How Norman Regional Health System chose the right workforce solutions partner & developed an overall strategy to reduce agency reliance & spend

Authors

Corb, Jheri, MS, EPc, CES - V.P. of Client Success Onboarding/Implementation, AHSA

McGill, Brittni, MSN, CCRN - Chief Nursing Officer, Human Resources, Nursing, Norman Regional Health System

Minnis, Keith, SPHR, SHRM-SCP - V.P. and Chief People Officer, Human Resources, Nursing, Norman Regional Health System

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In contemporary workforce management, reliance on staffing agencies has become a common strategy to meet fluctuating demands and address skill shortages. However, this approach often increases costs, reduces workforce stability, and diminishes organizational control.

This paper proposes an optimal workforce solution design to minimize reliance on staffing agencies while enhancing operational efficiency and flexibility. This paper highlights the integration of advanced workforce analytics, predictive modeling techniques, and strategic workforce planning principles to optimize internal talent utilization. By leveraging historical data, real-time workforce dynamics, and business forecasts, organizations can identify opportunities for internal talent development, deployment, and retention. Additionally, the solution facilitates proactive workforce planning, enabling organizations to anticipate future skill requirements and strategically invest in talent acquisition and development initiatives.

Through case study analysis and simulation exercises, we demonstrate the effectiveness of the proposed solution in reducing reliance on staffing agencies while maintaining workforce flexibility and cost competitiveness. Objective Norman Regional Health System wanted a workforce solutions partner to partner with and develop an overall strategy to reduce agency reliance and spending.

Objective

Norman Regional Health System wanted a workforce solutions partner to partner with and develop an overall strategy to reduce agency reliance and spending.

Background

Due to the lack of experience working with agencies, NRHS’s leadership requested that all department leaders contact different agencies in various specialties. There were no standardized contract templates, terms, or bill rates for the disciplines in this market. The results were inconsistent invoices, conditions of contracts, numerous communication channels, varying degrees of quality of clinicians and vendors, gaps in compliance paperwork, and lack of transparency to the Health System stakeholders.

With the volatile labor market and continued bidding war in the market, growing concern about agency spending, and reliance on contract labor, the Chief Nursing Officer (CNO) researched workforce solutions that would fit the needs of the organization and assist in reaching the overall goal of reducing and eliminating agency. She sought advice from a trusted partner in the industry and, after several discussions, demos, and meetings, decided to partner with a company that would implement a Managed Service Provider (MSP) program while utilizing their proprietary technology to streamline the entire procurement process from job requisition to billing/invoicing for NRHS.

Methods

1) Strategy Sessions with AHSA

AHSA presented an onsite consultation to NRHS, outlining how their consultative approach would benefit the hospital and help it become travel agency-free. AHSA proposed a phased approach to execute the MSP program and streamline the procurement process. This included implementing their proprietary vendor management system (VMS), Trio, which would provide standardized bill rates, communication, confirmation letters, and invoice management. The compliance piece was also addressed, ensuring all regulatory and accreditation requirements were met.

During NRHS’s initial onboarding process with AHSA, the CNO took the initiative to discuss in-depth with all department leaders what an MSP is and what it would do for the hospital. This included explaining the benefits of partnering with AHSA as the chosen MSP and how it would streamline the healthcare staffing process.

The CNO gained buy-in from leadership and partnered with the Chief People Officer, Human Resources, and recruitment, ensuring everyone was on board with the decision to bring on an MSP. This helped create a collaborative approach to onboarding and guarantee that everyone was prepared for the initial call with AHSA.

Leaders asked questions during the initial team meeting with al stakeholders involved in this new MSP program. They provided essential details about their current travel agency and per diem staffing processes. This included discussing confirmation letters, data, and bill rates while providing agency contact information to ensure an efficient transition into this central staffing program. AHSA was able to take this information and develop a phased approach that was easy to follow, incorporating the hospital’s specific needs and requirements. A timeline visual was created to outline the different phases of the onboarding process. This included agency and internal processes for direct hire, adding AHSA’s direct hire program, and implementing compliance efficiencies for travel agency and per diem staffing. Visual process flow maps were also created to provide a clear overview of the timeline and helped to set expectations for the implementation process. As part of the business process transformation, internal communication processes were improved and added to ensure seamless collaboration between the hospital and AHSA. Weekly calls were scheduled with AHSA, nursing leadership, human resources, and recruitment to discuss progress and address any questions or concerns related to per diem, agency, and direct hire staffing. An agenda was created to cover all topics during weekly calls, maximizing efficiency and productivity.

Efficiency lists were also created for compliance requirements, so all necessary steps were taken to meet compliance standards. This included streamlining the documentation and verification process for agencies and per diem staffing, reducing administrative burdens and potential compliance risks.

A timeline visual was created to outline the different phases of the onboarding process. This included agency and internal processes for direct hire, adding AHSA’s direct hire program, and implementing compliance efficiencies for travel agency and per diem staffing. Visual process flow maps were also created to provide a clear overview of the timeline and helped to set expectations for the implementation process. As part of the business process transformation, internal communication processes were improved and added to ensure seamless collaboration between the hospital and AHSA. Weekly calls were scheduled with AHSA, nursing leadership, human resources, and recruitment to discuss progress and address any questions or concerns related to per diem, agency, and direct hire staffing. An agenda was created to cover all topics during weekly calls, maximizing efficiency and productivity.

Efficiency lists were also created for compliance requirements, so all necessary steps were taken to meet compliance standards. This included streamlining the documentation and verification process for agencies and per diem staffing, reducing administrative burdens and potential compliance risks.

2) Successful Onboarding

Through AHSA’s collaborative approach, NRHS was able to successfully onboard its MSP program within the timeframe established and agreed upon by both parties.

The CNO and other department leaders no longer had to individually contact agencies or manage communication, confirmation letters, and invoices. Giving precious time back to the managers was a needed success. The standardized bill rates and streamlined procurement process provided consistent staffing efficiency while meeting compliance requirements. As a result, NRHS reduced its reliance on travel agencies and per diem staffing, moving towards its goal of becoming altogether travel agency-free.

Overall, the onboarding process with AHSA at NRHS was successful due to thorough preparation, clear communication, and a collaborative approach. Lessons learned from this process were incorporated, leading to improved efficiencies and streamlined healthcare staffing.

3) NRHS’ One-Year Plan

NRHS has been proactively optimizing healthcare staffing processes and reducing reliance on agencies. In doing so, they will have a comprehensive overview of the progress made over a one-year period, demonstrating significant improvements in business process transformation. During onboarding, AHSA worked with the hospital to develop a strategic implementation plan.

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Ownership and Shared Responsibility

One of the key factors in achieving success in reducing agency usage is the ownership and shared responsibility of the staffing process. Talent acquisition (TA) and human resources (HR) need to actively participate and take ownership, making it a shared problem rather than just a nursing problem. This involves close collaboration between TA, HR, and nursing leaders. Weekly huddles between clinical leadership, HR, TA, and AHSA were established to ensure all parties were updated with the latest information, dots were connected, and gaps were closed.

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Data-Driven Approach

NRHS has been leveraging a data-driven approach to monitor and analyze staffing data. By closely examining data related to agency usage, contract labor spending, and staffing needs, the hospital has identified improvement areas and made informed decisions. The numbers reflect the overall reduction in temporary agency usage and total contract labor spending as direct hire placements and per diem staffing were implemented, comparing 2022 to 2023. (Table 1 and Table 2 included)

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Implementation of External Per Diem Staffing

NRHS implemented a per diem staffing program to reduce expenses associated with travel agency usage. This involved creating an external pool of per-dem staff who could be utilized across different departments based on patient volume and acuity. By having a flexible additional resource pool, the hospital reduced its dependency on agencies and optimized staffing levels while achieving cost savings.

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Reductions in Travel Agency Usage and Contract Labor Spending

As the timeline progressed, the data revealed a significant reduction in agency usage and contract labor spending. AHSA was able to guide NRHS on renewal rates based on market intel. The standardization of guaranteed shifts, overtime, and call-back rates also helped to decrease spending. Implementing direct hire placements, per diem staffing, and an external float pool contributed to these reductions. The hospital achieved cost savings while maintaining appropriate staffing levels to meet patient needs.

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Orientation and Department Education

To ensure the smooth implementation of direct hire placements and per diem staffing, NRHS provided orientation and department education to new clinicians. Training then extended to leadership as staffing utilization levels and triggers were established. This helped in streamlining the staffing process and ensuring adherence to established protocols.

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Development of Internal Triggers

Another key strategy implemented by the hospital was the development of internal triggers for activating agency resources. This involved setting up specific criteria or thresholds that would trigger the need for temporary or direct hire staffing. By defining clear triggers, the hospital was able to proactively manage staffing needs and minimize delays in securing appropriate staffing resources.

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‍Lean Six Sigma and HR Involvement

NRHS recognized the importance of Lean Six Sigma principles in improving operational efficiency. HR involvement was also critical in streamlining the staffing process. The hospital focused on Lean Six Sigma methodologies and actively involved HR in the staffing process. This helped in identifying bottlenecks, eliminating waste, and implementing process improvements, resulting in optimized staffing processes and reduced reliance on agencies.

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‍Best Practices and Resolutions

Throughout this process, NRHS adopted best practices and resolutions to achieve their staffing goals while reducing the reliance on agency and decreased overall spend. These included the implementation of direct hire placements, per diem staffing, and development of internal triggers for activating agencies. This overall approach resulted in approximately $10MM in expense reduction from 2022 to 2023 in travel agency spending and a fiscally responsible strategic approach to agency utilization and processes.

Conclusion

Our findings indicate significant cost savings, improved workforce stability, and enhanced organizational agility by adopting the optimal workforce solution design. This paper provides valuable insights for organizations seeking to reduce staffing travel agency utilization and achieve a more sustainable and efficient workforce management strategy. By embracing data-driven approaches and strategic workforce planning principles, organizations can optimize internal talent utilization, mitigate reliance on external staffing agencies, and enhance overall business performance.

Total Travel Agency

Spend 2022

$15,398,606

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Total Travel Agency

Spend 2023

$5,766,023