Background

A non-profit psychiatric hospital in the Northeast needed to take action after facing ongoing challenges in maintaining an adequate and cost-effect workforce. As a major healthcare provider in the region, offering comprehensive mental healthcare for decades, the hospital relied heavily on staffing agencies to fill workforce gaps, leading to high costs and a transient staff. To address these issues, the hospital partnered with AHSA, a leader in healthcare staffing solutions, to develop and implement strategies aimed at reducing reliance on temporary staff and building a more stable, cost effective core workforce.

Challenges

Reliance on staffing agencies posed several challenges:

• High Costs: The rates for traveler placements were significantly above national averages, leading to inflated operational costs.
• Workforce Instability: A high turnover of temporary staff created continuity issues in patient care and administrative operations.
• Dependence on Overtime: Regular use of 36-hour contracts with costly overtime further exacerbated financial strains.
• Geographic Constraints: The need to source staff from distant locations added logistical and financial burdens.

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Key Strategies Implemented

In early 2024, under new leadership, the hospital and AHSA implemented a series of targeted strategies to address these challenges:

1. Rate Reduction Initiatives: AHSA negotiated lower rates for traveler placements, aligning more closely with national averages. This effort was critical in reducing the overall staffing expenditure and making traveler placements more economically viable.
2. 30-Mile Radius Policy: A new policy allowing travelers to live within 35 miles of the hospital enabled it to collect a 10% discount on the bill rate of contract employees that lived within the radius, further driving cost-effectiveness.
3. Optimized Contract Structures: The introduction of 48-hour contracts allowed the hospital to backfill traveler extensions at lower rates, effectively removing the costly overtime associated with 36-hour contracts. This strategy ensured that the hospital could maintain necessary staffing levels without incurring additional financial burdens.
4. On-Site Housing Management: To further support its workforce, the hospital passed management of on-site housing for agency clinicians to AHSA. This initiative streamlined housing logistics, reduced costs associated with accommodation, and provided a seamless experience for traveling staff, enhancing overall job satisfaction and engagement.

Impact

The implementation of these strategies yielded substantial results:

• Reduction in Traveler Placements: The hospital experienced a 55% decrease in the number of new traveler placements from Q1 to Q2 of 2024. This reduction significantly lessened the hospital’s dependency on temporary staffing solutions, fostering a more stable and committed workforce.
• Cost Savings: By introducing 48-hour contracts as standard, the hospital saved an estimated $671,060 in the first half of 2024 on overtime rates. Additionally, it saved an estimated $87,906 in hourly rates at the time of traveler extensions, surpassing an estimated $758,000 in savings through the AHSA program from January through June 2024.
• Enhanced Workforce Stability: By prioritizing local providers and optimizing contract structures, the hospital began building a more stable core workforce. This stability translated into improved continuity of care for patients and a more cohesive work environment for staff.
• Improved Staff Satisfaction: The management of on-site housing and the introduction of more flexible contract options contributed to higher job satisfaction among staff. Content and well-supported employees are more likely to remain with the organization, reducing turnover rates and fostering a positive workplace culture.

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Conclusion

The partnership between AHSA and the hospital, strengthened by the strategic vision of new leadership, has been instrumental in transforming the hospital’s staffing approach. The hospital has successfully reduced its reliance on traveler placements and achieved significant cost savings through targeted strategies such as rate reduction initiatives, optimized contract structures, a mandatory 35-mile radius policy, and enhanced on-site housing management. The resulting improvements in workforce stability and job satisfaction are a testament to the effectiveness of this collaborative effort. AHSA’s dedicated partnership continues to be a cornerstone in the ongoing success and operational health of the hospital, ensuring that it can fulfill its mission of providing exceptional mental healthcare to the community.

To see how partnering with AHSA can help reduce your contingent workforce spend, contact us today!