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Tim Teague

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The Incestuous Nature of Healthcare Staffing VMS/MSP

Posted by Tim Teague on Thu, Jan 12, 2017 @ 08:40 AM

handshake pic.jpgManaged Service Providers (MSP) utilizing Vendor Management Systems (VMS) or Workforce Management Systems have been a part of U.S. commerce for decades, starting with Ford Motor Company and moving across all market verticals.

These systems can provide operational and financial efficiencies unavailable to firms not deploying their utilization. The need for a MSP can grow when demand for services exceeds supply. The U.S. nursing shortage is case in point. The ability to aggregate as many possible vendors for human capital is a great advantage of this system. The “fill rate”, or ability to reduce hospital vacancies assists the hospital in   revenue generation, adequate staffing ratios, and relief from some of the “fixed-costs” associated with full-time employees. When supply is scarce and demand is high, aggregating as many vendors as possible with uniform terms and conditions is the most effective model.

Without such systems in place, the time required to manage, pay, and orchestrate labor demands while working independently with a large vendor pool is expensive and inefficient. This is where operational efficiencies of MSPs are most valuable. Leveraging multiple vendors on one side of the MSP, but communicating singularly on the other side for hospital management. The larger number of vendors funneled through the MSP mathematically increases the odds of meeting the high demand of healthcare workers.  

Financial leverage can be realized as contract talks can be standardized across all vendors. Standardizing rates simplifies financial planning for the client. Spreading demand across multiple vendors provides pricing leverage that can’t be realized working with one supplier at a time.

The healthcare industry has been a late adopter of human capital managed services, but has long used GPOs (Group Purchasing Organizations) for supplies such as durable medical equipment. 

One of the first start-ups to engage the contract labor spend of hospitals in the US was Shiftwise. Shiftwise was created in 2003 in Portland, Oregon and was originally known as Origin, Inc.

A later player to the game was Hospital Corporation of America, a for-profit system. HCA has long known the value of managed services and has utilized HealthTrust purchasing group since 1999. In 2011, HCA launched Parallon, another subsidiary designed to offer workforce management solutions throughout its expansive network of hospitals. In 2016, Parallon rebranded its workforce management solution to better identify with HCA’s original GPO subsidiary, and is now known as HealthTrust Workforce Solutions.

FocusOne Solutions is another provider in the VMS/MSP space serving hospitals for several years. FocusOne Solutions is a sister-company to Aureus Medical Group, one of the nation’s largest healthcare staffing firms with more than 30 years of experience.

Medefis, yet another provider of hospital vendor management solutions, also founded in 2003, owns significant market share.

Although there are several other vendors for vendor management and workforce solutions, the companies listed above comprise over half the agreements in the healthcare staffing world.

What is the “incestuous nature” of these companies? To explain, it is important to understand in simple terms the relationship a VMS/MSP provider has with the hospital.
  1. The VMS/MSP is the sole gatekeeper for any agency that wishes to do business with the hospital.
  2. The hospital is typically forbidden to work with individual vendors; as such vendors must only work through the VMS/MSP provider.
  3. Every staffing firm is 100% dependent on the VMS/MSP to provide their services.
  4. The VMS/MSP is repository for all staffing orders, and is the first to receive all orders for labor across the system.
The recent spate of acquisitions of VMS/MSP vendors by staffing firms presents an interesting question. Why would a healthcare staffing firm have a desire to get into the VMS software business? A review of the aforesaid four items holds the key and prompts further questioning. Who owns whom? What does vendor neutrality mean?

Let’s take a closer look at the companies we’ve previously mentioned.

HealthTrust Workforce Solutions – If you are a staffing agency wanting to provide services to a HCA hospital, get ready to go through HealthTrust.  HCA brilliantly put this together in-house as a cost reduction and operations reduction play.

Shiftwise – As one of the early software solutions in the Healthcare space, Shiftwise accumulated hundreds of contracts with hospitals across the country. In a brilliant move, AMN purchased them in late 2013.

MedefisThis company was founded in 2003 and had acquired many contracts, specifically in the healthcare staffing space. As such, Medefis became a strategic target of AMN and was purchased in 2015.

FocusOne Solutions – This Omaha Nebraska firm is also a VMS/MSP driving contracts in the healthcare staffing space. They are a sister company to Aureus Medical Group, one of the nation’s largest healthcare staffing firms.

Now, back to “vendor neutrality.” When the VMS/MSP providers have no affiliation with staffing firms, their sole responsibility is to provide seamless transactions between the hospital client and all subcontracted vendors. Now that the largest staffing firms have acquired these popular systems they in essence “own” every order that is generated by the hospital client. There is speculation, but no proof that these staffing firms are taking advantage of having total access to every order before any other company “sees” these opportunities. True transparency would be the simultaneous release of all orders to all vendors including the staffing firm that owns the VMS/MSP. 

It is an interesting exercise to review how revenues have grown or diminished since the largest healthcare staffing firm in the United States, AMN, has made their acquisitions.

According to Harris Williams & Co., a research and M & A firm, the healthcare staffing industry was expected to finish 2016 with approximately 7% in growth year over year. This follows several prior years of single digit growth.

Considering single digit growth in the industry AMN healthcare has provided the following staffing revenue increases, both prior to, and then after VMS/MSP purchases.

  • 2011 to 2012   7.5%
  • 2012 to 2013  6.1%
  • 2013 to 2014  2.4%
  • 2014 to 2015  41%
  • 2016 QTR 3 To date 33%

If the entire market is growing at around 7%, and AMN is growing at 30% to 40%, it might be inferred that the pie is getting smaller for all other staffing agencies in this space. An argument can be made that this growth can be attributed to acquisitions, or sheer management superiority. The reader will have to be the judge.

The good news is that staffing firms that have been “blocked” from direct access to these clients can now present their own VMS/MSP solutions to compete head to head with the largest in the industry. A sea change is coming in this industry, and it will be driven by technology.

BlueSky Medical Staffing Software Unleashes Industry-Leading Pay Package Tools in Version 5.3

Posted by Tim Teague on Wed, Aug 03, 2016 @ 10:40 PM

Nashville, TN - Aug. 3, 2016 - Industry leading software unveils its highly anticipated version featuring its groundbreaking margin calculator and advanced pay-package along with even more features

Bringing 10 years of industry experience to their latest update, Bluundefined-586896-edited.jpgeSky Medical Staffing Software releases its most advanced tools for recruiters and finance managers in the healthcare staffing industry.

As an ongoing business practice, BlueSky monitors feedback from clients and continually adds and enhances features needed in the healthcare staffing market. For the latest version, Tim Teague, BlueSky CEO and President, commented.

“In today’s healthcare staffing industry, speed to market has become a differentiator for our clients. Recruiters must be able to construct a complete pay package while on the phone with a candidate. This new system provides a quick analysis of every combination of pay rates, non-taxable payments, along with actual candidate take-home pay. The significance of this product is the underlying burden tables that automatically calculate state-by-state workers compensation, unemployment insurance, and other more granular expenses associated with any assignment. This frees the recruiter to submit candidates without the worry of margins that haven’t been carefully scrutinized automatically. The system can fix the margin and allow the recruiter to toggle back and forth with the pay rate and travel stipends, or let the margin “float” while different packages are presented. This new technology assures the recruiter of extremely accurate margins, and protects the organization from inconsistent profit from state to state.”

 BlueSky is aware that more than ever before, healthcare workers and clinicians have more choices that ever. The ability to provide accurate and fast offers to these candidates is a game changer in this very competitive environment.

Version 5.3, which includes the newest margin calculator and pay package, will be released August 11, 2016. Significant testing of the new version has been underway for last several months. New clients may take advantage of reduced fees through the first two months after the product launch. (August-September).

To take advantage of this reduced offer window, and to experience this innovative new version, please contact Polina Sologub at 615-349-1985 ext. 714.

Tags: margins in healthcare staffing, Gross Margin

Will Affordable Care Act Ultimately Result in Greater Contract Labor?

Posted by Tim Teague on Tue, Jun 21, 2016 @ 02:32 PM

Two of the driving tenets of the Affordable Care Act are the push for better patient outcomes and reduction of costs. Since labor spend accounts for the largest percentage of acute care expense, it is a prime target for cost cutting.


This presents a conundrum for the hospital. How to cut labor costs while improving the quality of care (decreased re-admission rates).  A corollary to this dilemma has been the “just-in-time” staffing models the industry has used for years.  The difference is while a manufacturer can judge work in process by the amount of incoming orders, the healthcare industry has not been able to predict the number of orders (average length of stay) in a reliable manner.


Peter Drucker, foremost business analyst declared just before his death in 2005 that “increasing the productivity of knowledge workers was the most important contribution management needs to make in the 21st century.” The question here is how can data be used to transform the healthcare industry to both decrease costs and improve quality?


The answer is equal parts simple and complex. There is enough historical data from millions of hospital admissions across the country to fine-tune a census model that provides extremely accurate daily figures for a unit-by-unit count. Several firms have been working on the analysis of these figures for years. In the same way the electronic medical records have grudgingly made their way into our healthcare system, strategic census models will soon be the norm.


When this data becomes granular for hospital systems, the current models for large scale census predictors will become extinct.  This new model for just-in-time staffing will finally provide a day-to-day, week-to-week picture of labor needs. Fine tuning the levels of FTE’s will become better, and non-fixed-cost labor will boom.

Tags: Affordable Care Act, Staffing Agency, Affordable Healthcare Act, Contract Labor, staffing

Donald Trump and Affordable Care

Posted by Tim Teague on Fri, Jun 03, 2016 @ 03:37 PM

Donald Trump and Affordable Care Act


As Donald Trump moves closer to becoming the Republican’s presidential candidate in the general election, there are new ramblings of what he would do to Obamacare if elected. Many arguments have been made against the continuance of this growing governmental entity, but odds are the ACA has already “left the station”, never to be diminished or ended. The last battles are likely to be held in state legislatures where expansion of Medicaid and State sponsored exchanges are still in flux. A particularly interesting outcome will be the Commonwealth of Kentucky where a recently elected Republican governor has vowed to dismantle and discontinue a well-entrenched statewide exchange that had been operating for years.


If history is to be repeated, the Affordable Care Act is here to stay, and massive changes to its structure are very doubtful. Let’s take a quick look at what was said in the 60’s when Medicare, a similarly tagged national health plan was proposed.


Ronald Reagan: “[I]f you don’t [stop Medicare] and I don’t do it, one of these days you and I are going to spend our sunset years telling our children and our children’s children what it once was like in America when men were free.” [1961]

George H.W. Bush: Described Medicare in 1964 as “socialized medicine.” [1964]

Barry Goldwater: “Having given our pensioners their medical care in kind, why not food baskets, why not public housing accommodations, why not vacation resorts, why not a ration of cigarettes for those who smoke and of beer for those who drink.” [1964]

Bob Dole: In 1996, while running for the Presidency, Dole openly bragged that he was one of 12 House members who voted against creating Medicare in 1965. “I was there, fighting the fight, voting against Medicare . . . because we knew it wouldn’t work in 1965.” [1965]


If these arguments sound familiar, so will the likely outcome of the more recent protests against the ACA. In a period when both major parties are struggling to figure out who their constituencies really are, odds are the Affordable Care Act will just keep lumbering along.


Good news for those seeing increased healthcare dollars expanding their business, but not necessarily for those desiring less government intervention.

What are you writing about today?

Tags: Affordable Care Act, Healthcare, health

Physicians becoming Hospital Employees - Does it affect the Locum Tenens Demand?

Posted by Tim Teague on Wed, Mar 02, 2016 @ 11:22 AM

Between 2010 and 2015, a milestone in the practice of physicians was reached. The number of physicians working as employees of a healthcare organization or a group practice surpassed the 50% mark. This direction of employment versus independent Screen_Shot_2016-02-12_at_12.51.30_PM.pngpractices has been a growing trend. Hospital systems have been aggressively recruiting physicians for several years. Their financial model relies heavily on the negotiation of rates with insurers, and having employed physicians in-house enhances that bargaining power. What should continue to push this trend are the “pay for performance” economies within the Affordable Care Act. Another factor is a new generation of physicians that are more interested in work-life balance than investing time, money, and energy in building their own practice.

At first glance, it would seem this trend would decrease the demand for Locum Tenens. Upon further investigation, the opposite will probably be the case. One needs to look no further than the burgeoning contract nurse industry to see an important trend. Demand for contract nurses has historically been a year-round need, with summer vacation times for the in-house nurses creating some of the greatest demand.

As physicians continue to enter the market as hospital employees, many of the trends that have followed the historic nursing demand will be seen in physician demand. Mandatory vacations and the typical summer swings should increase with physician employment trends. Although the Staffing Industry Analysts predict a 6% increase for the locum tenens market, it should see increasing demand as more physicians move to the employment model.

Tags: Locum Tenens

Cyber Security Part 2:  Data Breach and Cloud Computing Dangers

Posted by Tim Teague on Mon, Feb 22, 2016 @ 08:37 AM

As previously discussed, the move to Cloud computing is simply the change from working with applications that are loaded on your local computer to working with applications that are generated online via the Internet.

Cloud Computing, or web-based applications are not a “Clouds” per se, but are Laptop Work-10.jpgapplications that are housed in a computer that is accessed remotely via the Internet. Data centers around the world house computers that are designed to allow users from around the world to connect to these computers that run various applications while the results are displayed on your local computer.

Consider a large-scale online service such as eBay. Millions of users may simultaneously be looking at items, bidding on items, or paying for items. This activity is NOT happening on your local computer, but on an array of computers housed in various data centers, processing your request, and sending back results to be viewed on your local screen.

This process forms the genesis of cybercrimes. An analogy would be putting many of your personal valuables in your car, and traveling to a foreign destination using the Interstate. You may not know the exact directions to your destination, so you rely on traffic signs along the way. The problem is these traffic signs are nothing more than electronic billboards, and someone can temporarily take over the billboards and give you false directions to lead you to a very bad location. Waiting for you at the end of the road are criminals that can hold you hostage and steal your valuables.

Although a simplistic analogy, consider the Internet a public transportation system, and the information presented along the way, if hi-jacked (hacked), can steal valuable information since you are truly traversing a public road.

The degree to which hackers will go to obtain or hack information is phenomenal. Although the possibilities are endless, two of the most creative schemes are 'phishing’ and 'Trojan horses'. Phishing typically fools users into thinking they are at a legitimate website that asks for proprietary financial information. These sites are carefully constructed and may have every appearance of looking exactly like an identical trusted site. Many times hackers will buy domain names with a slightly misspelled address name to capture unsuspecting, but “too quickly” typed URLS.

Trojan horses are typically received via email and have attachments that request to be opened. These attachments come under the guise of something important that must be opened to receive some important information or benefit. Another analogy would be traveling down the Interstate and the electronic sign changes to say “Free Gas” one mile ahead. You can’t resist, but once you exit, there is not a happy ending.

In summary, if you are going to travel the public highways, better check your destination before you start and have a good guide to rely on to make sure your valuables are kept safe!

Tags: Cyber Security

Cyber Security Part 1:  Understanding Cloud Computing

Posted by Tim Teague on Fri, Feb 19, 2016 @ 10:08 AM

The terms “Cloud Computing” and “In the Cloud” are terms that harken pictures of data sitting somewhere in the sky with no physical attributes. Although nothing could be further from the truth, this terminology still leaves consumers scratching their heads as to how all this data can live up in the sky!


To make the terminology more clear, the day you started using email, you were involved in “Cloud Computing”. It may be more instructive for you to substitute the word “Internet” for Cloud. In other words, any application that requires a connection to the Internet can be considered “Cloud Computing”

The reason we are hearing more about “Cloud Computing” is the extensive array of services that now require Internet connections to use. Many of the applications that users historically loaded to their desktop or laptop computer no longer require these applications to be loaded locally. Some examples of products that have moved to “Cloud” or “Internet” based use include the Microsoft Office suite of products, Quicken, QuickBooks, and a large array of other products that can be accessed and utilized via the Internet.

One of the downsides of “Cloud Computing” is the necessity of a continuous connection to the Internet. If the user has a provider that has numerous outages, these Internet Based applications cannot be used during these outages. The advantages of Cloud based computing is the ability of the provider to automatically provide product enhancements and patches to enhance both security and usability.

So the next time you hear the term “Cloud Computing”, just replace the word Cloud with Internet, and you’ve got it!

Tags: Cloud Computing

Float Pools- Are they working the way you expect?

Posted by Tim Teague on Fri, Dec 11, 2015 @ 10:51 AM


If your float pool or staffing bank is not providing the results you need, you are not alone. One of the great challenges in the acute care setting is the ability to meet the challenge of daily staffing expectations. Two of the major drivers in this challenge can be the random “call-offs” in an already short-staffed cost center, coupled with a census that is becoming more and more volatile.

From a budgetary perspective, what I call “just-in-time” decisions for staffing don’t seem too onerous on that day, but as days turn to weeks, and weeks to months, these daily “quick fixes” can grow out of control.

Just as I tell my kids to scrape the last bit of peanut butter from the jar before throwing it away, too many staffing departments are “buying” new jars before they have truly utilized what is available.

The solution to maximizing a float pool is most often a technical solution. There are a few basic questions that can determine if the float pool is really being maximized.

During the development of the pool, were all affiliated offices, facilities, and units informed of the intent?

  • Are there any “crossover” competencies from participants that might be of use? (Maybe an L&D nurse has had come ED experience.)
  • Is there a true “search and find” function that quickly uncovers all possible matches that include-
    1. Availability (granular down to the hours available)
    2. Matching competencies
    3. Current credentials
    4. Location (within established distances)
    5. Prior experience and amount of time worked (if any) in the requesting unit.
  • Is there a true “interactive” system of delivery and response to needs that incudes text message response to accept or reject?

We find that those facilities that are answering “yes” to these questions are truly “getting every last bit of peanut butter” from the jar and are maximizing available resources while minimizing cost.

Tags: Healthcare, medical staffing, VMS, hospital float pool,, staffing

Healthcare Staffing a Great Place to Be

Posted by Tim Teague on Thu, Aug 13, 2015 @ 09:00 AM

The growth or contraction of the healthcare staffing industry has typically followed the direction of the economy.13 Since hospital census typically takes a dive when unemployment spikes, the need for additional labor softens.

However, the recent rulings by the Supreme Court that essentially left the Affordable Care Act intact and will provide a buffer for such economic downturns. The government subsidized insurance plans will continue to generate revenue for hospitals despite dips in the economy.

A quick look at the macro picture of Affordable Care Act outcomes can be seen in the adjusted revenue projections of insurance giant United Health Group UNH and HCA Holdings HCA. HCA increased its revenue projections for 2015 by nearly a billion dollars, and United Health increased its outlook by $2 billion dollars.

Considering these adjustments came prior to the most recent ruling by the Supreme Court that effectively cleared the way for state expansion of Medicaid, these numbers are likely to rise.

It is likely that the continued subsidization of insurance would be politically untouchable in the years to come. Whether friend or foe of the legislation, it portends positively for the healthcare staffing industry.

Tags: Healthcare, medical staffing, ACA

The Secret to Surving the Nurse Shortage

Posted by Tim Teague on Mon, Aug 03, 2015 @ 09:30 AM

A recent study by Nursing Solutions, Inc. found that the turnover rate for bedside RNs was higher in 2014 than in any of the past five years. Their study indicated an improving economy parallels the increase in turnover fnurse_copyor RNs.
Their study examined turnover by specialty and discovered the highest rate of turnover existing in the behavioral health area, followed by the emergency department and med/surg. 

Their RN Recruitment Difficulty Index averaged 85 days, which continues to pose strategic hurdles for HR departments.

One area that healthcare providers have been slow to embrace is “cross-training” for the purposes of minimizing overtime within the organization. The main reason this philosophy has been slow to gain traction in healthcare is the myriad of credential requirements for RNs working in Joint Commission required facilities.

Today employee matching software if readily available that can scour an organization for “hidden” personnel assets that can be deployed to minimize overtime spend. When examining the skill sets of ALL employees, most organizations find that there is an under-utilization of human resources that are already on the payroll! The two keys to maximizing this lower cost alternative to overtime is instantaneous communication to all matches, and of course matching the multiple skill sets of employees to emerging needs. BlueSky has been a pioneer in making this technological advances in the healthcare HR space.

Tags: medical staffing, Nurse Shortage, overtime