Manageable Labor Costs and Satisfied Clinicians: How Healthcare Systems Can Have Both

Beneficial disruption of a longstanding business model must begin with listening to those the model no longer serves.

In the case of the temporary staffing model for clinicians that meant listening to the healthcare systems and other organizations which employ them, as well as to the clinicians themselves. The Covid-19 pandemic exposed the flaws in the current system that relies too heavily on traditional third-party staffing agencies: high costs and a lack of transparency for employers, mismatched credentialing, and uncertain options for clinicians who prefer temporary work arrangements.

Three themes have emerged during listening sessions with facilities and clinicians:

Rising workforce costs must be contained. Healthcare systems are still recovering from the financial impact of the pandemic and labor costs are a main reason why, according to a recent report from healthcare consulting firm Kaufman Hall. Hiring temporary and travel nurses and other clinicians through third-party staffing agencies has been a contributor to those costs, which must be brought under control for hospitals to regain acceptable operating margins.

However, employers cannot simply stop using temporary hires, and they will need partners to solve their full staffing needs. The clinician shortage is too great and many of those nurses and techs who remain have made it clear they prefer the temporary model for its greater flexibility and choice. 

It’s evident that any solution to the problem cannot favor employers or clinicians at the expense of the other party. A fair model must strike a balance between competitive pay, flexibility and good working conditions for clinicians and significant cost savings for health systems.

Employers want more self-reliance. No longer able to afford third-party agency fees for a high percentage of their staff, facilities are looking inward for better ways to meet their workforce needs. Some are even creating internal staffing agencies to maximize their resources. The priority among healthcare systems now is to reduce labor costs by making better use of their own PRN clinicians first and relying on travel nurses only as a last resort. Done correctly, this can help employers retain more clinicians who will no longer feel they have to sign with staffing agencies to get the flexibility they prefer.

Facilities are turning away from the current staffing agency model. Healthcare systems emerged from the pandemic feeling that they had been taken advantage of by staffing agencies that raised their rates and saw profits rise due to unprecedented demand. They are fed up with the fees and murky invoices which don’t disclose all costs and markups. They want greater control over who they’re hiring and assurances the hires have the correct credentials.

Taking greater control of staffing is a smart move for healthcare systems, but it can be a challenge for them to do on their own. Having the right workforce solutions partner in place is key. Legacy systems that rely on phone calls, text messages and manual tasks will not be up to the job. 

Luckily, a new model has emerged, one that uses AI-powered technology to power a system that benefits clinicians and employers alike, while minimizing the role of third-party agencies and travel nurses. It saves hospital systems money and provides total transparency in pay and pricing.

The cloud-based, two-sided platform lets employers see available talent, both internal and agency, through a portal and submit and track their support needs. Clinicians can apply for posted roles, upload and manage their credentials, and build professional profiles to find the best opportunities for their needs and skills.

Facilities will be able to post shifts and first select from a pool of internal team members to fill them, augmenting with agency staff when needed. An AI-powered platform makes it easy for clinicians to choose and schedule open shifts and for healthcare facilities to meet their needs.

After their experiences with agencies during the pandemic, facilities are understandably interested in pricing transparency. They want to know pay rates, travel costs and markups. Under this new model, these items are clearly detailed. Clients who adopt this new model will better utilize their own resources and depend less on agency staffing and travel nurses. For remaining contingent staff needs, facilities can expect to save on average 15% on core staffing services and, with the integration of a full suite of accompanying technology and analytics offerings, their savings are likely to exceed 20%.

This new workforce management model will let employers control their labor costs while providing clinicians with the choices and flexibility they want. It’s a disruption that benefits all.