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Five Ways to Tame the Contract Labor Beast

01/04/17

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Melanie Bell, MSN, RN, CNEP, Senior Workforce Director

In December 2014, the U.S. Department of Health and Human Services released a study stating that by 2025 the supply of registered nurses would outpace the demand by approximately 240,000 full-time equivalents. Regardless of your opinion of this analysis, I think we can all agree that as we kick off 2017, we are in the midst of a nurse staffing shortage.

Hospitals all over the country are experiencing the challenge of retaining enough registered nurses to provide quality care. In today’s reimbursement structure, this can result in financial penalties far greater than any labor savings that it may generate. As a result, many health care facilities, both inpatient and outpatient, have started to rely heavily on contract labor to supplement their employed staff.

Utilization of contract labor, however, comes with its own unique set of challenges. Here are some suggestions to help tackle these issues and tame the contract labor beast at your facility.

1. Staffing certification. One of the biggest hurdles with contract labor, especially in health care, is ensuring that all of the staff is credentialed and compliant. Because you rely on the staffing firm to verify data like background checks, immunization records, licensing and certifications, it is essential that you work with firms that are Joint Commission-certified for health care staffing services. The Joint Commission’s Health Care Staffing Services Certification program provides an independent, comprehensive evaluation of a staffing firm’s ability to provide qualified and competent staffing services. Vendors with this designation are held to the same strict standards regarding personnel records as health care organizations.

2. Expedited screening process. Another obstacle facilities face is simply acquiring qualified candidates for open contract labor needs. One of the key factors in maintaining a steady stream of profiles is a consistent quick screening and decision-making process that is completed within two business days. Almost every hospital in the country is scrambling to fill staffing needs right now, so grab your top choices while they are available.

According to Chris Trudell, senior manager for client delivery at Emerald Health Services in El Segundo, California, vendors are more likely to send candidates to a hiring manager who they know will make a quick decision. “Quickly moving hospitals have been able to secure higher-quality nurse travelers, in a shorter period of time, by putting instant focus on candidate submissions. Nurses are much more likely to accept when interviewed and offered a position within 48 hours of submitting their information. Moving quickly to interview and offer is a major benefit to all parties involved. It improves the workflow process and allows the hospital to focus more time on other work endeavors.”

3. Budget reporting. Nothing is worse than patting yourself on the back when your productivity for the month is good, only to find out later that you are deeply “in the red” due to contract labor that was not included. Work with your finance department to incorporate contract labor hours into your regular productivity reporting. As tempting as it may be to enjoy that brief victory, it is not worth the impact to your consolidated budget!

4. Vendor-neutral contract labor management. A key frustration associated with contract labor is the many different contacts, agreements, rates and contract terms you may be juggling on a daily basis to get the staff you need. Vendor-neutral contract labor management provides a solution to this headache. This service consolidates all of your vendors onto standardized terms and rates by partnering with the member to define a customized vendor panel that meets your staffing needs. On top of that, these services monitor conditions in your region and across the country to guide decisions around rate adjustments, provide best-practice processes, and make suggestions on how to best forecast your future needs.

Vendor-neutral services are not an agency themselves or owned by an agency, so they can truly negotiate on the member’s behalf without a conflict of interest, including expertise in contract language that prevents unapproved excess time created by staff arriving early or leaving late. An extra 15 minutes a day can quickly cost thousands of dollars. Other contract language includes indemnification, financial penalties for cancellations and no-shows, and no cost hiring.

5. Contract labor management technology. This technology tracks procurement, candidate submission, compliance and utilization. I know, I know … the last thing we ever want to hear in health care is the “t” word, but in this case a health care-focused system is going to save you time and worry. Imagine streamlining all of those phone calls, emails, profiles and paper timesheets into a single source of truth. Imagine how having all of the information regarding contract labor assignments and resources in a single system that can provide visibility and reporting is going to help with all of the challenges above.

By following these tips, you can stop allowing contract labor to run wild in your facility and take action to tame the beast.

Learn how Vizient offers proven technology and services to optimize labor in your hospitals and across your network.

About the author. Melanie Bell is an experienced nursing administrator with a background in labor and process optimization in the acute care setting. Prior to her career as a registered nurse, she was a business and financial analyst, working as a liaison between finance and IT. Utilizing her unique experience in the clinical and business settings, Bell has managed nursing operations through rapid expansion and new facility openings. In her current role, she leads technology and operations for Vizient’s Workforce Optimization team and is responsible for Contract Labor Optimizer.

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