The Changing Role of MSPs to Manage Contingent Healthcare Workforce

September 14, 2022
The Trusted Works Team

In recent years, hospitals have increasingly relied on managed service providers (MSPs) to help navigate staffing woes. The difficult healthcare labor market—made worse by COVID-19—drove many organizations to depend on contingent staffing firms to fill coverage gaps. MSP’s provider networks and processes appeal to overworked administrative teams juggling sourcing, recruiting, and onboarding temporary staff. MSPs have been a useful alternative to pouring internal resources into the time-intensive tasks of staff planning, recruiting, and hiring. They offered a lifeline during crisis, providing available and qualified clinical staff in a pinch. However, reliance on MSPs as the sole provider of contingent help is evolving. The advent of more flexible staffing options and technological solutions have inspired many organizations to become their own MSP.  

In this blog post, we’ll explore how MSP’s roles are changing and how recent advances in technology are empowering hospitals and health systems to start building the competencies and structures needed to bring contingent workforce staffing back in-house.

The Benefits of Using MSPs to Manage your Contingent Workforce

Historically, healthcare leaders have used MSPs to tap into a solid, available pipeline of contingency clinicians to cover staffing gaps. Beyond the simple fact that MSPs offer access to providers in a time where demand for quality clinicians often exceeds supply (about 20% of hospitals are critically understaffed)—MSPs also promise an efficient, legally compliant process for everything from recruiting and credentialing to contracting and onboarding. These services—though costly—provide great value to hospitals trying to do more with less internal resources. While they are not the only option for managing a contingent workforce, hospitals appreciate that MSPs offer:

Domain expertise

MSPs offer immediate domain expertise on specialized staffing tasks such as sourcing, recruiting, interviewing, hiring, onboarding, vendor management, billing/paying, and maintaining compliance for external labor. With those tasks addressed, a hospital’s staff can focus primarily on internal initiatives to support permanent staff.

Relationship management

Additionally, MSPs are effective at managing relationships with multiple travel nurse staffing agencies. With MSPs, hospital staff can manage several agencies with a single point of contact. This streamlines the process of leveraging a variety of agencies to fill multiple, often short-term, positions on different units and in various facilities. As a result, MSPs reduce management headaches and backlogs that internal resources do not have the bandwidth to efficiently manage.

How MSP Roles are Changing

As technology adoption accelerates in healthcare, new options emerge for more cost-effective, time-efficient contingent workforce management. Healthcare organizations are more motivated than ever to take staff management in-house, as the costs of using external agencies soared during the pandemic—and remain higher than pre-pandemic rates. Rather than relying on external organizations to manage contingent clinicians, healthcare leaders are turning to technology to simplify the complex process of building an internal contingent workforce pipeline. Hospitals equipped with the right tools have the power to own their own continent labor database and streamline the process of planning for, finding, and using temporary—or more flexible—labor.  

The driving force behind this shift has a lot to do with an industry-wide push to innovate. In the wake of the pandemic many hospitals are reorienting around larger innovation goals, and technology plays a significant role in achieving those objectives. Healthcare leaders know current staffing models are breaking and are focused on evolving to build a more sustainable workforce. Beyond that, they are hungry to harness the vast amounts of data now available to healthcare leaders to drive value for their organizations.  

Ultimately, technology advances eliminate many of the common needs for an external MSP (like lack of data to accurately forecast hiring needs, minimal visibility into available workforce, and little bandwidth and processes to deal with hiring and managing contingent labor). Increasingly, technology distills valuable data, automates processes MSPs typically handle, and gives healthcare hiring managers a more holistic view of available resources. This shift empowers innovative hospitals to turn inward to manage their contingent workforce.  

Why are Some Hospitals Moving from MSPs to Internal Management?

With internal management now a viable option (thanks to tech), healthcare leaders are starting to see significant benefits from relying more on their internal candidate pool and less on MSPs. These are just a few of the ways a self-managed solution can reduce the challenges of contingent healthcare MSPs.

Cost savings

As with any service, facilities pay a premium for utilizing a MSP. Whether this cost is translated directly to the facility, through a percentage of the bill rate (and thus transferred to the travel nurse staffing agencies), or both, using an MSP ultimately makes it more expensive for hospitals to attract and engage highly qualified candidates. Though implementing the technology and structures necessary to handle these processes internally will also require expenditures, this option will be more cost-effective long-term. Think: renting an apartment (paying MSP) versus buying a house (investing in an internal agency).

Reduced friction

While MSPs can lessen burden, they can also slow down processes and add unnecessary steps to common processes (hiring, onboarding, payment, etc.). For instance, travel nurse staffing agencies are often prohibited from communicating with the facility directly and have to make contact through the MSP. By taking these tasks internal, provider organizations can cut out the ‘middle man,’ streamlining both communications and operations.

Increased control

Utilizing an MSP means relying on a third party’s pool of candidates and turning back to them each time you need contingent labor. On the other hand, using an internal pipeline of candidates allows you to build more lasting relationships with contingent labor because you have access to their availability, background, goals, and preferences.  Overtime, this increases your organization’s ability to maintain a cohesive workforce and a strong culture—even with a mix of permanent and temporary labor.

Better visibility

As you seek to evolve your approach to staffing and scheduling to accommodate a more diverse workforce, it helps to have clear visibility into all the available resources and needs. With a broad view of availability, skills, preferences, and costs, facilities can strategically match workforce resources with needs across the entire facility or multiple facilities.

How to Decide What Contingent Workforce Management Approach is Right for Your Organization

Both MSPs and internal agencies have unique advantages for handling contingent clinicians; there is no single “right” answer—every organization is unique. Again, it’s like the renting versus buying debate—the solution will be different depending on financial situation, existing relationships, and your overall goals.  

The internal management approach is an increasingly popular and effective strategy, because data and technology are opening previously impossible workforce management options. It is up to your team to build a workforce management strategy that responds to market needs and works for your operational realities. Change will remain the only constant in healthcare—the key is to stay nimble and invest in tools and processes that will help your facility adapt to shifting needs.  

Take Control of Contingent Workforce Management with Works

Trusted Works simplifies and streamlines internal workforce management. Works' user-friendly technology makes it easy to assemble your own contingent clinicians without straining your internal team. With this intelligent solution, you gain the ability to manage your entire contingent workforce from a single source of truth. Equip your leaders with everything they need to make cost effective staffing and scheduling decisions that benefit patients, clinicians, and your organization alike. Learn more about how Works can help your hospital self-manage contingent labor at