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.
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.