Vendor Neutral Healthcare VMS Not So Neutral Anymore

A couple of weeks ago I blogged about the recent acquisition of the healthcare vendor management company Medefis by the private equity group Welsh, Carson, Anderson and Stowe. What I didn't realize is that this private equity group also owns a very large healthcare staffing company called Onward Healthcare.

This definitely changes the game for Medefis and the companies working with them. Being owned by a staffing agency or a company that owns staffing agencies definitely negates your vendor neutrality. This private equity company, as well as Onward Healthcare  will now have access to all the data within Medefis including bill rates, pay rates, job order and candidate data.

What does this really mean? Keeping the new ownership ties between Medefis and Onward Healthcare quiet was probably wise. Most likely if they're smart, Medefis will continue to bill themselves as being vendor neutral. However, the acquisition will also provide a huge benefit to Onward Healthcare in terms of being promoted to hospitals, as well as increased access to job requisitions and candidate profiles.

This isn't necessarily bad for the hospitals, depending on how much distance exists between them and Onward Healthcare and as long as they continue to get their needs met by quality, cost effective staff. The biggest losers are the staffing agencies that entered into a relationship with Medefis under the guise of vendor neutrality. Staffing agencies typically participate with vendor neutral companies more than working through a MSP delivered by one of their competitiors because they have equal chance at filling requisitions, and the company won't be attempting to recruit their staff with the data they have in the system. What happens when this all changes?

I guess we're about to find out.

Comments

[Brad Garrett]

This partnership is for Profit! It's not vendor neutral..... Why send renewal (fee) to Medefis for 2010?

http://allaboutfrogs.org/stories/scorpion.html

Who's the FROG? Who's the Scorpion?

[Ken Steve]

I was a V.P. for Onward and know they will take every opportunity to own every job posted on Medefis. If you are in the healthcare staffing business I suggest you start selling against Medefis immediately. A couple points I would bring up is that they will drive pricing up to the hospitals to promote Onward Nurses who may have received or have been accustomed to higher pay. The second point is that they have poor leadership on the account services side and they will push under qualified staff and push the rules for each posting to place an Onward nurse.

By the way; this is not the first effort to buy Medefis. They have been after them for at least three years So Kevin must have talked with Scott and the crew at Welsh to buy them this time around to avoid the "vendor neutral" selling points.

[Jason Lander]

Thanks for the information Ken.

[Cindy]

WOW!! I'm A VP for a national travel and perdiem firm. We deal with Medefis on a daily basis. Thanks for the insight Ken!

Cindy

[Jason Lander]

Glad the info was helpful Cindy.