Healthcare Staffing Competition is Good, Control by Competitor MSP is Bad

200328889-001In recent posts to the discussion about VMS and MSP in the healthcare arena, several perspectives have been expressed. In case you are wondering, I am firmly in the camp that there are too many obstacles to a level playing field when small business agencies must deal with predatory MSP and opportunistic VMS. So let’s examine in more detail the differences between the two, particular to healthcare staffing.

A vendor management system (VMS) is simply a software solution to managing several aspects of supplemental staffing needs. The software assists primarily in such areas as scheduling, needs list/job orders, fill rates, due diligence/tracking on credentials, and contracting, etc. Metrics reporting for analysis is easily accomplished and numbers help clients determine future needs/wants.

There are generally two ways to proceed with VMS — by the client purchasing a software program, customizing it to their needs and managing the contracting in house or, to obtain the services of a company such as Shiftwise and allowing that third party to manage the software and contracting aspects of vendor management. Obviously the first method mentioned would be preferential because it provides a direct relationship between client and agency and better communication to problem solving. The third party approach means obstacles like communication issues, increased risk exposure, invoicing and payment problems, and a burdensome fee structure on the agencies already suffering from rate suppression and leaving almost pitiful margins to operate. The clients are often unaware of “incidental fees”, the risk the agencies take in sharing proprietary information to the VMS, the potential identity theft issues posed, wage suppression concerns for the agency staff to name just a few problems. The good news here is that generally vendor neutrality exists with VMS.

PREMIUM CONTENT: The Healthcare Staffing Industry: Coming to Grips with Reality

Management service providers (MSP) — now there is a destructive entity for sure. Operated by a COMPETITOR and managing all supplemental staffing processes for the client. Problems are many, such as determining who gets what in terms of the assignments (meaning they get first crack at filling a need and the sub-contractors gets the leftovers after the MSP has feasted). Then, outright “poaching” of staff with promises of more work, wage suppression due to diminished bill rates for subcontractors, document demands that are onerous and break federal statute in regards to privacy issues, restrictive terms and conditions in contracts, indemnity clauses leaving the sub-contractor out on a limb, and I could go on. I don’t know of any other industry that allows a larger competitor to control an independent business owner. Heck even big oil doesn’t get that privilege from the small wildcatters in the oil and gas industry. Why? Because they don’t stand for it!

In a nut shell, VMS as a pure software solution can actually have a positive impact on streamlining and organizing the partnership between client and agency, third-party VMS is an obstacle to client and agency relationships. The clear and present danger however, the predatory MSP poses a distinct threat to the healthy survival of the small to medium healthcare staffing agency.

MORE: Consulting, MSP and Independence


Colleen Mills

Colleen Mills
Colleen Mills is senior VP, standards and government relations, for National Healthcare Staffing Alliance. She can be reached at colleenm (at) nhs-alliance (dot) org.

Colleen Mills

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2 Responses to “Healthcare Staffing Competition is Good, Control by Competitor MSP is Bad”

  1. brandwarrior says:

    Thanks for sharing your thoughts, Colleen… 
    Having worked on both sides of the staffing supplier / MSP fence, I can say that the environment you cover here is far more complex than a few paragraphs is capable of sufficiently addressing.  There are also a number of MSPs doing things right while many others still operate in the contingent workforce management “dark ages”.  MSP programs have to be carefully thought out and implemented with knowledgeable oversight from key stakeholders and SMEs in the client organization to ensure that the talent ecosystem is treated in a fair and sustainable way.  
    From my experience on the staffing side, i know that the traditional form of “vendor neutrality” which includes a zero communication policy between hiring managers and suppliers/recruiters is and has been a central point of contention.  It’s a good example of a counter-productive and unnecessary measure that proper program structure and reporting can achieve while allowing the flow of critical “soft” requirements and rapport building to still occur. I was pleased when, a few years back, a Fortune 100 financial institution actually reversed the policy and began measuring vendors in their programs on “engagement” with hiring managers with the goal of improving efficiency and talent alignment.
    In many ways, it’s the end user/client who requires education and who should ultimately drive “next practices” in contingent workforce management into the MSP marketplace which are conducive to fair and sustainable relationship between all parties.

    • colleenmills says:

      brandwarrior Thank you brandwarrior for your insight….. you are absolutely right that there are some MSP’s trying to do this right –  primarily outside of healthcare.  My experience in healthcare staffing has been nothing but negative and I really don’t see any effort on the part of the MSP’s to change their attitude or business model.
      In healthcare staffing the risk exposure is critical and putting up roadblocks to free flowing communication between agency and client managers puts patient, nurses, agency and facility at greater risk.
      I also agree wholeheartedly that if we are going to see any improvement, those initiatives must be driven by the provider clients.  I still believe that MSP’s in healthcare are predatory in nature and destructive for the healthcare staffing industry, especially the independent agency’s.
      I would like to explore your thoughts on fair and sustainable ways to support the talent ecosystem.  Perhaps you could e-mail me or call NHSA sometime when you have a few minutes.

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