Leaders of Litehouse Health Inc., a Spokane-based startup company, say they have developed a solution to the widespread nursing shortage that also improves health systems’ bottom lines and workforce morale.

Through its app, Litehouse provides acute care hospitals with on-demand, local nurses, reducing a reliance on travel nurses that was exacerbated by the COVID-19 pandemic.

“What Litehouse Health wants to do is provide an alternative, a local alternative, because there’s so much talent locally,” says Jason Thielbahr, chief business officer at Litehouse. “If a hospital has a shift to fill, Litehouse is going to have its own source of its W-2 nurses to fill open shifts.”

Litehouse has already landed a contract with one of the largest health systems in the country, says Litehouse CEO David Heath, who co-founded the company with chief nursing officer Dr. Ellen Kuhnert and chief technical officer Justin Schaper.

Heath declines to disclose which health system Litehouse has contracted with but says it “operates predominantly west of the Rockies.”

The startup is in contact with other large health systems around the country, he says.

Litehouse’s software has been in development since April, Thielbahr says. The Spokane startup currently has six full-time employees who all work remotely.

In July, Litehouse closed $3.5 million in series seed financing led by Spokane-based Kick-Start Seed Fund, and including participation from members of the Spokane Angel Alliance, local health care professionals, and technology investors.

The company invested those funds heavily into Litehouse’s technology, Heath says.

“The app has formally launched,” Heath says. “Our landing page for our website is up. These will continue to build out into the first quarter of next year, and it will be about 95% by March, but operational now.”

Litehouse will begin filling shifts in January, Heath says.

To earn revenue, Litehouse will take a cut of the revenue from each shift that is filled, Heath says. It also will have a SaaS—software as a service—revenue stream from the hospitals that use its technology, Thielbahr says.

“Our software integrates with the hospitals’ scheduling time and attendance,” Heath says. “It’s easier for the scheduler, it’s seamless.”

After technology, the next largest investment the startup is making goes toward recruiting nurses.

“We expect to have by February or March over 1,000 nurses on our platform,” Heath says. “By the end of 2024, we expect to have 5,000 to 6,000 nurses on our platform.”

Many of those nurses are already lined up and just waiting to be activated to start filling shifts, Thielbahr says. 

“For a marketplace like Spokane, we think ultimately we’ll have 250 to 350 nurses taking shifts here,” Heath says.

Nurses employed by Litehouse will be part-time employees who will work between zero and 30 hours per week and will not receive benefits. Heath says, however, that about half of the nurses they’ve recruited so far already have full-time jobs, and their roles with Litehouse will be similar to a “side hustle.”

“We are not in the full-time business,” Heath says. “We are not competing with health systems for staff. We’re bringing people off the sidelines that otherwise they’re not recruiting, because they can’t meet that hospital’s work requirements.”

About 100,000 registered nurses left the workforce during the pandemic, and over 600,000 RNs reported an intent to leave the workforce by 2027 due to stress, burnout, or retirement, according to a study conducted by the National Council of State Boards of Nursing. That accounts for about one-fifth of RNs nationwide.

In 2022, Renton, Washington-based Providence implemented a new operating structure at its Inland Northwest facilities that eliminated some leadership roles and decreased reliance on travel nurses, the Journal previously reported.

According to Heath, however, travel nurses are still being relied upon heavily to combat the nursing shortage.

“Travel nurses were originally used for very specialized situations,” Heath says. “The hospital—and ultimately the patient—is paying for the plane ticket, the hotel, the per diem expense per day for a 13-day contract, on top of a really good pay rate.”

Bill Robertson, CEO of Tacoma, Washington-based MultiCare, told the Journal in June that increased labor costs, stemming at least partially from the increase in travel nurses, was a main contributor to the increase in operating losses suffered by MultiCare in 2022 and the first half of 2023.

Hospitals in Washington state reported a total of $2.1 billion in operating losses in 2022, and $750 million through the first half of 2023, Washington state Hospital Association data shows.

Travel nurses typically make at least twice as much as full-time, local nurses, Heath says.

Litehouse’s “gig nurses” can provide hospitals with an alternative to using higher-cost travel nurses, Heath says.

“There’s an untapped, latent talent supply out there,” Heath says. “There are many nurses on the sidelines because of the pandemic, and before (the pandemic) because of the job requirements that hospital systems demand. Now there’s a third way.”

Factors like child care, burnout, stringent work requirements, and lack of flexibility have led to many nurses leaving their full-time positions at hospitals, Heath says.

“If you have children, young children, and you can’t get consistent daycare, how do you keep a full-time job, let alone work a 12-hour shift?” Heath asks. “If a nurse, however, can work when he or she wants to, that amount of autonomy and freedom makes a big difference.”

Both Litehouse-approved nurses and hospital schedulers will be able to use the Litehouse app to find, or post and fill open shifts, respectively, Heath says.

“Every time a nurse needs to be called in, it’s a one-to-one SMS text,” Heath says. “Imagine now being able to do that at scale, where you’ve got 300 nurses in your pool, and you send out a message and it hits all of them.”

Litehouse employs its nurses on a W-2 structure, instead of a 1099 model, which would make the nurses independent contractors.

“All the indicators from the Department of Labor, from hospital systems is there needs to be an employer of record for a nurse working in a hospital,” Heath says. “From a regulatory perspective, the industry is leaning in now very hard coming out of the pandemic that a nurse needs an employer of record.”

Heath says this is especially true in West Coast states, and that it’s mostly about safety and accountability. He says alignment of employer of record drives better patient care.

Litehouse plans to employ all types of RNs and certified nursing assistants, Thielbahr says.

Heath says Litehouse intends to provide top-line nursing talent.

“We make sure that any nurse who ever takes a shift at one of our partners’ hospitals meets or exceeds their criteria,” Heath says. “All of your credentials have to be verified. We do a clinician-to-clinician interview, and that’s just to get a nurse onboarded, so we know that nurse is competent to work as a nurse.”

After the onboarding process, nurses have to work to meet each health systems’ requirements before they can fill shifts for that health system. Each health system, and even each individual hospital within a health system, has different requirements nurses must meet, Heath says.

“It can take up to 18 to 20 hours for a nurse to meet the hospital’s spec before he or she can ever take a shift,” Heath says. “It’s a very active partnership with the health system to ensure that the nurses who we deploy on their behalf are at their spec.”

In terms of meeting requirements and having the necessary qualifications, Heath says the process is comparable to a nurse going through the hiring process to be a regular full-time employee for a health system or hospital.

Litehouse is also in the process of pursuing its Joint Commission Accreditation, which Thielbahr describes as the industry standard for effective health care practices. He expects Litehouse will receive that accreditation by May or June.

Hospitals determine the rate structures for Litehouse nurses, Heath says. Litehouse nurses won’t make nearly as much as travel nurses, he says, but they will make a little more than what full-time nurses employed by the health systems are making, because they aren’t receiving benefits packages through Litehouse or the health system at which they are filling shifts.

“It’s got to be enough to get people to come to work, and (hospitals) can do that and save a heck of a lot of money from travel,” Heath says. “And their full-time staff doesn’t feel burned.”