All Healthcare Staffing Firms Should Work Together to Embrace Best Practices With MSPs

global healthcareAs president of workforce solutions for AMN Healthcare, I take exception with Colleen Mills’ recent blog post, Why Small Healthcare Staffing Firms Should Take a Stand on VMS/MSP. A well-run MSP model bases its value on metrics, such as fill rates, and depends on the success of its affiliate vendors. Many staffing firms have long standing relationships with their MSP partners that have resulted in greater growth and profitability.

Over the past 30 years, businesses in every major sector around the world have embraced flexible work force solutions to create greater degrees of efficiency for our clients. We can neither sit on the sidelines and let our clients dictate how these programs work nor can we simply wish these programs away.

As this year’s chairman of the American Staffing Association, one of the planks of my platform is to develop best practices with respect to staffing firm and MSP/VMS relationships. Such best practices will provide win-win solutions for staffing firms, clients, MSPs/VMSs, and assigned employees. Staffing firms of all sizes have come together to form a task force and will have invested hundreds of hours collectively to develop tools to help influence the client contracting process and on-going operations of MSP and VMS relationships with their affiliate vendors. We expect to deliver on this initiative in the next couple of months.

PREMIUM CONTENT: Healthcare RPO: What does it take to succeed?

I strongly urge all staffing firms — healthcare or otherwise — that are not already members of ASA to join the association and become part of the process to make client service even better. Better client service will benefit MSPs/VMSs, healthcare staffing firms, and, most important, our dual clients: healthcare facilities and healthcare professionals.

MORE: Get on the Radar: How to sell to an MSP Successfully

Bob Livonius
Bob Livonius is president, strategic workforce solutions, for AMN Healthcare. He can be reached at bob.livonius (at) amnhealthcare (dot) com.

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15 comments
ytim20
ytim20

I read this blog with interest and then I saw one of the executives for AMN blather about metrics and all that stuff. I think he is full of baloney. He does not care one bit about nurses or quality of care. All he cares about is locking up clients on agreements that they have to work through his company. And he does it by offering them dirt cheap rates. I worked for a local agency for many years at fair market rates. Then his company took over the facility and all of a sudden my agency came to me and said they had to reduce my pay rate by $3.00 an hour because our bill rates have now been reduced by $7.00 - $800 an hour with this new agreement. And also , we no longer can book you directly because we now have to work through AMN / Nursefinders and they are first call / last cancel. I liked my agency and felt bad for them so I said OK , if you cannot find anything else for me I will consider working there. Work got slow and so I agreed to let them book me there even though the pay rate was significantly less than the other facilities I worked at , well the first three shifts got cancelled and when I finally got to work  I was not on my shift 30 minutes when I was a approached by a representative of Nursefinders ( she was a nurse walking the floor like she owned the joint) trying to put the squeeze on by telling me that “you know we are first call/ last cancel here so you would be better off signing up directly with us because you will get more work that way”. I told my agency about that and they said that it happens all the time and that there is nothing they can do about it and that is why the facility is now very low on their priority to fill. I told them to never ask me to go there again. Fortunately they found me a 13 week local contract shortly thereafter at another hospital. My question to agencies is this why would you agree to this?. It seems like very bad business and even if you don’t get that part (DAH!) please understand that by letting these people lower rates you are hurting your nurses and our profession. So even if you can’t stand up for yourselves think about standing up for your nurses. Interestingly enough after about a year the facility kicked Nursefinder’s out because the program was not working but it did lot of harm in the meantime by ruining relationships and alienating nurses. I have since taken a staff job that I hate but I had no choice because people like this guy at AMN are ruining the agency market by treating nurses as commodities and offering cheap rates to hospitals which in effect suppresses our pay rates and takes away our options. A bunch of nurse staffing agencies have gone out of business  over the last couple years and I think part of this guy’s master plan is to eliminate the competition so then it will be just big companies like his and the hospitals,  and then they can really put the screws to the nurses even more. We nurses need to stick together, talk with your local agencies and just say no to working at facilities that are controlled by these type companies who do not value us or our profession.

staffnu123
staffnu123

I think that one thing Mr. Livonius can understand, and appreciate, is that small to medium size agencies are not necessarily trying to abolish VMS/MSP.  Large corporations such as AMN have resources that are unavailable to the small to medium size agencies. In my opinion, I believe that what Colleen is trying to accomplish as a whole is to establish a collective "voice" among the small to medium size agencies in order to negotiate and demand fair contract terms when partnering with VMS/MSP.  Most of us are not asking for outrageously high bill rates or unreasonable contract terms.  We simply want fair rates and terms based on geographical benchmarks.  In my experience, VMS/MSP providers are offering terms that are well below the standard in the industry.  As Mr. Swan clearly pointed out in his post below, we do live in a free market society where in most cases the "big fish" eat the "little fish".  However, there is strength in numbers and I believe Colleen's mission with the National Healthcare Staffing Alliance is to band together the small to medium size agencies in order to have a more collective voice.  It is ludicrous to think that agencies banning together to fight for more equitable terms when dealing with VMS/MSP is detrimental to the client facilities.  No one is asking for one sided terms in favor of the subcontracting vendors, but rather even terms for all that are involved.  .

staffnu123
staffnu123

If you could please share with me where you obtained the data for your quote  "Many staffing firms have long standing relationships with their MSP partners that have resulted in greater growth and profitability."  My company has directly contracted with the company you run in the past and I can honestly say you will need to come a LONG way to show even a slight improvement regarding the treatment of subcontracting agencies.  This was the worst contracting relationship I have ever taken part in.  Not only were the pay rates and payment terms ridiculous, receiving payment from the client was arduous and lengthy at best.  Invoices we submitted were actually consolidated with other agency invoices prior to submission to clients and if their was an issue on any part of the invoice, even if it wasn't with one of our invoice items, the client would not pay until the issue was resolved.  The contract also included laughable payment terms.  The contract stated our agency would be paid 10 days from the date your company received payment from the facility.  Not only did we have no way of knowing when your company was paid by the client but it could actually mean that our agency may never get paid.  I would love to have some information regarding this "task force" you speak of and what agencies it is comprised of.  With regard to your statement about joining the ASA, I think it can be seen by who sits on the board whose interests are represented by the ASA.  I think my dues are better spent on an association that represents my companies interests such as the National Healthcare Staffing Alliance (NHSA).

NurseAdvocate67
NurseAdvocate67 like.author.displayName 1 Like

Response to Bob Livonius (Part 2): Companies like AMN and Medassets have exploited the economic downturn and done what may be irreparable damage to our industry by turning us into a commodity. But we only have our own selves to blame for ever saying yes to unfair and below market rates, onerous and one sided terms and conditions and surrendering contact with our clients. BTW I know of a number of very smart hospitals who wanted automated staffing software , uniform contracts, fair and consistent terms and conditions and fair market rates and did it themselves without adding a third party to the equation. They simply put together a uniform agreement complete with fair market pricing and equitable terms and conditions and secured staffing software directly from any number of software vendors and intelligently achieved their objectives.  And please don’t insult our intelligence by suggesting that we simply don’t get it and want to hold on to doing business the “old way”. I pray that time will expose these companies for the scourges they are and I hope that all honest, hard working companies wake up and say NO to these vultures NOW before it is too late. We have given our clients and these VMS/MSP parasites the sticks with which they beat us. Let’s take them back!            

NurseAdvocate67
NurseAdvocate67

Response to Bob Livonius (Part 1): Looks like the usual suspects got the word to line up for some more kool aid and to bang the drum that VMS/MSP programs have been good for their business. Come on, wake up, look around, nobody is buying that! SIA’s own research reported that something like 83% of agencies have negative opinions of working with VMS and MSP programs.  I maintain that the other  17% are companies who provide MSP services, and of course a few of the flunkies who would could not earn business on their own merit by providing service and quality and solely depend on MSP and VMS companies to open new accounts for them. If you are happy seeing your bill rates reduced by $8-10 an hour and if you are happy getting table scraps from the MSP companies you work with in the form of needs they can’t fill I say you deserve each other. I will speak to the vast majority of independent thinking business owners and operators who say let the market place and supply and demand control prices not some company who makes a pitch to the bean counters at a hospital and tells them “I can cut their agency cost by 20% and bring your current suppliers to their knees” (actual pitch made to one of my clients by a VMS provider). 

dianagabriel
dianagabriel

I find this to be an important spirited exchange of perspective and opinion. Neither is right or wrong, but about how and what one needs/wants from working or not working with MSP/VMS model. The fact that the conversations continue is important to all who are currently involved or are considering involvement.

colleenmills
colleenmills like.author.displayName 1 Like

Well Bob I must respectfully take issue with you on a few points. When you state that metrics are your primary value as an MSP you create a conflict of values between the MSP and their smaller sub-contractors.  Do margins matter – YES.   Does profitability matter – Of COURSE!  It is important to state here that the sub-contractors are just as smart, sophisticated and focused on the business metrics of revenues, margins and profits.Generally speaking, large companies are worried about taking care of their stockholders, while the small business owners also focus on their personal values and sensibilities that drive their operations.  Healthcare staffing is a service sector business with smaller agencies believing in their value of work as it relates to quality care issues while the VMS/MSP looks to serve the corporate purpose and stockholders, hence a conflict of values. 

According to an SIA survey the majority of agencies do not like working with or through VMS/MSP programs.  Frankly I have yet to speak to an agency that reports greater growth and profitability through working with VMS/MSP’s.  Every small agency that I have spoken with, and there have been many, tell me emphatically VMS and MSP programs suppress pay and bill rates, therefore adversely affecting revenues, margins, profits and the ability to attract and retain quality staff.  Communications between client and vendors are seriously restrictive, long established business relationships lost, delays in candidate submission and acceptance along with delays in processing and payment of invoices. 

Staffing Industry Analysts data indicate VMS/MSP market penetration has flattened over the last few years.  Could that be because clients have learned that metrics alone do not satisfy quality staffing initiatives and risk management issues?  Perhaps the client base just needed to learn the nuances of this process.Competitor driven MSP’s create issues like the problem of burdensome proprietary information demands, identity theft issues for supplemental staffers, wage and rate suppression, communication lapses, and much more.Small agencies must stand together to fight for fair and equitable terms, conditions and rates. 

So Bob, unless your task force is earnestly addressing these issues, I am afraid you are not, in fact, working on the right issues and initiatives.

 

Jack Wellman
Jack Wellman

First Half of Post:

I can understand the frustration of some in the staffing industry re: MSPs especially as they relate to selling and serving the larger client organizations.But the reality is that most large and some medium sized organizations have made the choice to engage MSP services to achieve whatever corporate objectives they established.What has made the MSP channel to the client even more difficult for the staffing industry has been the trend over the past 5+ years (perhaps accelerated during the “Great Recession” when staffing firms were more desperate for revenues) where the staffing firms have been squeezed - not only financially by the large block purchasers through margin pressure, but also contractually with major and excessive shifts of risks, responsibilities and financial liabilities to the staffing vendor from the client (and therefore from the MSP).

Read second half of post in next comment please.....

Jack Wellman
Jack Wellman

Second Half of Post:

Now with the labor market improving and the "balance of power" between clients, MSPs and staffing firms shifting, I applaud Bob Livonius and the ASA for developing tools that promise to assist and/or provide guidance to all parties in order to improve the situation. I look forward with great anticipation to the end product of ASA's initiative and hope it will engender more balanced and appropriate relationships in a MSP environment.

Realistically the chances of clients reversing their MSP decisions are "slim to none." Staffing firms can choose to support MSPs or not...and in the near term hopefully the staffing industry, MSPs and their clients will have ASA's "best practices" and will use them as a new benchmark... maybe making a bad situation better for all.

I can't wait!

staffnu123
staffnu123

@Jack Wellman Give me a break....chances clients will reverse MSP decisions "slim to none".  Staffing firms do not have to choose to support MSP's.  Staffing firms do have a choice and, because of this choice, there are predatory MSP's that are failing across the country.  Healthcare facilities are figuring out that money is not the only factor in choosing vendors.  If they are receiving substandard staff due to wage suppression, their client's quality of care goes down and their facility's image is tarnished.  I would not trust any "best practices" developed by the ASA because the ASA is managed by a board of directors representing the "large agencies" interests.  MSP is actually being reversed in increasing numbers.  I have seen Bob's company fail at the MSP and Joint Venture game on several occasions.  When MSP does fail, it definitely works to the benefit the smaller agencies because those facilities are less likely to sign with another MSP because of the "bad taste" the first on left in their mouth.  Also, there are plenty of politicians out there that are beginning to question the legality of information sharing that takes place in MSP/VMS and the issue of wage suppression.

Jack Wellman
Jack Wellman

First Half of Post:

I can understand the frustration of some in the staffing industry re: MSPs especially as they relate to selling and serving the larger client organizations.But the reality is that most large and some medium sized organizations have made the choice to engage MSP services to achieve whatever corporate objectives they established.What has made the MSP channel to the client even more difficult for the staffing industry has been the trend over the past 5+ years (perhaps accelerated during the “Great Recession” when staffing firms were more desperate for revenues) where the staffing firms have been squeezed - not only financially by the large block purchasers through margin pressure, but also contractually with major and excessive shifts of risks, responsibilities and financial liabilities to the staffing vendor from the client (and therefore from the MSP).

Read second half of post in next comment please.....

Jack Wellman
Jack Wellman

Second Half of Post:

Now with the labor market improving and the "balance of power" between clients, MSPs and staffing firms shifting, I applaud Bob Livonius and the ASA for developing tools that promise to assist and/or provide guidance to all parties in order to improve the situation.  I look forward with great anticipation to the end product of ASA's initiative and hope it will engender more balanced and appropriate relationships in a MSP environment.

Realistically the chances of clients reversing their MSP decisions are "slim to none."  Staffing firms can choose to support MSPs or not...and in the near term hopefully the staffing industry, MSPs and their clients will have ASA's "best practices" and will use them as a new benchmark... maybe making a bad situation better for all.

I can't wait!

Steve Swan
Steve Swan like.author.displayName 1 Like

I disagree with the position that MSP/VMS systems have "crippled the industry".  One of the tenants of capitalism and free market is innovation which breeds efficiency and MSP/VMSs provide a platform that consolidates a variety of touch points and disorder into an organized and mostly reliable process.  Perhaps not the best analogy I can offer (but still an analogy anyway) is my own home and the array of services necessary for standard or even not-so-standard maintenance; plumber, gardener, painter, pest control, electrician, etc.  Rather than deal with dozens of contractors I would much prefer to deal with one control point with whom I have already negotiated rates and in whom I have a fair amount of confidence.  This saves me time so that I can dedicate more time to being a father, husband, provider, and to do the things I do well (which I assure you is not plumbing).

Health care is not about us (staffing firms), but instead, to provide quality care for the patients the hospitals serve.  If a hospital can minimize their operational efforts and standardize their staffing processes (inclusively), they owe it to their members to do just that.  The result is less time managing a barrage of profiles and submissions, or differing invoices, and more time improving the care they provide to patients.  

AMN Healthcare is a reputable organization and I know them to place priority on quality care, and certainly if they didn't, they would experience a short ramp to a sheer cliff.  The market for quality clinicians determines the rates for the facilities they serve and if ever they or their suppliers struggle with finding these quality clinicians, MSP/VMSs often reach out to their partners to be included in the solution.  I have experienced their responsiveness in working with us and the facilities to identify the barriers whether that be rate or conditions at the facility.  

Have rates changed?  Yes - they have.  Some for the better, and some have been reduced.  But I am certain that is not wholly attributable to MSP/VMSs as we have only recently started to crawl out of the second worst fiscal climate our nation has seen. Nurses who were retired returned to the market place, and millions of Americans lost their insurance.  The need for our services or even MSP/VMSs for that matter diminished considerably.  Our formerly inelastic demand for nurses became elastic seemingly overnight.  With the equilibrium of supply and demand shifting, the price for the supply changed also.

The free market breeds innovation to improve otherwise inefficient existing machines and processes.  I am not sure one can argue that most hospitals enjoyed a fully efficient staffing process pre-MSP/VMSs.  Imagine your local hospital needing one MS nurse today and the battery of staffing firms responding to just that one need.  Heck, consider even the volume of phone calls into staffing offices requesting meetings and opportunities, "Can we have a contract?", etc.  That is gone, and I would argue that no staffing office misses that constant disruption.  When you also consider the invoicing process... geez... if it is anything like the expanse of bills we receive, I would welcome such a service in our organization.  Of course, there are other considerations that make an MSP/VMS even more attractive including reduction of human resource 'risk' and cost.

Personally, we have found the MSP/VMSs we work with to accelerate our business by opening markets that would take months, if not years to penetrate.  They have also been valued mentors in these newer markets.  And, we collect from one payer among several markets rather than hundreds of facilities.

I admit that I was once resistant to the MSP/VMS model and feared that our business would suffer, but I am happy to report that I was wrong.  We have what I consider to be very valuable relationships, or better characterized as partnerships.

staffnu123
staffnu123

@Steve Swan I believe AMN has found that "cliff" you are referring to on several instances.  No matter how complicated some people make the MSP/VMS scheme look, it is really very simple.  MPS/VMS have drastically reduced bill rates to subcontracting agencies which translates to suppressed wages to contingent staff which translates to substandard contingent staff placed with VMS/MSP;  There is absolutely no benefit to the subcontracting agencies.  I have listened to the "increased volume" argument and it just simply does not hold water.  Where does the increased volume come from?  If all of the same agencies are subcontracted, which seems to always be the case, there is no increased volume.  VMS/MSP only leads to decreased revenue for the subcontracting agencies no matter how you want to try and sell it to us.  I know all of these facts first hand because I have experienced all of these issues directly with VMS/MSP providers.

Staffing Vendor1
Staffing Vendor1

As a small (previously Medium before MSPs) size staffing vendor who is required to be a vendor under the AMN MSP model (among others) I must stand firmly with Colleen Mills recent blog.  I have many years in this industry and the deluge of MSP/VMS systems has crippled the industry and has eaten away our profits and sales.  I network with many staffing firms and I know of NONE that would agree with this post by Mr. Livonius, and further none who have experienced any increases in sales or profits based on being part of an MSP.  

In addition to crippling us financially, it has created a barrior to our prior excellent relationships that we worked hard to develop over the years and has allowed in less-than-exemplary staffing firms simply because they are one on the "list" of the MSP awarded the program.  The most damaging MSP’s are the Non-vendor neutral programs, such as AMN’s. These create rate suppression and unnecessary administrative burdens on the staffing vendors that often result in the vendors losing their staff/temps to the MSPs.  And it lengthens the time it takes to get temps approved and working. 

I applaud Mrs. Mills on her blog and I, and many others in this industry stand firm in our stance that  “VMS/MSP companies pose many challenges for this industry, not the least of which include rate suppression, wage suppression, margin deterioration and a host of other ills.” (Quote from Colleen Mills Blog.)

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  1. [...] The debate over Managed Service Providers in travel nursing and healthcare staffing heated up in June of 2013 when opposing sides exchanged barbs on The Staffing Stream. Colleen Mills, a Senior VP for National Healthcare Staffing Alliance wrote a piece urging small and mid-sized travel nursing companies and healthcare staffing companies to “Take a stand on VMS/MSP”. Days later, Bob Livonius, President of Workforce Solutions at AMN Healthcare, took exception and urged travel nursing companies and healthcare staffing companies to “Work Together to Embrace Best Practices with MSPs.” [...]

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