The Customer Is Always Right

collaborate (2)Last week, Colleen Mills and Bob Livonius both submitted posts to the Staffing Stream about MSPs in healthcare staffing.  Mills is the founder of an association that built its membership as an advocate for a few small healthcare staffing companies seeking to stem the tsunami of MSP and VMS in healthcare. This tsunami is driven by healthcare organizations (customers) that want a better solution than what was traditionally offered by our industry.

If Mills’ message was that we need to improve the managed services model to make it more attractive for staffing companies, I’d say that’s a very good idea. But that’s not what I read.  The post called for staffing companies to “take a stand” against the model that thousands of customers have chosen as their preferred business model. It seemed to me she was saying that staffing companies should join her organization and “take a stand” to tell customers how staffing companies will and will not do business with them.

Livonius responded to that, calling on healthcare staffing firms to become part of the process to make client service better, rather than rail against the MSP model.

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Here’s my take.

Every successful business model depends on providing value to its customers. It is, always has been, and will continue to be about what the customer wants and very little about how we want to do business as staffing companies.  In my opinion, unless we are retooling our businesses to be an MSP or VMS provider, and/or to be a more efficient and sought after subcontractor to an MSP or VMS provider, I’m afraid many of us could be out of the business in the next few years.

MSP and VMS models are the norm and not the exception. This is even becoming true in healthcare, as customers seek to keep pace with their own tsunami of reforms and changes.  Some people say that healthcare staffing is different from commercial staffing. True in many ways, but not in the reasons why healthcare clients are embracing MSP.

Imagine being responsible for running a big hospital with up to 50 staffing companies submitting physician, nursing and allied professional candidates with varying degrees of quality and compliance – including some with very low quality. At the same time, you have 50 salespeople from these same companies calling your nursing and allied managers trying to get their candidates interviewed first. Meanwhile, you are constantly juggling contingent staff from multiple companies with your open shifts, so you routinely order more nurses than you need, which means you are constantly calling back companies to cancel. And then, you have to manage all the invoicing issues, varying rate structures and different orientation expectations. Little wonder healthcare clients are embracing a model that manages this chaos and creates more efficiency.

I have had the privilege of selling MSP programs in healthcare for more than a decade. Currently, we have more than 600 companies in our programs and many of them call us to ask where the next MSP is being sold so they can sign up.  These companies have figured out how to make more money as affiliate vendors by eliminating sales commissions, reducing DSO and filling incremental business for clients they would otherwise not have serviced. They are becoming incredibly talented “recruitment machines” that know how to get the best-qualified candidates faster than others.

I am pleased to be participating in the process with the American Staffing Association to develop best practices that address many of the concerns expressed by Mills.  This is a collaborative effort between smaller local and regional staffing companies like the ones that Mills wants to join her organization and some of the largest providers of MSP and VMS in the staffing industry.  We are excited to send ASA members a finished product that represent the combined recommendations and best practices based on the collaborative work of these members.

My advice to the smaller staffing companies being encouraged to join organizations to fight against VMS/MSP and the customers who choose these models is to carefully evaluate where you spend your association fees.

 MORE: Incentivize Your MSP

Sherry Weier
Sherry Weier is corporate vice president, strategic accounts, and executive consultant at AMN Healthcare. She currently leads the AMN Workforce Consulting team in the development and implementation of clinical workforce strategies and staffing solutions designed to improve hospital staffing outcomes.

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4 comments
Southern Jones
Southern Jones

So Ms. Weier, if I understand your position that the customer is always right , if I were selling apples and a customer demanded that I give him my apples for whatever price he offered and at whatever terms he offered , I would be obligated to do so because of course “the customer is always right” .…what a ridiculous,  antiquated and over simplified position to take, not to mention an unwise business model to follow. Surely you are familiar with the modern concept of win-win relationships.  But I guess the two parties in your win-win game are the Hospitals and AMN …..and too bad for the nurses who do all the work or the sub agencies who try to work with you.. or for the long term viability and sustainability of our industry. In the staffing business we agencies have a belief that we have two customers, the hospitals and our nurses. They are both critical to our success. One of the problems with your business model and practices is that you have left the nurses out of your equation by sacrificing them at the altar of getting the contract with the client. You don’t care what your low bill rates, designed to get the account at any costs do to the nurses pay rates. Intelligent agencies start the pricing process with what is a fair and equitable pay rate that will allow them to attract and retain quality nurses while considering what is a fair market rate and then they build in a fair margin and THEN they propose a bill rate. Your process starts with offering a client an artificially low rate that will get his attention by offering huge savings and then pushing everything down to the nurses and agencies. I have also heard your company speak of valuing the agencies that participate in your programs, but sadly I see no evidence that you do value them or treat them fairly for that matter. You boast of having 600 companies participating in your programs, but how many are signed up with you but do not participate or participate only as a last resort? I know that is what our company does and what many companies do. Filling needs for your programs are a last priority and only if the nurse really wants to work at that facility. How easy it must be to sell your program to a hospital by offering them savings by showing them significantly below market bill rates thereby throwing your supplying agencies and the nurses under the bus. Selling below market bill rates is easy, selling value and quality is much more difficult.  Don’t you see that your programs are doing irreparable damage to our industry by artificially and arbitrarily suppressing bill rates, and thereby ultimately suppressing pay rates. You are hurting the very people who do all the work……THE NURSES?…….remember them?

You also speak of your clients, what about the many clients I know that have tried your program only to be disappointed with it. I know of a number of facilities that have terminated their agreement with you after trying your program and I know of more who are looking for ways to terminate your program. I have been shown firsthand how you manipulate reports and performance indicators such as order distribution and fill factors, the smart clients see through the smoke and mirrors as do the agencies who try to work with you.          

 I do not speak for Ms. Mills, don’t know her, never heard of her organization but she does seem to speak for many of the agencies I have spoken to about MSP and VMS programs. As an aside I once worked for a large staffing company and the strategy was always to use our strength, size and resources to maximize market share and eliminate competition from the small companies. If you were to be honest I am confident you would acknowledge that the health and well being or even the survival of your competitors is very low on your list of priorities. Why small staffing companies would want to actively participate in your program so as to make you and your program successful, at their ultimate peril and demise, is a real mystery to me.   

BTW I do agree with you that hospitals want and need standardized agreements with uniform terms and conditions and that they have an obligation to negotiate fair market rates. All these things can be facilitated without introducing a 3rd party.  I also know they need automated staffing tools and quality staffing software with front and back office features these tools are readily available from a number of software companies, features like broadcasting needs to approved vendors via the software thereby eliminating the need for frequent phone calls to from agencies. You and your programs add costs and layers to the staffing process that are not only unproductive and inefficient but also counterproductive, time consuming and cumbersome to work with.    

I am also curious about this task force your boss talks about in his posting, I would bet a lot of money that it is stacked with companies so as to achieve the outcome you want. And of course knowing that the large MSP and VMS providers are involved should give everyone great comfort that all sides will be considered. This task force is a sham!    

In closing, you may be able to sell your pitch in the board room and to wall street but it just does not stand up in the real world or on main street. 

BTW – we know why ASA supports you bug guys and your programs. After all you pay a lot of dues, advertise and sponsor a lot of their functions and events and sit on their board. So when you and your boss point to them for support it rings rather hollow out here in the real world. Yes, we are on to that as well!  

staffnu123
staffnu123

My company has also had experience with this particular MSP and your assessment is spot on.  Our experiences were exactly the same as yours.  Given your experiences with predatory VMS/MSP, you should reach out to Colleen Mills.  My company is a member of the National Healthcare Staffing Alliance and I believe they are making some great strides with regard to addressing and publicizing the negative aspects of VMS/MSP.  The NHSA addresses the issues as they relate to the small to medium size agencies.  The only way to address these issues is on a large scale that can only be achieved through the banding together of the small to medium agencies.  Strength in numbers.

staffnu123
staffnu123 like.author.displayName 1 Like

Well put Colleen.  As with all of the predatory MSP/VMS's out there, Ms. Weier's company, as evidenced by her comments and the comments of Mr. Livonius, is trying to defend against negative information about their company's practices from getting out.  Keep doing what you are doing Colleen.  This is all just "splash back".  With respect to Ms. Weier's comment about providing value to it's customers, this is definitely true but,  this cannot be achieved in the form of bill rate and wage suppression.  Bill rate and wage suppression can only lead to lower quality services provided to customers.  Bill rates and wage rates need to be figured based on standards in an industry, not by how much a VMS/MSP can slash them down to in order to make their sale to the client.

colleenmills
colleenmills

Where to begin to respond to Ms. Weier and her gallant attempt to support Bob Livonius's perspective on VMS/MSP.  Let's start at the beginning. Yes my organization's mission is to advocate for the independent healthcare staffing companies and yes one of our initiatives is to pull back the curtain and shed light on the predatory nature of competitor MSP's.  She is wrong to try to diminish the strength of the NHSA.  We are not a "few", we are many.  Our Member Directory is not published in total because many members fear the retaliatory nature of some VMS/MSP's.

The "better solution" she refers to are CFO's seeking less expense (translation: lower rates) and the ability of the large nationals to get into those executive suites.  Then there are the organizations that leave it to the purchasing department to determine how supplemental clinical staff are contracted. THe owner of a smaller independent agency rarely is afforded the opportunity to meet with these people.  We know too there are plenty of times that the decision to proceed with VMS/MSP is made without input from Nursing/Clinical staff, never mind inviting current vendors to the discussion.

Ms. Weier then decided to translate what she thinks I really meant with "It seemed to me she was saying that staffing companies should join her organization and "take a stand" to tell customers how staffing companies will and will not do business with them."  Unlike Bob Livonius who made a blatant membership solicitation  when he wrote "I strongly urge all staffing firms - healthcare or otherwise - that are not already members of ASA to join the association", I never suggested they join NHSA.  But instead I callred for actions such as educating staff  and clients/customers, stop accepting unreasonable terms and conditions in VMS/MSP contracts, TALK to each other about their common interests/problems in the marketplace, and yes to join organizations that advance their goals and objectives in business.  NEVER did I presume to use the blog to solicit members as Mr. Livonius blatantly did and neither did I suggest to an agency to tell a customer how they should do business with them.

Ms. Weier's take as I understand it includes only 2 options:

         1.  Become an MSP or VMS Provider            

          2.  An Independent should resign  itself  to sub-contractor status and wait for the leftovers to build a business on.

Ms. Weier, when you state "MSP and VMS models are the norm and not the exception", even becoming true in healthcare, where do you get those statistics?  AS I have pointed out before, even SIA research indicates a flattening of VMS/MSP penetration into the marketplace.  And who better than the local independent agency to truly understand the overwhelming and burdensome challenges that reform and change has on their healthcare clients?

FYI, I don't have to imagine the big hospital scene, I grew up in it as a Nurse and Administrator.  Everything  you describe some of us did manage quite nicely, yes even the chaos.  Today most of the client base does exactly that - manage staffing by themselves.  They get better at it and find new efficiencies all the time.  They have better control over risk exposure and partnership with their vendors.  Could it be better?  Always.  Could they use some help with master contracts, customizable software and other resources?  Absolutely.  Is MSP the only solution?  I don;t think so!

I have no ill will towards those companies that have found a way to make money through MSP, I have just not encountered them yet!  And I talk to more clinical administrators that have learned through their experiences that "best-qualified candidates" don't always make it to their facility.

In her closing, Ms. Weier again tries to attribute a marketing message that I just didn't solicit.  But I do admit that we exist to serve the interests of the Independent healthcare staffing agency so obviously, I will proudly use whatever means I can to advocate for those interests, including the written word. 

In closing, adjectives like arrogant, bullying, self-righteous have been used to describe some MSP's,  I have to admit, when I read "my advice to the smaller staffing companies being encouraged to join organizations to fight against VMS/MSP and the customers who choose these models is to carefully evaluate where you spend your association fees", certainly seemed a bit arrogant to me.                                                                                                                                     

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