registry did by telephone, at greater speed and with different economics. The ten most prominent platforms have raised roughly $1.4 billion between them; ShiftKey has been valued at $2 billion and Clipboard Health at $1.3 billion.

Two features distinguish them from the arrangements before. Workers are typically engaged as independent contractors rather than employees, which shifts payroll taxes, insurance and risk onto the nurse. And on some platforms the rate is not posted but bid, so two people doing the same shift on the same unit can be paid differently.

Both features are being litigated and legislated. Clipboard Health paid $2.2 million in 2021 to settle claims by former workers who said they were misclassified and not paid overtime or breaks, and suits have followed against other platforms in several states. Legislatures have been asked to define app-dispatched health care workers as contractors, with mixed results. See per diem shift apps.

What the century shows

The same three questions recur in every era: who employs the nurse, who carries the risk of an empty calendar, and who verifies that the person arriving is competent to be there.

In 1920 the answers were nobody, the nurse, and the registry. In 1960 they were the hospital, the hospital, and the hospital. On a bidding app in 2026 they are a platform that says it is not the employer, the nurse, and a document upload. The arrangement keeps returning to its starting point, and each time the profession has to argue the same points again.

Sources

Find your next nursing job here

100% free for nurses. New jobs every day. Travel, per-diem, and permanent positions nationwide.

See something out of date? Sign in to suggest an edit.