SI Review: January/February 2014

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Counterpoint: The VMS/MSP debate

To Participate or Not

Bob Livonius of AMN Healthcare Services Inc. and Melissa Byington of CompHealth write about their views of VMS/MSP in the locum tenens space.

MSP/VMS dramatically simplify the chaos of dealing with dozens of locums vendors

By Bob Livonius

What do Computerland, Blockbuster, Montgomery Ward and many tenured healthcare staffing companies have in common? They lost touch with the needs of their clients. Their products and services remained in demand, but delivery of those products and services underwent disruptive change, and these companies didn’t embrace the transformation.

These companies probably voiced similar assertions to those repeatedly voiced about managed services programs (MSP) and vendor management systems (VMS) in locum tenens: “We will never take part in an MSP”; or “VMS will never work in healthcare. Doomed to fail, period.”

As it turns out, MSP/VMS are working very well in healthcare, just as they have in other industries for decades. Approximately 30 percent of healthcare providers currently utilize MSP and VMS, with another 20 percent planning to implement these services in the next couple of years.

This growth is not hard to understand — if you look through the clients’ eyes. MSP/VMS dramatically simplify the chaos of dealing with dozens of locums vendors, while enforcing uniform quality standards. As the number of locum agencies has exploded, healthcare managers and clinicians are now inundated by a sales and marketing tsunami, which frustrates everybody and creates disarray as more firms battle over dwindling supply to fill growing demand. MSP/VMS end the chaos through “one and done”: One partner managing all staffing vendors.

Finally, and contrary to the assertions of some staffing agencies, vendors that affiliate with an MSP can realize greater revenues by eliminating sales commissions, speeding up collections, protecting existing business and obtaining incremental business.

Efficiency always wins in the end. The history of commerce is built upon disruptive innovations that change the game for clients — and littered with enterprises that ignored change and became irrelevant.

Bob Livonius is president, strategic workforce solutions, at AMN Healthcare Services Inc.

No, MSP/VMS programs demonstrate poor service

By Melissa Byington

Over the past 17 years, I’ve watched my company and the locum tenens industry get smarter, faster and better at placing physicians. Though technology has played an important role in these improvements, the best locums companies know their obligation to help clients deliver patient care goes far beyond what is listed on a job description or found in a database.

At CHG Healthcare Services, we ask our clients what they expect from a locums company and the feedback is always the same: service, deliverability and quality. Experience and data suggest that MSP/VMS programs perform poorly in all of these areas. That’s why CHG, like several other large staffing companies, chooses not to participate with MSP/VMS for our locums business.

Let me explain our concerns with the MSP/VMS model:

  • Lower service scores. MSP/VMS net-promoter scores indicate a very low satisfaction rate, with more than 90 percent of clients reporting dissatisfaction with their service. Conversely, only 7 percent of clients express dissatisfaction with our direct staffing model.
  • Decreased deliverability. Additional points of contact created by the MSP/VMS model often result in a communication bottleneck. When communication lags, so does deliverability. Physicians and clients become frustrated by the extended timelines and staffing firms send their best candidates to facilities where direct relationships exist. From a deliverability perspective, working through a MSP/VMS is a move in the wrong direction for our customers.
  • Compromised quality. High-risk situations require the ability to connect immediately with clients and directly represent physicians. In an MSP/VMS model, relationships between the staffing firm and client are contractually severed, making it unclear where risk and accountability ultimately lie.

We deliver based on our customers’ priorities. Until we see MSP/VMS programs demonstrate better service, deliverability and quality, we will continue to work directly with the doctors and clients we serve.

Melissa Byington is president of the locum tenens division of CompHealth.

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CHG Healthcare

Chase Johnson 03/12/2014 10:57 am

The CompHealth model makes much more sense to me. When it comes to healthcare, quality should never be compromised. With the VMS/MSP model, quality appears to be an after thought. With higher touch/service, facilities can expect a better final product. Thank you, Melissa for not compromising quality in exchange for quantity.


National Healthcare Staffing Alliance

Colleen Mills 03/11/2014 06:41 am

Bob Livonius, in the words of President Ronald Reagan – “There you go again”! In this most recent posting, you stated that many company failures can be attributed to “They lost touch with the needs of their clients. Their products and services remained in demand, but delivery of those products and services underwent disruptive change, and these companies didn’t embrace the transformation.” Well, in the case of the independent healthcare staffing agencies, oddly enough I find myself agreeing with your premise and no, a certain place has not frozen over. The agreeable me though would define the “disruptive change” to actually be MSP’s and their role in the business relationship to the client. MSP’s force the independent agency to lose touch with client needs and experience a loss of relationships (sometimes decades in play) and this is a very real issue. Your particular MSP forbids any client contact or relationship and so going through third party communication routes make it extremely difficult for the independents to have a true sense of the needs and issues for the client, never mind trying to problem solve on behalf of the client or themselves. The independent staffing agencies, usually the smaller guys, are very relevant in servicing the healthcare providers, but treated in such a manner as to suggest they are not a critical part of the patient care equation. As a matter of fact, rules and proprietary data gathering trump quality patient care initiatives that independents want to be a part of. MSP is a disruptive change in the industry and yes, failure to embrace the transformation is a legitimate reaction to the bully tactics of the MSP and their take it or leave it mentality.

And again I agree that a growing demand creates battle lines over limited human resources, but MSP and the mega databases created with mergers such as AMN and Shiftwise is much more dangerous for the independent agencies. Candidate submission data and the perils associated with the migration of that data and the increased risk for identity theft and other privacy concerns is just one of the many critical issues there.

But then I leave the land of OZ when you say an agency can realize greater revenues (some report bill rates CUT by 15-20%), protecting existing business (no communication with the client is a sure show stopper there), and with no avenue to differentiate themselves from the crowd, how can they have any control over growing their business opportunities with the client. Seems to me that if they embrace your idea of change, independent agencies will indeed become irrelevant. Meekly submitting to your idea of change will also make them extinct.

My sincere gratitude for Melissa Byington’s spot on counterpoint to your commentary. She does a great job of providing an objective and comprehensive perspective on taking a path less traveled and refusing to do business with MSP’s. Great job CHG!


Preferred Healthcare Registry, Inc.

Barry McDonald 03/10/2014 04:00 pm

Mr. Livonius makes a compelling argument for MSP/VMS, if indeed these services delivered on their promises. The MSP/VMS market in health care is still in its' developmental stages. It's be foolish to state that you'll never work with MSP/VMS platforms when you cannot predict what the future holds. In business you have to make a lot of decisions and why would a quality provider service a MSP/VMS except as a last resort, considering the challenges and cost of the existing providers? The average MSP/VMS fee continues to increase to the extent that MSP/VMS fees are higher than the average profitability of a staffing firm.

Ms. Byington highlights some of the key problems with MSP/VMS! The selection of candidates is often tied to factors other than quality; which is a major factor leading to client dissatisfaction. As for billing, we have not seen any improvement with A/R and there's additional manpower needed to process candidates and invoice MSP/VMS providers.

The market will determine the viability of MSP/VMS. I'm confident that the MSP/VMS providers with the best technology, service, and most reasonable fees will capture the lions share of the market. As it stands, I haven't found an MSP/VMS provider that stands out ahead of the pack. Change is inevitable, but in my opinion MSP/VMS has not been good for patient care. If you're in the healthcare staffing industry, your focus must always be on the recipient of our services, the patient. The only way MSP/VMS will be effective is if the quality of care to patients is not compromised.


Tom Kloiber 03/10/2014 02:52 pm

"Speeding up collections"? Mr. Livonius, my A/R agings and I respectfully disagree.


Allegiance Staffing

Tom Landry 03/10/2014 02:29 pm

Amen Melissa,

This goes beyond healthcare, it is in all verticals. The MSP provider negotiates with the client and then goes out and supplies the services that agree to the terms, that is not vetting! I was recently told that the MSP couldn't add us to their list because the contract was to new and they don't add new suppliers that fast. The client requested us after three of the "approved vendors" failed, is that customer service?

No wonder they get the NP scores they get. The concept of MSP is great if it is followed. We will manage the staffing segment, supply the best in class for each segment, IT, Finance, Engineering, LI etc. and leverage your spend to max the value. That is not what happens. The CEO's should spend more time out in the field talking to their clients. The only people happy are the procurement people who have no accountability to the downstream effects of their decisions.

Out of the 20 firms receiving the 5 year Diamond Award how many service MSP's on a regular basis? And how come the MSP's are not beating down the door to these companies as suppliers to their clients?


Denise Rolleri 03/05/2014 04:11 pm

Bravo Melissa! Very well stated, I couldn't agree with you more.......


Total 6 comments