Contingent Staffing Helps Cope with ACA Repeal Confusion

ACA Confusion Solution

The healthcare industry in the United States has experienced phenomenal employment expansion since the recession. In fact, 35% of the nation’s job growth has been in healthcare, and the industry now employs one in nine Americans.

However, continuing confusion over the future of the Affordable Care Act (ACA) may make healthcare executives uneasy about adding FTEs, even though demand for services continues to rise.

Labor is the healthcare industry’s biggest single expenditure, accounting for more than half of the operating budgets of hospitals and other healthcare facilities. Healthcare providers can address labor costs and provide flexibility in their operating budgets by working with contingent staffing.

Demand Continues to Outstrip Supply

The demand for healthcare services in this country continues unabated, driven by demographic and economic trends. The U.S. population is growing steadily older, with the number of people over 65 more than doubling from 2010 to 2050, increasing by nearly 50 million, according to the US Department of Health and Human Services. Older people are much greater consumers of healthcare services. People over 65 experience three times more hospital days than the general public, while those over 75 have four times more care days, according to the U.S. Centers for Disease Control.

Meanwhile, our growing economy means more people have jobs with insurance, and more resources for deductibles and copays. Total U.S. employment is projected to rise by more than 10 million jobs from 2014 to 2024, according to the U.S. Bureau of Labor Statistics. Many of those new jobs will come with healthcare benefits, while others will provide some resources to pay for healthcare costs.

Available clinical staff is unable to keep pace with demand. The Health Resources and Services Administration projects that more than 1 million registered nurses will reach retirement age within the next 10 to 15 years, while the Bureau of Labor Statistics estimates that 1.2 million vacancies will emerge for registered nurses between 2014 and 2022. Physician shortages are long-standing and severe, with shortfall estimates ranging from 40,800 to 104,900 by 2030. Demand for allied health professionals such as physical and occupational therapists is also outstripping supply.

In April, the US Bureau of Labor Statistics tallied nearly 1.1 million healthcare job openings but only about half that number of hires in the same month. This gap of unfilled healthcare jobs has been growing steadily since the end of the recession.

Contingent Labor Provides Budget Relief, Flexibility

Healthcare executives are caught between rising demand for services and uncertainty about how healthcare policy changes in Washington will impact the industry. This can throw a wrench into planning for the biggest expenditure in operating budgets – staffing.

In such an environment, organizations have recognized the value of contingent staffing to meet their needs. There has been an upward trend since the recession contingent staffing, which experienced 13% revenue growth in 2016 and is predicted to grow an additional 6% in 2017, according to research by Staffing Industry Analysts.

Healthcare executives are finding that the flexibility of contingent staffing is an advantage in budget planning in uncertain times. It also helps simplify healthcare management in an era when leaders find themselves burdened with complexities.

Contingent staffing in healthcare now includes a variety of service types, including direct staffing for travel, per diem, locum tenens and allied health; technology-only vendor management systems (VMS); and comprehensive Managed Services Programs. Case studies of MSPs offered by AMN Healthcare, the nation’s leading provider of healthcare MSPs and other workforce solutions, have shown significant results. AMN MSP clients have realized annual savings of up to 15%, fill rates improved by as much as 30%, reduced overtime, and improved candidate quality.

A commonly held belief that contingent staffing is more expensive than core staffing is now in question. Many of the “hidden” costs for core staffing -- such as employer portion of payroll taxes and benefits, other HR functions, orientation and education hours, leaves of absence, and a variety of causes of nonproductive time – are covered by the contingent staffing company. Since contingent healthcare professionals arrive at assignments immediately ready for work, healthcare organizations avoid many of the complexities of preparing staff for clinical duties.

Recent research by AMN Healthcare that tallies the hidden costs of core staff nursing a busy hospital in the South showed that the costs for travel nurses was consistently and significantly lower than the costs for core staff nurses.

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