Out­sourc­ing med­i­cal staffing

Hos­pi­tals turn to man­aged-ser­vice providers to han­dle all tem­po­rary staffing chores

Modern Healthcare - - NEWS - By Michael San­dler

Ma­jor health­care staffing com­pa­nies in­creas­ingly are serv­ing as gen­eral con­trac­tors for hos­pi­tals scram­bling to staff up with con­tin­gent physi­cians and nurses. Some hos­pi­tals say that work­ing with staffing firms un­der the so­called man­aged-ser­vice provider model has helped them cope with se­vere short­ages, and that MSPs have served them bet­ter than hav­ing to deal di­rectly with in­di­vid­ual staffing firms to lo­cate and place can­di­dates. MSPs can be used by health­care providers to cover them­selves in a va­ri­ety of sit­u­a­tions, from sim­ply fill­ing slots for a cer­tain shift to flex­ing up dur­ing a mas­sive sys­tem over­haul such as an in­for­ma­tion tech­nol­ogy in­stal­la­tion.

This trend comes as the health­care staffing industry ex­pe­ri­ences record rev­enue and growth in 2015. Staffing firms are bat­tling for a com­pet­i­tive edge. Ma­jor firms of­fer­ing the MSP model in­clude AMN Health­care, Cross Coun­try Health­care and Par­al­lon.

With the Af­ford­able Care Act ex­pand­ing in­sur­ance cov­er­age, mil­lions of baby boomers mov­ing into their se­nior years and a large co­hort of doc­tors and nurses re­tir­ing, providers are in dire need of med­i­cal pro­fes-

sion­als. Ac­cord­ingly, con­tract la­bor costs are soar­ing. Nashville-based HCA re­ported its con­tract la­bor in­creased 35.5% in the third quar­ter of 2015 com­pared with the same time frame a year ago. Livo­nia, Mich.-based Trin­ity Health saw its con­tract la­bor costs bal­loon 15.9% for the fis­cal year ended June 30.

Some hos­pi­tals and health sys­tems are turn­ing to the MSP model so they don’t have to ded­i­cate as much time and resources to find­ing qual­i­fied pro­fes­sion­als. Un­der the model, they out­source the role of deal­ing with staffing firms, let­ting the MSP han­dle not only re­cruit­ing, but some­times also cre­den­tial­ing. MSP pro­po­nents say this al­lows hos­pi­tals to fo­cus on pro­vid­ing care for pa­tients, rather than scour­ing staffing firms for po­ten­tial can­di­dates.

Some MSPs have their own locum tenens divi­sion and can sup­ply the physi­cians. Those that don’t have such a divi­sion work with staffing firms as sub­con­trac­tors. All com­mu­ni­ca­tion about the avail­able physi­cian and nurs­ing spots oc­curs be­tween the MSP and the sub­con­trac­tor. But AMN and Cross Coun­try say com­mu­ni­ca­tion be­tween all stake­hold­ers is im­por­tant.

“No one wants to call 30 agen­cies to get a job filled,” said Janet Elkin, CEO of Sup­ple­men­tal Health Care, a health­care staffing firm based in Park City, Utah, which of­fers MSP ser­vices.

But some locum tenens firms say the in­volve­ment of MSPs can cre­ate lo­gis­ti­cal and pay­ment bot­tle­necks that turn off health­care pro­fes­sion­als. An ex­ec­u­tive at one locum tenens firm al­leged that MSPs some­times en­gage in un­eth­i­cal prac­tices to grab re­cruit­ing fees away from them.

The MSP model ear­lier pen­e­trated other in­dus­tries such as in­for­ma­tion tech­nol­ogy and manufacturing, and MSP temp/con­tract spend­ing re­mains higher in those sec­tors than in health­care. Ac­cord­ing to Staffing Industry An­a­lysts’ 2015 VMS and MSP Com­pet­i­tive Land­scape study re­leased in July, 36% of MSP/temp con­tract­ing spend­ing in the U.S. is in IT and 16% in manufacturing, com­pared with 7% in health­care.

Hospi­tal sys­tems in­creas­ingly are rec­og­niz­ing how the MSP model could ben­e­fit them, said Sean Eb­ner, pres­i­dent of Staff Care, whose par­ent com­pany, AMN Health­care, has pro­vided locum tenens physi­cians with the MSP model since 2012. Get­ting tal­ent at the right time and at the right level is the No. 1 cost for hos­pi­tals, he said.

Even so, sat­is­fac­tion scores for the MSP model are drop­ping. Ac­cord­ing to the trade pub­li­ca­tion Staffing Industry An­a­lysts’ 2014 Con­tin­gent Buy­ers Sur­vey: Sat­is­fac­tion with Staffing Sup­pli­ers, VMS, MSP, and Job Boards, the num­ber of clients that would rec­om­mend an MSP ser­vice dropped to 18% in 2014 from 27% in 2011.

Staffing Industry An­a­lysts projects a siz­zling 17% rev­enue growth for health­care staffing in 2015, com­pared with 7% growth last year. The firms are ex­pected to gar­ner $12.7 bil­lion in rev­enue in 2015, the most ever. In par­tic­u­lar, rev­enue for physi­cian staffing firms and travel nurse staffing firms is ex­pected to bal­loon 20% and 23%, re­spec­tively, ac­cord­ing to the pub­li­ca­tion.

Com­pe­ti­tion among staffing firms is in­tense. Less than 5% of to­tal staffing at U.S. hos­pi­tals is filled by tem­po­rary staff, said A.J. Rice, man­ag­ing di­rec­tor at UBS. But hos­pi­tals rep­re­sent a $1 tril­lion industry over­all, so even a small uptick in the per­cent­age of out­sourced doc­tors and nurses means a lot of money.

As the bat­tle in­ten­si­fies over that 5% mar­ket share, com­pa­nies such as AMN Health­care and Cross Coun­try have be­gun of­fer­ing an MSP to rapidly fill spots at hos­pi­tals and stream­line the process. Com­pa­nies such as Cross Coun­try be­gan of­fer­ing an MSP op­tion in the late 1990s. But only in the past two years have Cross Coun­try and ri­val AMN Health­care be­gun of­fer­ing the ser­vices of locum tenens physi­cians within their MSP model.

To suc­ceed, an MSP firm of­ten must get closely in­volved in a provider client’s op­er­a­tions, ac­cord­ing to some hospi­tal ex­ec­u­tives who have used the model.

About 15 months ago, the three-cam­pus Aria Health sys­tem in Philadel­phia de­cided to switch its model of staffing from a con­tract man­age­ment group and in­stead start its own physi­cian man­age­ment op­er­a­tion. Dur­ing the tran­si­tion, there was a need to fill va­can­cies rapidly, said Dr. Ger­ald Wy­dro, Aria’s chair of emer­gency medicine.

So AMN Health­care stepped in with its MSP model to help Aria with re­cruit­ment, cre­den­tial­ing, on­board­ing and sched­ul­ing, Wy­dro said. “We needed much more than a few locums doc­tors,” he said. “We needed a whole sys­tem.” The process took a year, Wy­dro said. AMN placed a man­ager on-site for sev­eral months. The com­pany also em­bed­ded cre­den­tial­ing spe­cial­ists within Aria’s cre­den­tial­ing of­fice, Wy­dro said. AMN cre­ated a large pool of physi­cian can­di­dates from which Aria was able to fill open spots. The hospi­tal sys­tem didn’t have to worry about mak­ing a lot of phone calls to lo­cate physi­cians.

In ad­di­tion to the more stream­lined process, doc­tors lo­cated by AMN were much more en­gaged than reg­u­lar locums tenens physi­cians, Wy­dro said. He be­lieves that was be­cause the MSP was em­bed­ded at Aria, and AMN staff mem­bers were com­mit­ted to the health sys­tem ev­ery step of the way. “If we would have used five locums com­pa­nies, we would have failed at this,” he said. “We also would have failed with­out on-site MSP lead­er­ship.”

It’s more ex­pen­sive to go with the MSP model, Wy­dro ac­knowl­edged. So sys­tems must de­cide if the model will im­prove their abil­ity to pro­vide safe and ef­fec­tive care, mak­ing the ex­tra ex­pen­di­tures worth­while.

Aria’s pa­tient-sat­is­fac­tion scores from Press Ganey for its emer­gency depart­ment rose while the MSP was in place, ac­cord­ing to num­bers sup­plied by Aria. The score hov­ered around 76 in July 2014, when AMN’s MSP took over. It hit 86 in Novem­ber 2014, and was at 84 in July 2015 when the sys­tem stopped us­ing the AMN physi­cians.

Whether hir­ing an MSP can save a hospi­tal money de­pends on the hospi­tal, said Joanne Spetz, an eco­nom­ics pro­fes­sor at the Univer­sity of Cal­i­for­nia at San Fran­cisco. If a fa­cil­ity faces sig­nif­i­cant fluc­tu­a­tions in its staffing needs, hav­ing a con­trac­tor help man­age staffing can be ef­fi­cient, she said. Also, there could be ad­van­tages re­lated to hav­ing the con­trac­tor take re­spon­si­bil­ity for screen­ing and cre­den­tial­ing. “But, if you have a strong HR de­part-

Some locum tenens firms say the in­volve­ment of MSPs can cre­ate lo­gis­ti­cal and pay­ment bot­tle­necks that turn off health­care pro­fes­sion­als.

ment and rel­a­tively sta­ble needs, you may be less likely to ben­e­fit from this model,” she said.

Bos­ton Med­i­cal Cen­ter used Sup­ple­men­tal Health Care’s MSP two years ago when it was pre­par­ing to con­vert to an Epic Sys­tems Corp. elec­tronic health record for in­pa­tients, said Nancy Gaden, Bos­ton Med­i­cal’s se­nior vice pres­i­dent and chief nurs­ing of­fi­cer. Sup­ple­men­tal re­cruited work­ers to cover for Bos­ton Med­i­cal’s staff nurses while they were train­ing on the new Epic EHR. Sup­ple­men­tal also aug­mented the nurse staffing af­ter the new sys­tem went live, al­low­ing staff nurses to see fewer pa­tients dur­ing the post-launch pe­riod of re­duced pro­duc­tiv­ity, Gaden said.

Bos­ton Med­i­cal was at­tracted to the MSP be­cause of its abil­ity to ramp up quickly, she said. The hospi­tal was look­ing for 100 or more nurses and was seek­ing cov­er­age for all three shifts. Sup­ple­men­tal’s model was a cost-ef­fec­tive way to gear up in the short-term and was very tar­geted, she said. “Most of the time, it’s been great,” Gaden said, of­fer­ing a caveat on MSPs: “They aren’t magic, they can’t clone peo­ple.”

But some locum tenens firms are not happy about the MSP model. Melissa By­ing­ton, pres­i­dent of Comp-Health’s locum tenens divi­sion, said sit­u­a­tions arise when a staffing sub­con­trac­tor sub­mits a physi­cian job can­di­date to the MSP, which re­jects the can­di­date. The same physi­cian is then con­tacted by the MSP com­pany’s in-house locum tenens divi­sion, and the physi­cian gets the job, with all the fees go­ing to the MSP’s locum tenens divi­sion, By­ing­ton said.

Pay­ment also can be a prob­lem, By­ing­ton said. If the tem- po­rary doc­tor has a pay­ment dis­pute with the hospi­tal, the MSP will hold off on pay­ing the doc­tor un­til a de­ci­sion is made. The hospi­tal’s ac­counts re­ceiv­able depart­ment has to re­view the pa­per­work, which slows the process, By­ing­ton said. An MSP does not al­low any com­mu­ni­ca­tion be­tween the sub­con­trac­tor and hospi­tal, so the sub­con­trac­tor is left in the dark while re­main­ing on the hook for pay­ing the physi­cian, By­ing­ton said. And sub­con­trac­tors don’t have deep pock­ets like the larger MSP com­pa­nies do, she said.

The lack of com­mu­ni­ca­tion can also cause fric­tion with physi­cians who are job can­di­dates, By­ing­ton said. A can­di­date may have gen­eral ques­tions about a hospi­tal’s op­er­a­tions, but the can­di­date and sub­con­trac­tor have to wait on the MSP to get the an­swer from the hospi­tal, she said. When the can­di­date is forced to wait for an an­swer, which can take weeks, the can­di­date may move on to a dif­fer­ent staffing com­pany, she said.

“If I’m a good doc­tor, I’m not go­ing to wait three weeks for an an­swer,” By­ing­ton said. “I’ll take my skills else­where to a new staffing com­pany, and maybe I don’t go back to the same hospi­tal again.”

Bob Mur­phy, pres­i­dent of work­force so­lu­tions at Cross Coun­try Staffing, which of­fers MSP ser­vices, ac­knowl­edged that while it’s com­mon to hear com­plaints about hav­ing a third party be­tween the hospi­tal and the staffing com­pany, most sub­con­trac­tors view MSPs fa­vor­ably as an ex­ten­sion of their sales force. Mur­phy said sub­con­trac­tors see the MSP as be­ing able to add a lot more op­tions to what they of­fer.

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