Common terms related to Healthcare Vendor Management


Vendor Management Services/Vendor Management Systems (VMS) – VMS technically refers to a web-based software application a client uses to manage the suppliers servicing the clients staffing needs. VMS systems cover a wide spectrum of features that can include job requisitions, credential management, interview scheduling, time keeping, invoicing, performance measures, notification systems and data reporting.  VMS companies may or may not offer multiple product offerings as well as a suite of services.

Vendor/Supplier – An organization that provides contingent labor services to a client.   Also, Supplier is a much nicer term than “Vendor.”  Who came up with that one anyway?

Vendor on Premise (VOP) – An organization that has a physical presence on the client's premises.  The VOP is the primary staffing entity for the client and works to meet the clients staffing needs 100%.  In order to do this the VOP will often times contract with other “Sub-Contractors” that may be partners or competitors.  VOPs may or may not use technology to manage this process.  Essentially, it’s a Managed Services Provider with a more ominous name.

Managed Service Provider (MSP) – A nicer sounding name for a VOP with a few twists.  An MSP isn’t always located physically at the client location.  Occasionally, MSPs bill themselves as being more “Vendor Neutral” by not actually providing staff to the client in all cases and working with the client to find the best performing suppliers according to the client's requirements.   MSPs may or may not use technology to manage this process.

Vendor Manager (VM)/Vendor Management Organization (VMO)
– Term given to an organization providing Vendor Management Services.  It is not specific to any model.

Group Purchasing Organization (GPO) – An organization that purchases goods/services in bulk and offers them to clients at discount pricing.  GPOs have entered more into the services realm in the last few years, offering vendor management services, similar to that of an MSP or referring partne,r as part of these services.  Such services may or may not include a technology solution and often times involve Rate Compression or Standardization as part of their service.

Hospital Association (HA) – Each state has a hospital association that provides advocacy for the hospitals in its state.  These associations can be for or non-profit.  Several state Hospital Associations also offer products and services to their member hospitals.  In recent years, many of these organizations have started managing the staffing services for their member hospitals much in the way an MSP does.  Such organizations may or may not include a technology solution in their offering. Early on, these organizations we’re involved with Rate Compression as part of their service but have moved more toward Rate Standardization or avoided rate negotiation all together as part of their service.

Vendor Neutral – This is a term used when the organization providing VMS/VM is a neutral 3rd party and does not supply staff or disproportionately advocate for one supplier or group of suppliers over others.  True Vendor Neutrality cannot come from a staffing supplier.  Often times staffing supplies argue that they too can provide vendor neutrality.  However, I’m not quite sure how that is possible since they are in fact – a vendor – managing their competitors. 

– This term refers to suppliers that are sub-contracted to a primary staffing company that is providing Vendor Management services to a client.

Affiliate Partnership – A partnership whereby a company receives service fee discounts or revenue sharing opportunities by advocating for or referring the services of a VMS provider.

Contingent/Supplemental/Temporary Staff – Staff provided to a client or directly employed by the client on a temporary or contract basis.

1st Tier/1st Call – A process whereby a staffing supplier (or group of suppliers) receives access to all open job requisitions of a client 1st for a specified period of time, prior to these requisitions being distributed to another supplier (or group of suppliers).

Internal Resource Pool (IRP) – A group of contingent staff employed by the hospital for the purposes of filling open job requisitions.  IRPs are often implemented as a strategy for reducing or eliminating the usage of outside labor from staffing suppliers.  Such labor pools are typically built and managed by the client directly but are often built and managed by outside companies (potentially even staffing suppliers).

Supplier List – Pretty much what it sounds like.  A list of suppliers that a client or VMS provider works with for contingent labor services.

Per-Diem/PRN/Daily – A single shift that occurs on a specific day.

Long Term/Contract/Traveler – A job assignment that has one healthcare professional on an assignment for longer than one day.  Typically, this is in the form of a 4, 8, or 13 week assignment.  Often times staff work in different parts of the country and are required to “Travel” to the assignment.

– Term to describe how many candidates are being accepted by a client versus the number submitted by a supplier.

– Sending summary or detailed (client dependent) information on a healthcare professional for the purposes of having the client pre-screen and review their qualifications prior to accepting the candidate for a position.

Scheduling – The act of placing staff into open positions.  This process typically involves job requisition, profile screening and verification and acceptance.

Core Scheduling
– The primary scheduling performed by a hospital for managing and scheduling their regular, full time (core) employees.  This process often begins with patient census, acuity monitoring and staff to patient ratio tracking and is done in 4 week blocks with a watchful eye on labor and overtime rules.

Self-Scheduling – The ability for hospital or supplier staff to set their own availability and hospital preferences, as well as determine their own schedule.  Typically, this term is used in regard to a software application that allows for such functionality.

Contingent Workforce/Labor
– Temporary or flexible employees that work for a hospital on a part-time, flex or contract basis sometimes under a different set of rules, guidelines and pay structure.  These labor resources can be employees of the hospital or a staffing company that supplies the contingent worker to the client.

Bidding – The process whereby open job positions are awarded (or considerations are given) to staff or staffing suppliers based on the rate, conditions and additional incentives offered or “bid” on by the candidate or supplier.

BPO (Business Process Outsourcing)
– The model in which a company (staffing supplier or other) provides a hospital client with complete business process operation management.  This service can be delivered on or off-site of the client location and can include recruiting, hiring, credentialing, interviewing and staffing.

Centralized Staffing – A hospital system of staffing management whereby the staffing of the hospital is done by a centralized office, entity or company.

Decentralized Staffing – A hospital syste
m of staffing management whereby the staffing of the hospital is done by multiple people (often unit supervisors/managers).

Clinical Staffing – Refers to the staffing of clinical staff.

Non-Clinical Staffing
– Refers to staffing at a hospital location of non-clinical staff.  The distinction seems obvious but can be necessary, as non-clinical staffing is very different than clinical staffing.

Pricing & Payments

Rate Compression
– Decrease in the bill rates staffing suppliers charge their clients.  Typically, this term is used to describe an involuntary rate reduction that is being mandated directly by the client or through a 3rd party such as a Vendor Manager.

Rate Setting/Rate Standardization – Service whereby the client or the Vendor Manager standardizes or sets the rates at a particular price point.  Such a service can provide the client with simplicity by having one set of rates and can potentially lower spending if the rates end up being lower overall.  This can be different than Rate Compression as it does not always lower rates for all or any suppliers.  Such a practice has to be done skillfully and with much research.  If rates are set below what the market delivers the client can end up with a lack of supply or lose suppliers due to the ability of the suppliers to find market rates in other areas.

Contract Management/Standardization – Implementation of best practices/standards for contract terms and policies governing the relationship between the client and the staffing supplier.  Such a service delivers a consolidated contract and set of terms to the client. Often times the company providing such services manages the entire contracting process from contract creation, to negotiation, to contract signing.

Consolidated Billing – Service whereby the client receives a single, aggregated invoice for all services billed by the staffing suppliers they work with. 

Reverse Invoicing
– The client technically invoices the supplier, as the invoice is actually being produced from data the client creates, approves and sends to the supplier for dispute or approval prior to payment.

Escrow Payments – Payments from the client go through an escrow banking service and are then paid to the suppliers from the escrow service.  Absent such a process, monies owed by the client to the staffing suppliers are paid directly to the Vendor Management company.  The Vendor Management company is then responsible for paying the suppliers.  Refer to the Chimes bankruptcy for further understanding as to why such a service is beneficial.

Service Fee
– The fee charged by the Vendor Management company to the staffing suppliers servicing the client.  This fee is most often a percentage of total billings charged and ranges from 1 – 5% in the healthcare staffing industry. 
Example:  Supplier bills client $50/hour and books a 10 hour shift.  Client owes the supplier $500.  The Vendor Management Service Fee is 3% of the $500.  The Vendor Manager is paid $15 and the supplier receives $485.

Supplier Funded
– The staffing supplier pays all or a portion of the Service Fees charged by the Vendor Manager.

Client Funded
– The client pays all or a potion of the Service Fees charged by the Vendor Manager.

Technology Systems

Implementation – The process of implementing a VMS.  Implementation can mean the installing or being trained on software, collecting data, establishing space for on-site managers, documentation, new policy creation and execution of Vendor Management program.

– The process of being trained on the workflow and business process of the VMS either in terms of learning new manual functions or learning how to use the VMS software application.

Client-Server Software – Software that is hosted and often times installed by the client on their servers.  This was how software was initially delivered.  The upside is that the client has full control over the software and it is contained within their walls.  However, the client also has the associated implementation, support and maintenance costs in addition to a significant amount of work to handle any upgrades.

Web-based Software
– Software that is hosted by the company supplying the software that the client accesses through the web.  A more current and preferred method of using software.  Client typically has no implementation, hosting, maintenance or support obligations.  Also, software upgrades are seamless and security rights management can make such software just as safe and secure (if not more so) than client-server based software.

Systems Integration/Interfaces – The process of allowing separate software applications to import and export data to each other.

Application Programming Interface (API)
– Fancy word for Systems Integration/Interface.  An open API is where a company posts a set of routines, data structures, object classes and protocols provided by libraries and operating system services in order to support the building of applications or interfaces to or from this product.

Time Keeping – System or process for managing and documenting employee or contingent worker time.

Credential Management – System or process for managing the credentials of staff.  For clinical staff, the credential verification, approval and storage process is often a large task if done manually.

Performance Evaluations – Process for evaluating employee or contingent worker performance.  Many hospitals and staffing suppliers have different standards and guidelines for when/how this is done.

Order Requisition
– Process of a client communicating open shift and assignment needs to staffing suppliers either manually (phone, fax, email) or through an automated Vendor Management system.

Data Collection/Reporting
– Ability to retrieve, read, manage, track and utilize data surrounding the staffing process.

Thanks for reading. If you have any questions about the healthcare vendor management terms listed above please feel free to contact us. Visit the rest of our site for more information on our products and services including Jobbee, a WordPress Job Board Plugin that integrates with all major VMS’s and Applicant Tracking Systems such as Bullhorn.

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