How's Your Health?

Is there a nurse in the house? It's a familiar refrain these days as more and more medical facilities are understaffed after years of cutbacks. A Department of Health and Human Services study released in February 2002 found that 90 percent of U.S. nursing homes are providing substandard care.

"There's a critical nursing shortage because nurses aren't being paid what they're worth," says Pascualita Rodriguez, 47. She's the founder, owner and director of Palm Medical Staffing, a Seattle company that subcontracts nurses to hospitals, nursing homes and private-care situations. The nurses she contracts are looking for more flexibility and better pay than they earn at hospitals. The average licensed practical nurse working in a hospital earns about $12 to $13 an hour, Rodriguez says, a figure that can rise dramatically to $30 an hour or higher when they become contractors.

Rodriguez had 31 years of nursing experience before going into business for herself. At first, she was a one-woman show, running between nursing jobs to build her company. It didn't take her long to land contracts with two major nursing facilities, and she recruited her first nurses through want ads and word-of-mouth. "In a short amount of time, I had people calling me for work," she says.

Her start-up costs were about $5,000, and she used her personal savings to finance her first payroll. Today, Rodriguez outsources 22 nurses and has at least five active clients at any given time who assign these nurses to jobs on a month-to-month, as-needed basis. Palm Medical Staffing's sales reached $800,000 last year.

If you want to get into health-care outsourcing, you need to understand medical reimbursement cycles, she says, because cash flow and collection can be a big challenge. Rodriguez has survived situations where she's had $20,000 in payroll and no money coming in, and she's had competitors who have lasted only a few months.

"Some clients pay late," she says. "If you don't stay on top of them, they'll sit on those reimbursements for as long as they possibly can." Rodriguez developed an aggressive collections system so reimbursements "come in like clockwork." The other constant challenge is finding skilled nurses. "It's very competitive," she says.

Given the success of Palm Medical Staffing, Rodriguez plans to expand to Hawaii and San Francisco. "Even in the worst [economic] times, you're going to need a doctor or a nurse," she says. "I feel like I'm making a difference by providing good nurses."

This article was originally published in the July 2002 print edition of Entrepreneur with the headline: How's Your Health?.