Healthcare Vendor Management Company - Medefis Acquired by Private Equity Group

Medefis, a technology vendor management provider to the healthcare staffing industry announced that they were acquired this week by a private equity group called Welsh, Carson, Anderson & Stowe.

Medefis was started by three individuals who were former employees of the healthcare staffing agency Aureus in Omaha, Nebraska. Their approach to the market has been to deliver a light weight VMS solution whereby hospitals place open positions online and staffing agencies respond by submitting candidates.

I've watched Medefis for several years and have always thought their model was interesting. I believe it has several pluses and minuses:

The pluses:

• Light weight solution requires little to no training
• Quick process for sign up and adoption
• Low overhead and little maintenance for the application

The minuses:

• Many staffing agencies complain about the model because there are no set rates and they have to bid on each position.
• Staffing agencies are billed directly by Medefis and there are many complications around the billing. For example: Medefis charges the bill rate (x) the number of weeks in the assignment. Call off and cancellation issues cause a lot of confusion when it's time for billing.
• When a hospital uses Medefis it's not the entire hospital. A single unit manager could be using Medefis. This reduces the value to the staffing agencies as well as the hospital and complicates things for everyone by introducing multiple systems.
• The Medefis system lacks several features such as credential screening and compliance. Recently they added time keeping an billing to their application as separate services but it's unclear how this is working. I have yet to find anyone using the features.

It's been an interesting year for healthcare vendor management companies. Some vendor management companies have declared bankruptcy while others have been suffering through major financial issues. It will be interesting to see how this acquisition plays out for Medefis and their model.

You can read the full article on the Medefis acquisition on their web site.

Comments

[Kevin]

since Onward healthcare purchased medefis does this still make them vendor neutral?

[Jason Lander]

Wow. I had not made the connection with Welsh, Carson, Anderson & Stowe to Onward Healthcare. Thanks for the information.

The answer is no. If a VMS is owned by a staffing agency it is not a vendor. This staffing agency will have access to the data and position its self to fill the majority of the orders first. This is not neutrality.

[Caleb English]

Has anyone come forward with issues concerning Medefis and Onward Healthcare? I was made aware of a nurse being submitted to a position through Medefis and then being contacted by Onward the next day for the same position.

[Jason Lander]

I have heard similar things. It's unfortunate that this is happening. People definitely need to speak up and out about it. Medefis has attempted to keep their connection with Onward quiet but the lack of transparency only creates distrust and further hurts the reputation of the industry.

[Caleb English]

Thanks for the feedback Jason. We will definitely do what we can to let others know about this. It really hurts ones odds when the house is playing with loaded dice.