Get With the Program: Embracing Advanced Procurement in the Enterprise Healthcare Market

As healthcare entities continue to merge across the United States, technology that improves healthcare delivery will be an integral part of these organizations and healthcare staffing firms will need to evaluate their approach in the market. As the program I managed matured, compliance with the governance model was being required throughout the country. Recently acquired hospitals or niche labor categories were now being required by hospital leadership to operate within the program.

Even as hospitals were requiring adoption, regional per diem agencies and niche labor category providers I spoke with across the country were resistant to work within the program — a position I found astonishing. Less than 25% of all staffing firms indicate they do not have revenue through VMS programs. If your recruiting business isn’t continually embracing market change, it’s missing out on opportunities to sustain market share and isn’t positioning itself for future success. I understand why staffing firms would prefer not to go through MSP/VMS programs, but they may want to embrace change because change is coming.

Puzzling rejection. Several of these situations arose in smaller metro areas — those ranked below the top 100 in population. Perhaps the agencies in those areas hadn’t been exposed to centralized governed corporate programs or perhaps within their bubble, they believed their talent was exclusive. Hospitals frequently valued existing relationships and wanted to provide the agencies the first opportunity to continue the partnership and work within the program.

One situation involved several regional per diem agencies that were reluctant to work through the program. In order to maintain the relationships, the hospital considered providing these staffing providers with favorable tiering. The only requirement from the agency would be to adjust operationally, which could have been accomplished easily with training and internal change management. But those agencies opted not to continue the partnership.

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After a bit of research, I learned the other two major hospital systems in the region also work with MSP/VMS providers. Those staffing agencies may maintain a run rate with long-term care and home health providers, but the market around them was changing. The talent they retain is only as valuable as their opportunity to find placements for them. More importantly, if a staffing firm is not providing a service that is needed, it is inviting competition into its market. Instead of embracing the major hospital systems around them, the agencies in my scenario have essentially invited competition into their geography.

Embrace change. Niche providers have the opportunity to embrace the changing marketplace and position their firm for long-term success within large enterprise programs. Agencies with focused recruiting in specific domains offer a tremendous value to contingent labor programs by having deep domain knowledge and a candidate pipeline. Often, these agencies have enough opportunities and wish to sustain higher markups that they fear may not be possible through MSP/VMS programs.

On the flip side, these agencies should consider how they are positioning themselves with this business decision. Orders that are not efficiently filled within MSP/VMS programs are provided as opportunities for other vendors. The visibility of enterprise programs enables large organizations to track which positions are not being successfully filled, VMS/MSP supplier management will seek out coaching organizations to fill these orders. There are always agencies seeking an opportunity to expand service offerings. A niche provider may be happy with its current business volume, but refusing to participate in MSP/VMS programs opens up opportunities for competitors in its space. If there is a sustaining need within enterprise programs, a solution will be found. Enterprise brands can attract agencies that want to support them and qualified staff that wants to work within them. Niche providers have a unique opportunity to be successful within programs in their labor category and then leverage that success into new enterprise businesses.  I’d recommend niche providers evaluate the changing market, consider their future positioning, and take time to understand the MSP/VMS markets. Consider the opportunities the right strategic partnerships can open up.

Staffing providers need to consider why and how the VMS improves programs for buyer organizations. Talent acquisition technology will only improve and continue to become embedded within enterprise organizations.

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Christopher Mills

Christopher Mills
Christopher Mills is an enterprise workforce consultant for ShiftWise. He can be reached at Christopher.Mills (at) shiftwise (dot) com.

Christopher Mills

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