What’s your strategy for that healthcare Vendor Management RFP?

Rfp-vms Occasionally, hospitals are unaware of all their options when it comes
to Healthcare Vendor Management Services.  When considering
their options, they often turn to their suppliers and send out a Request For Proposal (RFP) for Vendor Management
services to their supplier list. 
When this happens many staffing suppliers decide this to be the time to
put together a VMS strategy and respond to the RFP.  The reality is – it’s the worst time.  These suppliers quickly find out that, by the time
they receive the RFP, it’s too late to put together a VM strategy.

When these RFP’s go out I get calls from healthcare staffing
suppliers asking about partnering with ShiftWise to provide a VMS
technology solution for them so they can respond to the hospital’s RFP.  Most of the suppliers calling have several questions because they are considering providing the service for the first time.  When I get these calls the conversations usually go like this:

    Me:  “Have you ever provided VM services to a client before?”

    Supplier: “No”

    Me:  “Have you thought about all you need in order to
run a successful
        VM program?”

    Supplier: “I’m not sure.”

    Me:  “Do you know if you have the capacity to provide VM services?”

    Supplier:  “I think so.”

    Me:  “Are you confident your competitors will want to be a subcontractor
to you?”

    Supplier:  “No.”

    Me:  “Why is it you want to provide VM services to the hospital?”

    Supplier:  “Well, that’s what they want and I don’t want to lose their

    Me:  “Do you know what kind of SLAs you can offer?”

    Supplier:  “I was hoping you could give me some guidance there.”

During the conversations it’s often evident the supplier
doesn’t have enough information from the client to properly respond to the
RFP.  Often, the supplier doesn’t
know how to answer basic VMS questions on things like fill rates, pricing,
subcontractor participation, liability, money management, reporting, SLA’s, and
application functionality. 
Further, more often than not, the supplier informs me that they’re competing against one or several large staffing
companies that successfully run VM/MSP services throughout the country.

Invariably, the final result of the RFP process is the same – the supplier submits their best
response and a few months later receives a letter from their
competition stating that
they will now be a subcontractor at this client location.

The quick summary is, unless offering Vendor Management Services is part of your company
strategy and is something you’ve planned and prepared for, the chances are very
slim you will successfully bid on such an opportunity.  Especially if you put your plan
together after you get the RFP.

There are many obstacles to overcome in order to implement a successful
VMS as a healthcare staffing supplier and it’s important to consider them before responding to the RFP, These considerations include:

Compliance.  Hospitals
have multiple and complex compliance issues, many of which you’ve dealt with as
a staffing supplier.  However, how
will you handle the hospitals compliance policies not just for your company and
staff but for all the companies and staff that will work with the
hospital.  Will you standardize the
process?  Automate it?  What kind of best practice advice can
you offer?

Liability.  Handling
liability for your staff is one thing. 
Handling it for you and all your subcontractors is a completely separate
issue.  Will you take on this
liability or pass it on to the sub-contractors or the hospital?  Will your insurance requirements increase?

Subcontractors.  Your
subcontractors are your competitors. 
Are they going to be ok sending sensitive information through you,
including staff and payment information? 
Healthcare staffing suppliers have to deal with multiple VMS/MSP
offerings in the market today.  Are
they going to be willing to add one more by working through you?  What will you do to earn their support?

Resources.  Do you have
enough resources to manage this account as a Vendor Manager?  What are the management requirements – on-site, virtual, automated
management only?  Will you have to
staff up?  If so, will the cost of doing so outweigh the revenue

Automation tool.  Do you
have a way to automate this service? 
If not, all you will be doing is taking on the hospitals costly and
labor intensive manual staffing process.  In
addition, creating a tool yourself will be considerably time consuming and
costly.  It will also put you in
the business of creating software. 
Is that the business you’re looking to be in?  (Trust me, if you start down this path – you don’t get off).  If not, your best option is to establish a partnership with
a Vendor Management technology provider.  It’s
best to establish this partnership and have the terms in place, prior to
receiving and responding to the RFP.

Service Level Agreements (SLAs). 
What are the SLAs the hospital is planning on holding you to in terms of
fill rate, time to fill, application up time, etc?  What SLAs can you meet and how will you meet them?

Additional services.  Most hospitals want you to do more than simply place and
fill orders for their temporary staff.  VM services can also include time keeping and invoicing, recruiting, orientation and
on-boarding services.  In addition, often times hospitals will want assistance with managing staffing for their internal staff which presents a completely separate set of other issues.  Are you
experienced and prepared to offer services in these areas?  Have you considered the costs of doing

Focus.  Vendor Management
services are comprehensive – aka – costly and time consuming.  They require full attention.  Can you afford to concentrate so much
attention on one client and risk losing focus on your other clients?  How will you ensure this doesn’t

So, what’s the alternative? 
My suggestion is that, instead of spending time filling out an RFP only
to lose the bid to a competitor that has more experience with Vendor Management
Services, implement a more effective strategy by doing any/all of the

Partnership-thumb Partner.   Establish
a partnership with a company that provides Vendor Management services.  Since you’re most likely in a position
to handle the services component, partnering with a VMS technology provider
makes a lot of sense.  Many VMS
technology providers have partnership opportunities and some will even license
their technology for you to use in a Managed Services capacity.

Referrals.  Perhaps you simply don’t have the capacity to provide Vendor Management Services
or simply don’t wan the liability and burden.  If this is the case, establishing a referral agreement with
a MSPs or VMS technology provider is another good option.  By referring the services of
another company you can often earn additional revenue or other incentives such
as discounted fees from this company.  This is a much
better option than simply losing the bid and receiving the standard contract
from the new VMS provider.

First Tier Relationships.  What many suppliers are really seeking from a VMS
opportunity is to access and fill more of a client’s business.  Earning a First Tier agreement
is a good way to do that without the additional burden and liability of
providing full vendor management services.

Hospitals will often award First Tier agreements to staffing
suppliers, which means the supplier gets access to the hospitals needs in
advance of their competition.  A
standard First Tier award for a healthcare staffing supplier typically means the supplier will receive orders in
advance of their competition by 2 hours for Per Diem and 48 hours for travel assignments.  Many hospitals will award such an
agreement for lower bill rates, guaranteed fill rates, or
excellent service and performance.

A First Tier award can more than double your business at an
account, keep you from the liability and burden of providing Vendor Management Services, remove you from the competitive battles of dealing with subcontractors,
and improve efficiencies for you client. 
In addition, most VMS technology providers have functionality that
accommodates First Tier agreements, enabling these benefits to be fully

These suggestions aren’t simply a ploy to get you to send more
business to VMS technology providers. 
These are viable options that will help you achieve your goals and stop
wasting time trying to provide a service that is expensive, time consuming and
with which your experience is minimal to non-existent.  It’s natural for us all to want to service
our clients and provide them with whatever services they request.  However, not every company can provide VM Services and spending time on RFPs to
compete against companies that have vast experience providing such services is
a waste of time.  

What’s your strategy for the next VMS RFP you receive?  If you don’t know, I’d suggest getting
a plan in place now before you get the next one.

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