Solidified staffing yields 6.9 million in savings

Large  health systems and  complex labor  issues often go hand in hand. This particular large health system struggled with aligning staffing ratios with fluctuating patient volume.

To ensure sufficient staff were available to deliver quality patient care, the organization was spending millions of dollars for contract  registered  nurse (RN) specialty nurses, licensed practical nurses (LPNs), certified nursing assistants (CNAs), surgical technicians, and a range of allied positions in cardiology, pharmacy, laboratory, radiology, and more.

The health system used numerous staffing agencies, each with its own terms and rates. This variation in contracts resulted in overpayment for services, lack of standardized service level requirements, difficulty  tracking costs, and  lack of vendor contract  compliance — not to mention the administrative burden on the organization to manage all of this.

The organization knew it could increase efficiency and  achieve significant savings by improving how contracts were structured and managed. But administrators also knew they needed guidance from  staffing experts with access to actionable data.

Building on a successful relationship spanning many years, the health system called on Vizient  to bring  clarity to the complex staffing and  labor process. The organization’s specific goals were to:

• Identify and  deploy the right staff for the right shift  at the right time
• Standardize one rate and set of terms and conditions for all vendors
• Improve productivity and patient care
• Maintain required staffing levels
• Reduce contract labor expenses
• Reduce liability  risks

Vizient applied a multidimensional approach to the health system’s persistent staffing challenges.

Knowledgeable advisers

Vizient first sent in a team of expert sourcing specialists that rigorously evaluated the member’s market rates, rationalized  contracted  rates by market, and tailored the best vendors for the member’s unique staffing needs. For the first  time, standardized contracts and  stringent service-level requirements were established across all vendors to provide maximum protection for the health system and its patients.

Proprietary procurement technology

To optimize contract staffing procurement, Vizient  implemented its proprietary, web-based technology used by nearly 80 health systems across the country.

It provides access to nearly 600 contracted staffing vendors. These vendors represent more than 90 percent of clinical staffing nationwide, including 94 percent of all agency-registered nurses. This technology provided the organization with online  staff procurement, credentials capture, labor time tracking, and quality management.

These system automated functions help streamline the staffing process:

• Online job procurement from any location with a secure Internet connection, generating job requests only to contracted agencies
• Availability  of contract terms and rates and  individual staff information, including credentials for nursing, allied, and nonclinical staff
• Invoice and contract employee time tracking, including holiday and overtime pay
• Direct interface with contemporary accounts payable systems

Using the system guaranteed that temporary staff was only procured from contracted vendors, eliminating off-contract spend. It also gave the health system the ability to manage vendor invoices and payments. This effectively eliminated manual reconciliation, creating reverse invoicing and putting the responsibility of reconciliation on the vendor agency. Additionally, the system assures high levels of compliance with contract terms and tracking to enforce service-level penalties with vendors.

The Workforce Optimization market management team

The Vizient market management team provided individualized account management, advising leadership throughout the onboarding process and ensuring vendor compliance. This team took on a number of essential roles:

• Shared staffing best practices from  across the country and  recommended strategies to meet labor needs
• Facilitated technology deployment and  the development of standardized processes
• Teamed with sourcing specialists on vendor agency negotiations and helped realize significant savings through high contract compliance
• Served as a liaison between the health system  and vendor agencies to achieve enterprisewide adoption
• Provided system-level and  facility-level consultation and coaching throughout program adoption, rollout  and on an ongoing basis
• Managed vendor agency audits annually and on an ad hoc basis, and enforced rigorous vendor service-level agreements and credentialing requirements

Working with Vizient, the health system completely transformed a disjointed contract staffing process into  an efficiently managed system that saved $6.9  million in labor  expense. Other achievements include:

• Decreased cardiac catheterization lab rates by $7 an hour
• Achieved 96% overall contract compliance
• Achieved 99% nursing contract compliance

Going on eight years of partnership with the Vizient Workforce Optimization team, the customer is driving even greater efficiencies through the adoption of nonclinical staffing contracts to provide staff for administration, accounting and  finance, human resources, health information systems, and  information technology.

The health system’s vice president of supply chain says the future holds even more progress. “We achieved a majority of what we can do on savings. Now we are partnering with Vizient  Workforce Optimization on process flow and optimization.”