Should Hospitals Focus on Eliminating Their Agency Staff?

It's a question that never seems to go away. Can hospitals truly eliminate all of their agency usage? Perhaps a better question is - should they? From a management perspective, the healthcare staffing industry seems to be one of the last to see the usage of temporary labor as being negative.

By now we've all read the L.A. Times article that highlighted some bad practices of a few staffing agencies and used these examples to paint the entire industry with more negative stereotypes.

The American Staffing Association had a great response to the article that was necessary and expected. What was nice to see, however, is people like Rebecca Hendren from Healthleaders Media who has written a couple of excellent articles on how hospitals can better manage staffing agency professionals. In her first article Rebecca discussed how positive work environments and better orientation practices can improve the process for working with agency staff.

This week, Rebecca wrote another article about how hospitals are making effective use of technology to reduce their reliance on agency staff. She points out hospitals that have effectively deployed internal staff scheduling software to fill more shifts with internal staff, offer more scheduling flexibility and improve morale. The Healthleaders Media article made several great points on this topic and I wanted to add a few of my own.

1. It's no secret that scheduling software applications can dramatically improve a hospital's staffing situation. However, software won't solve the nursing shortage. It bothers me to say that. I'm a huge believer in technology but sadly, it will not solve all of our problems. Even though the economy has given us the illusion that the shortage of healthcare professionals has decreased, this is only a temporary situation (no pun intended). All analysis suggests the shortage will only continue to get worse. According to the Bureau of Labor, at 23%, the demand for nursing will be much greater than the average for all other occupations between 2006 and 2016. So no matter how efficient the software, if there's no staff to manage - there's no staff - and working with temporary labor is still necessary.
2. Deploying a solution to better manage your internal staff while ignoring the management of staffing agencies won't solve your hospital's staffing problem. Hospitals need a solution that will manage all of their staffing - both permanent and temporary.
3. The article includes some popular generalizations about the use of healthcare agency staff such as: using agency requires more organization and effort and that it "can sometimes lead to resentment among the permanent staff, who question why their hospital is willing to pay twice as much to agency nurses to fill open shifts as it pays to its own loyal staff."

Healthcare Vendor Management Systems ensure that the process for managing agency staff is simple and effective. Implementing such a system means that the same, if not less, effort than managing internal staff is required. In addition, nurses do not get paid 2x as much if they work for an agency. The mark up on pay rates to agency staff does not equate to being 2x the cost of internal staff (especially if you factor in other benefits for internal staff) and this money is not all paid to the nurse. Further, there is an implication in this statement that the mark up is unnecessary. The mark up exists to provide quality staff, often under short notice and goes to cover the business costs of properly recruiting, screening, hiring and placing these professionals.

The solution is to more effectively utilize staffing agencies - not work toward eliminating them. Attempting to eliminate agencies can actually end up being more costly to hospitals in the long run due to increased staff overtime, burnout/turnover and higher management costs due to a lack of efficient processes if/when using agency staff is necessary. Additionally, until the nursing shortage is over it's not feasible for every hospital to fully eliminate their agency usage. Therefore, a better goal is to focus on more effective agency management - not elimination.

In the past I've written about several reasons to use agency staff so I won't repeat myself here. I'll only close by saying that focusing on things such as improved orientation, better credential compliance management and process automation with a comprehensive workforce management system is a more effective solution for hospitals in regard to addressing their concerns with agency staff.

Comments

[Brad Garrett]

The hospitals need travel RN's, the travel RN's need the Agency's, VM need the Hospitals, & the Agency's, Agency's need VM & Travel Nurses & Hospitals..... Who's going to bring all four groups to the party?

Bradley M. Garrett, COO & Founder
brad@tghealthcare.com
Toll Free 866-696-8559
Cell 402-708-4787
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[Jeff Long]

Nice post Jason. I have a lot of posts about this topic too. I really took away from it the perspective that if hospitals accept temporary staffing as part of their staffing plans and actually build plans to handle it properly they would see it a lot differently. However, If they treat using them with an attitude of indifference or worse then that will be the approach they will take when using them and that will translate to a bad experience for them and the traveler.

[Jason Lander]

Thanks Jeff. Yes, still after all these years, it's an uphill battle trying to get hospitals to understand the value of working with healthcare staffing agencies. Hopefully that will change.

[Vince Trang]

I regularly interact with nurse leaders and have mix feelings about contract labor. Some believe that having contract labor creates a negative dynamic in the workplace while other LOVE their travelers saying they are some of their best and most experienced staff, and would never get rid of them. I think the happy medium is trying to optimize the use of your internal staff and use/manage contract labor when necessary. Nursing shortages are not going anywhere... therefore we just need to optimize.

[Jason Lander]

Agreed. I think maintaining a healthy balance - working with staffing agencies when it can be beneficial and not overdoing it - is the best approach.