Despite the recent turbulence, healthcare staffing remains a great industry. However, more must be done to get the message out about the value it offers to customers and to stymie unhelpful government regulation. These are just two of the issues covered by five top executives from some of the largest healthcare staffing firms in a panel discussion today at SIA’s Healthcare Staffing Summit.

Bart Valdez, CEO of Ingenovis Health, said the industry needs to think about itself in a new way and bring forward its value proposition.

“When you think about what we do, it’s an incredible value,” Valdez said, but the industry needs to change the conversation with clients so it’s not seen as simply a cost component.

One difficulty: Healthcare executives — the industry’s clients — face a myriad of their own challenges ranging from lagging reimbursement to tight margins, and the staffing industry’s message needs to reach them.

“They have really tough jobs,” said Cary Grace, AMN Healthcare’s president and CEO. One key is educating them on the labor market and where money is going. Some executives think staffing firms are taking all the money when it’s actually flowing to clinicians, who put their wellbeing at risk and left their families during Covid.

Transparency is key, Cary noted. “We need to collectively [spread] truth because it benefits all of us,” Grace said. “And we [need to] establish those fact-based relationships with the health systems because the reality is we are a very important part of the solution to their challenges.”

Shane Jackson, president of Jackson Healthcare, also said hospital executives face huge challenges, noting 66% of hospitals had to close beds because they lacked staff. And it was just this year that hospitals’ average operating margin turned positive.

“We have got to be at the table with these guys,” Jackson said. “We have to educate people on the facts and realities on the labor market.”

Jean Cook, COO of Travel Nurse Across America and president of the National Association of Travel Healthcare Organizations, also pointed to data showing healthcare staffing firms operated on compressed margins as money flowed to clinicians.

The industry definitely needs to get out a clearer message, and that will likely mean the large companies will have to cooperate, said Alan Braynin, president and CEO of Aya Healthcare. Otherwise, the industry will continue to be a scapegoat.

“We can all be very fierce competitors. We don’t even have to like each other,” Braynin said. “I think that we have to unify around a value proposition, a common message to our constituents.”

Getting the message out is one factor in fighting legislation targeting the industry. Ingenovis’ Valdez said the industry could get crushed if it’s not able to fight the narrative legislators are following to add regulation.

“I think that there’s some strong stance that we have to come up with,” he said. “We have to set a charter, and then we have to fund it and make sure that we’re being much more proactive in taking on any legislative events that are occurring.”

Inflection Point

“The biggest opportunity our industry has is how do we build trust?” AMN’s Grace said. “How do we rebuild trust with our clients? How do we create trust around the value of the services we provide? And a big part of that — you can’t control every part of the legislative piece — but a lot of the more recent legislative action has been them trying to control what they perceive as a lack of transparency, especially around what happened with Covid.”

Grace continued, “I really do think that we’re at a unique inflection point in the industry and the power of us really being collaborative together around representing the industry will really drive great outcomes.”

Panelists also looked back at what the industry has been through and what lies ahead.

“This has just been an incredibly dynamic market,” Valdez said, adding that he thinks things will continue to bump along for awhile amid artificial suppression of demand.

“We’ve got at least another two to four quarters of challenging times ahead, but two to four years from now, this will be a distant memory,” he said.

Grace noted the industry has been growing, though the Covid pandemic represented a spike.

“If you look at structurally what is happening in terms of healthcare overall, what we are doing has never been more important,” she said. Looking ahead, “I think the second half of this year felt much worse than what next year is going to feel like.”

Regression to the Mean

Aya’s Braynin said he sees the industry as regressing to the mean after the spike from Covid.

“Demand now is historically very strong,” he said. “It’s just not strong compared to what it was like two years ago, and so we’re seeing a regression to the mean.”

Some actors in the healthcare space overreacted during Covid and sent rates and demand up to unsustainable levels. But now there is overreaction to drive rates and demand down to likewise unsustainable levels.

“The system will overcorrect the wrong way for this industry, and then there will be some sort of equilibrium that’s reached over the course of the next 12 months,” Braynin said. “I do see lower volumes in travel nurse and allied. I do see margin compression, and I do see other segments of the industry potentially beginning to have some compression in margin based on actions of various actors in the space.”

He continued, “I hope I’m wrong, but I don’t see as rosy of a picture. … We’re not going to go back to 2021. That’s not going to happen in the foreseeable future unless there’s some sort of outlier event that drives it that way.”

The Healthcare Staffing Summit concludes today.