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PPACA is constitutional: Are health systems ready for the tsunami?

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healthcare staffing tsunami from affordable healthcare act
Is a healthcare staffing tsunami heading our way? Be prepared to handle future staffing needs.

When I was in school I never heard the term tsunami.  It was always called a tidal wave.  Maybe somewhere along the way science teachers and journalists decided that the word tsunami sounds, well, scarier.  And we all know that the scarier something is, the more attention it gets so I guess tsunami is just a better term for those in the awareness business.

Regardless of your preference in semantics…the image of a large wall of water slowly approaching, menacingly growing in size as it gets closer, is a visualization that anyone would find terrifying.  To see a tsunami approaching would require immediate action, if not panic.  Most likely both.  That is why the word tsunami is a perfect metaphor for journalists and other talking heads in describing the crisis of the day.  The housing crisis, for example, was “tsunami of toxic mortgages” or “tsunami of foreclosures”.

“Whether services are provided in an inpatient setting, ambulatory, or in the home, health care providers will have to expand their workforce in a big way to meet the growing demand.”

A tsunami is also the perfect metaphor to describe the wave of the 40 million uninsured Americans that will be entering the healthcare market in the next few years.  With baby boomers getting older and the Supreme Court of the United States (SCOTUS) upholding the Patient Protection and Affordable Healthcare Act (PPACA), hospitals and health systems will face a tsunami of insured patients who will be seeking all sorts of care in all sorts of environments.  Whether services are provided in an inpatient setting, ambulatory, or in the home, health care providers will have to expand their workforce in a big way to meet the growing demand. Making matters worse, despite the nursing shortage slowing down, the labor demographics don’t look good into the next decade.  You could say that there will be a reverse tsunami (did I just invent a new term?) of nurses retiring.  So what’s a health system to do to prepare?

To find experienced healthcare workers in a tight labor market will most certainly require health systems to look outside their existing staff to supplement their human resources.  Yes, that means using temporary and contract labor through staffing providers.  Whether it’s nurses, therapists, Locums, HIT contractors or interim management, health systems will rely like never before on their ability to quickly supplement their existing resources.

Time for action?  Yes. Time for panic?  Depends.

While many health systems recognize that technology is the path to sustainable financial outcomes and cost containment, many health systems continue to manage their temp and contract labor manually.  These systems will be less equipped than health systems that have automated their contingent labor procurement and staffing operations with a Vendor Management System (VMS).

Here are the top five reasons why every health system should implement a Vendor Management System to prepare for the approaching tsunami.

1. A VMS costs little or nothing to implement and use

Here’s a case where the axiom, “If it’s too good to be true, it probably is,” is dead wrong.  The advent of the internet gives all kinds of vendors a platform to pay a small fee to provide consumers with easy access to their wares en masse online.  Whether it’s travel sites like Kayak and Expedia or retail deal makers like Groupon and Living Social, sellers of everything have embraced a “supplier funded” model for specialty websites.  A VMS is no different. Staffing vendors will gladly pay a small fee to fill shifts and contract assignments online.  The efficiency of an online system also allows them to lower their own operating costs which keeps bill rates stable and competitive.

2. A VMS allows you to access a wider pool of highly qualified employees

Many health systems have a roster of vendors that they use to fill their temp and contract needs.  However, due to the manual process involved, there is a limit to the amount of vendors that you can rely upon.  A staffing manager or staffing office professional can only handle so many calls, emails, faxes and invoices from different vendors before they cry “Uncle.”  This limits the pool of available staff to only the vendors that have made it to the top of the call list.  With a VMS, the amount of time and energy that goes into hiring, managing and paying one vendor is the same as with 10 vendors or 100.  The economies of scale tip in favor of the health system and the result is a wide pool of available staff from a large pool of contracted vendors.

3. A VMS ensures the staff that you receive are compliant

I’ve never met anyone that disagrees with my assessment that humans are fallible in a way that technology isn’t.  A good VMS is configured in a way that reduces the possibility of human error. For example, maintaining a compliant workforce is much simpler with a VMS.

  • Staff that are submitted for your needs match your requirements exactly, every time, and without question.
  • You’re allowed to review and approve a staff members credentials online and then forget about it moving forward.
  • Alerts and notifications are sent when credentials are approaching expiration or have expired.
  • Staff members can be disallowed from matching to future orders if their credentials have expired.

Quickly accessing staff is one thing.  Ensuring that they are compliant with your unique requirements and credentials is another.

4. A VMS will keep your bill rates at or below the market

I often hear health systems say things like “If you are charging a fee to the vendors, the rates are going to go up not down.”  Aside from the fact that our clients will go on record either through a reference or case study to confirm that rates do in fact go down, all you have to do is look at the broader market to understand how the dynamic of an online marketplace has a dramatic effect on cost in favor of the consumer.  Whether it’s rental cars, golf tee times, or DVD players, when you shop online, there is tremendous competition and the vendors know it.  To be successful, they are forced to keep rates down. Otherwise a more aggressive competitor will win the business. By creating the same dynamic for temp and contract staffing, a VMS ensures that you are not only being efficient, you are not overpaying for services.

5. A VMS allows you to use your internal contingent workforce before going outside to vendors

Health systems loathe using outside vendors, yet many of them employ a manual process which all but ensures that they will continue to do so.  For a busy staffing manager or staffing office worker facing a severe shortage of staff, the perceived easiest path to fill a shift is to call up a staffing vendor who will move mountains to get someone there and make a profit.  The best thing for the health system would be for that staffing manager to find an internal staff member to pick up that shift.  But in order to find someone with a manual process, managers have to call down a list of staff leaving voicemails or hoping that someone picks up.  In the end, placing a phone call isn’t a simple solution, but rather a mess of cost overruns and subpar hires due to an inefficient use of resources.  With a VMS, orders can  be distributed internally and electronically through emails, text messages and online postings.  Staff who are interested can quickly respond to pick up extra work.  By creating a supply chain of labor that favors internal staff over external staff, health systems lower costs dramatically by lowering their outside agency use.

Nobody will argue against the idea that a tsunami is approaching in healthcare.  And Murphy’s Law will ensure that it comes at a time when boomers will be falling off staffing rosters in health systems nationwide at the highest rate ever.  A VMS can help to prepare your health system for the approaching wave of patients that will stress staffing demands like never before.  Now is the time to act.

Panic? Not if you implement a VMS in time.

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