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 means listening to the health care systems and other organizations that employ them, as well as to the clinicians themselves. The COVID-19 pandemic exposed the flaws in the current system, which 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.
Our conversations with health care system leaders and clinicians have led us to these conclusions:
Efforts to contain rising workforce costs must balance cost savings with clinicians’ needs. Health care systems still are recovering from the pandemic’s financial impact, which was fueled by high labor costs, according to a recent report from health care consulting firm, Kaufman Hall. Hiring temporary and travel nurses and other clinicians through third-party staffing agencies has contributed to those costs, which must be brought under control for hospitals to regain acceptable operating margins.
But the new normal — nurses and techs who have made clear they prefer the temporary model for its flexibility and choice — means employers cannot simply stop using temporary hires and return to old staffing practices. The clinician shortage is too great.
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.
In-house solutions can provide a pathway to cost savings. 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 health care systems now is to reduce labor costs by making better use of their own PRN (on call) 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 need to sign on with staffing agencies to get the flexibility they prefer.
Health systems can benefit by taking greater control of staffing — but they’ll need to leverage technology and trusted partners. Facilities are turning away from staffing agencies, which they believe took advantage of unprecedented demand during the pandemic to raise rates and reap excessive profits. Further, they’re fed up with the agencies’ high fees and murky invoices, which don’t disclose all costs and markups.
Health systems want — and should have — greater control over who they hire and assurances the hires have proper credentials. It’s a smart move but one that can challenge an organization working with legacy systems that rely on phone calls, text messages, and manual tasks. With the rise of AI-powered technology that can benefit clinicians and employers alike — and minimize the role of third-party agencies and travel nurses — health systems now have options.
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, and I’m proud to lead a company, SnapCare, on the forefront of this evolving work.
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