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Trusted Health

The Comprehensive Guide to Building an Internal Agency

The Comprehensive Guide to Building an Internal Agency

By Trusted Health

The Future of Nursing isFlexible

Maintaining full staffing levels has always been a vital and critical ingredient for a healthy and thriving hospital.

While health systems have always struggled to manage – let alone optimize– their staffing spend, COVID took staffing shortages to an entirely new level. As hospitals struggled to achieve safe staffing levels, contract labor budgets skyrocketed, and with more FTE nurses having to work overtime in highly stressful environments, churn rates increased as well.

Even as clinician demand has begun to stabilize, staffing challenges continue, and macro trends suggest the challenge of finding nurses will only increase. During the pandemic, many clinicians turned to travel nursing to increase their flexibility and pay, or dropped out of the workforce all together. And like their peers in other industries, the nurses that stay in the field are increasingly demanding more control over their schedules.

With all the volatility and uncertainty in the industry, it’s no wonder Becker’s Hospital Review found in a 2021 survey that clinical workforce shortages are the number-one overall concern for hospital CEOs.

According to a Trusted 2021 survey, nearly three-quarters of nurses (71%) say their experience as a nurse would improve if they had more control over their schedule.

Historically, hospitals maintained a small pool of flexible clinicians. But COVID-19 showed that the “old way” of staffing was unsustainable, as clinicians all over the country left healthcare systems in favor of better pay and more flexible options offered by travel nursing agencies.

With over two years of experience tapping into flexible opportunities, many clinicians have no desire to go back to “the old way.” Those that can travel, do, and those that aren’t able to travel due to personal or family obligations, are choosing to leave the bedside.

In order to solve for these challenges, the composition of the nursing workforce employed by the health systems must change.

It’s no longer possible to rely on contract labor and small flex pools. To achieve a flexible nursing workforce ecosystem that is operational, efficient, and consistently meeting staffing needs, healthcare facilities must find better ways to engage their existing workforce, and find ways to become more creative to meet the demands of the modern workforce.

This is where flex programs, like internal travel agencies, come in.

With an internal travel program, hospitals can give nurses the ability to gain schedule flexibility, learn new skills and experiences from working across multiple departments, hospitals and even geographies, while receiving more competitive wages. This leads to a more engaged workforce, higher retention rates and the ability for hospitals to finally reduce their reliance on costly contract labor expenses.

According to Mckinsey Research, the United States may have a gap of between 200,000 to 450,000 nurses available for direct patient care, equating to a 10 to20 percent gap in supply by 2025.

Building Workforce Balance

How Internal Travel Programs Benefit Nurses and Hospital Administration Alike

Consider this: throughout the life of a clinician, there are many life factors that may change their ability to commit to a traditional full-time schedule.

  • A junior clinician that wants the pay and varied experiences offered by travel nursing
  • A parent that needs to move to a part-time or flexible schedule in order to spend more time with children
  • A clinician dealing with their own health care challenges
  • A clinician nearing retirement age that can no longer sustain long hours or work overnights
  • A local traveler that wants the benefits of working within a healthcare system, but can not commit to a regular schedule due to other obligations, such as caring for a sick parent

These are just some of the many reasons clinicians may need flexible work. Without flexible options, many of these clinicians simply drop out of the workforce, contributing to the growing turnover and churn rates of the workforce. Internal travel programs give clinicians the benefits of working within a trusted healthcare facility, plus the flexibility and benefits offered by external travel agencies.

In exchange for providing this flexibility to staff, facilities also gain flexibility in the way they leverage their internal resources, making it easier to match nurses from a variety of internal pools to the greatest need. Hospitals that adopt flexible staffing programs – like an internal agency program – report the following benefits:

  • The ability to save money by investing more into internal float staff versus the cost of contract labor and special pays
  • A larger and more engaged internal workforce due to more flexible and clinician friendly work hours
  • The ability to move away from external contract labor to staff more shifts with internal employees who may be more familiar with and closely aligned to your health care system’s mission, vision, values, and culture
  • Combining the stability & benefits of an internal employee with the competitive pay rates offered by internal travel enables hospitals to compete for top talent, reengaging nurses who have been lost to outside travel agencies

What is an Internal Travel Agency?

There are many types of programs that offer flexibility to clinicians, but an internal agency program has specific attributes. Programs of this nature are comprised of a team of flexible clinicians (RN’s, CNA’s, etc) or allied health professionals employed by the health system that work long-term contracts (4-26 weeks) or day of staffing assignments spanning multiple specialties, facilities and states.

Most programs offer full-time or part time employment, vacation hours, insurance and other benefits, while providing nurses with the pay and flexibility offered by external agencies – including traveler rates and stipends for floating outside their home region.

Employee groups within your internal travel program may be comprised of the following types of workers:

Internal Travel

A group of clinicians (RN and allied health) who are hired by the health system and placed on long term contracts (4-26 weeks) on a specific unit at a hospital or in a predetermined float pool for a hospital/s. The employee’s working assignment is 50 miles or greater from their primary residence and therefore, are paid an hourly wage, housing stipend, and meal and incidental allowances to accommodate for travel from region to region or state to state.

In many cases, the clinicians in this program can be full or part-time and they are offered a variety of benefits related to their employment type such as PTO, retirement, time off in-between assignments, incentive pay, or certification pay. Depending on the geography of the health system, the internal traveler may also need to obtain multi-state licenses to complete different travel assignments for their health system.

Local Internal Travel

A group of clinicians (RN and allied health) who are hired by the health system, and can be assigned to an inpatient unit for either day of staffing or preassigned to a unit when the schedule is built. Employees in this group live within the 50 mile radius of the hospitals, and don’t require a housing stipend or meal allowances per travel regulations.

Clinicians in this group can be full, part-time, or per diem and are offered a variety of benefits related to their employment type such as PTO, retirement, time off in-between assignments, incentive pay, certification pay, and reimbursement for driving between facilities when floated during their daily staffing assignment.

Creating these flexible layers allows nurses to match with per diem shifts and long term contracts that fit their lifestyle, and give the organization the opportunity to fill “on demand” staffing requests with their own hospital staff, versus having to look outside the healthcare system for traditional contract labor.

Getting Started: Building Your Own Internal Travel Agency

Building a self-managed, flexible internal staffing program is achievable, but it does take planning and effort. The following steps are a roadmap for hospitals looking to move toward the development of an internal travel program.

Pre-Launch: Program Definition & Requirements

1. Assemble the team for success

Building an internal travel program requires support as well as resources from multiple teams, and it’s important to get buy-in early on from all relevant stakeholders. It’s recommended that the first step when investigating if such a program is right for your hospital is to launch a steering committee that includes representatives from nursing, HR, TA, finance and IT.

Involving a cross functional group has multiple benefits.Not only can department-specific stakeholders capture the department-specific issues and concerns during program design, but they can also serve as a champion for the program, and help drive consensus throughout the team. From each group, you should engage a senior team member who has executive buy-in, and who can commit to meeting with a regular frequency leading up to the program launch.

As with any change, there will always be stakeholders and stakeholder groups with concerns about deviating rom the status quo, so having this interdisciplinary team from the beginning can be a way to have champions within each department who can understand the requirements and needs from each team to make sure that they are effectively addressed, and effectively report back to teams about progress made toward the overall goals.

2. Create A Shared Vision of Success

Once the stakeholder team has been assembled, it’s important to define what program success will look like. This may look different for every group.

For example, while Finance and Operations teams may be primarily concerned with the cost analysis of such a program, nursing teams may be more concerned with time-to-fill, and workforce trends such as turnover and retention. Additionally, people managers and HR staff may be judging success against how the program is received by the front line and receiving managers. In reality, an internal agency can impact all of these metrics, and should be looked at as critical KPIs for success.

In order to set budgets and ROI metrics, it’s critical to understand the costs of the status quo. For many hospitals, contingency spend is accrued across many different suppliers and sources, and there may not be centralized visibility into the current performance of those suppliers.

For example: What is your agency spend and usage across the last twelve to six months? What type of flexible workforce programs exist within your health system today? What is the current cost of doing nothing? (To determine this, look at overtime and incentive fees, as well as the cost of decreased patient capacity across the system.)

Once you have a sense of how much you’re spending with external contract labor, and how this would translate into spend across your internal FTE, you can begin defining what an internal travel program would mean for your health system.

3. Define Program Scope

While perfection isn’t achieved overnight, the goal of“perfection” can be the biggest pitfall of program deployment. Many organizations delay progress by over-designing solutions, or planning for a one-and-done rollout; in reality, the best projects are iterative, and start with a tightly defined scope for Phase I.

With an understanding of the current working operational model, job descriptions, and compensation model, decisions can be made about what is “in scope”for launch.

For example: Will your internal travel clinician work at a system level (if your system is multi-state, you will need to be able to track state-specific credentialing and compliance needs)? Will you incorporate nursing only, or facilitate internal travel for other allied health positions? Will the program support both local travel and contracted travel?

These decisions can help you further assess costs, and organizational impact of the change.

4. Develop the Operational Model

Once you decide the program scope, you can begin defining the program specifics, which should include the types of roles you will offer, and the hiring plan. After defining the initial comp model for your internal agency model, including hourly rate and benefits, do a cost comparison of your current agency spend to the cost of an internal model using the average hourly rate of your external travel as a baseline.Include additional spend such as management cost, technology, or marketing, as these will all be costs that factor into the success of the new program.

Some tips for getting started:

  • Use the historical agency data to convert agency FTE to internal agency FTE to set your hiring target by speciality
  • Build the job description to include experience and flexibility requirements and full time, part-time or prn expectations.
  • Develop the compensation model to consider hourly rate, housing stipend, and food allowances
  • Determine whether your flex roles will include PTO plans, reimbursement for state licensure, tuition reimbursement and other professional opportunities such as a clinical ladder etc.

5. Define Your Technology Strategy

The biggest barrier to launching an internal agency program for many hospitals is the belief that it will be too resource-intensive. Flexible programs are inherently more complex, with varied costs for different shift types, and the ability to move nurses across the system, and many hospitals mistakenly believe a large team is required to manage the dynamic nature of such a program.

Fortunately, a wide range of technology solutions have emerged to allow nurses to automate those processes, opening up new opportunities to meet the needs of the changing workforce. With the proper technology, a trained manager can manage a 150 person internal travel program effectively, versus the standard 3 people it would require to manage hiring, onboarding and deploying the workforce without technology.

Dedicated contract labor solutions, like Works by Trusted, enable hospitals and health care systems to create and manage internal travel programs, offering capabilities such as:

  • The ability to automate contract approvals & extensions, credentialing, and internal system provisioning to ensure JCAHO readiness and compliance
  • The ability to centralize all staff (internal and external) and shifts in one place
  • The ability to categorize and understand the many different types of supply available for any given shift(when FTE can’t get the job done, shifts can be covered by per diem, local/regional float, or contract resources – which all come with different costs and availability/
  • The ability to leverage price discovery and competition to rapidly match resources to where they are most needed whether between units, facilities or even state line6
  • Built-in flexible frameworks for balancing supply and demand and managing the process of matching nurses to shifts,
  • Must use data science and AI to predict potential demands shifts
  •  Must enable hospitals to leverage cost-based models to determine which nurse is the best fit for which shift
  • Must be user-friendly and easy to adopt by staff and managers alike
  • Should connect to the source-to-pay process so decisions about staffing can be easily actioned and tracked without disruption

While technology exists to simplify the management of flexible shift work, you will still need support from the team. HR and Finance stakeholders will need to work together to set up the system cost center and build out the payment model in your payroll/HR system. You will also need IT support to set up workforce technology, and Legal or Operations support to ensure competency, licensure and credentials are aligned with the contracts the team has set up.

6. Define Your Technology Strategy

With a fully defined, and well socialized program, the next step toward launching your internal travel agency is focused on successful change management and recruitment strategies.The program won’t work if teams aren’t properly educated about the benefits of such a program, and don’t understand how payment terms and benefits work.

It may take time for the program to really get rolling, so develop a target hiring plan for internal and external candidates to allow for sustainable operations while building the supply.

When building a compensation plan and package, consider offerings such as PTO, payment for licensure, and the ability to flex base pay to respond to market trends.

Finally, education is key. Not just for your existing workforce, but for new recruits who will see your flexible programs as a differentiator for your hiring brand. This is where strong support from Talent teams is critical, and potentially a stakeholder from Marketing who can run point on advertising your agency.

Once your program is live, you will need to help transition employees into these roles. Make sure nursing and/or allied teams understand how to best execute in this program, and what is expected in the roles.

You may need to consider:

  • Specific educational and onboarding plan for internal travelers
  • Change management and educational material to socialize the program to the nurses and to the nurse leaders
  • Options for converting existing external travelers to the program

7. Time For Roll Out!

With a solid plan, the proper technology and internal training in place, it’s time to launch. This should be an exciting time for the hospital, as it represents a new era of clinician-centric, flexible staffing.

Allow for a minimum of three months to develop and launch the program. It will be important to measure key metrics with the program such as hiring targets for the quarter, time to fill, candidate pipeline, satisfaction of the nurse and the participating in patient units, and operating cost and savings. It is also important to remember that it does take time to build your pipeline and converting from external to internal travel to show cost saving could take up to a year to realize the full benefit of the program.When kicking this off within your hospital, it can be helpful to launch the program as a pilot program. This approach not only minimizes the disruption of change hospital wide, and creates a group of users who appreciate the program and know how to use it effectively; ideally, these early adopters become positive voices for change, and can continue to champion the solution as it is rolled out across the rest of the organization.

Mercy BuildsAn InternalAgency WithTrustedHealth: A RealLife Example

Mercy partnered with Trusted Health to build an operating system for Mercy’s flexible workforce.The combined team first modernized Mercy’s procurement of long term agency labor by removing burdensome legacy processes, driving workflow automation and refocusing the user experience on a critical but often overlooked stakeholder - the clinical hiring manager. Mercy and Trusted have since expanded their partnership to develop intelligent shift management, laying the groundwork to programmatically fill open shifts with the right clinician at the right time, place and cost, regardless of source

After rolling the program out at their Springfield location, the team experienced the following benefits:

Optimized OperationalEfficiency

Leveraging the Works platform, Mercy moved multi-step and multi-stakeholder candidate submittal review, change request approval and offer processes away from ad-hoc email chains to structured on-platform workflows, significantly reducing manual touchpoints to fill while enabling end-to-end reporting& analytics to manage supplier performance. The addition of event-triggered notifications with deep links for onboarding, compliance, timesheet management & dispute resolution further lowered the operational overhead necessary to maintain agency talent pools.

Increased Fill

Rate Automation of recruiting for Mercy’s incentive shift program via programmatic shift distribution enabled Mercy to better leverage internal talent pools, proactively increasing the fill rate for critical care needs, while significantly reducing the need for central staffing office and hiring manager involvement in manual, last-minute recruitment efforts.

Reduced Premium Spend

Using a proprietary dynamic shift pricing algorithm, Mercy was able to identify which available clinicians are interested in which shifts, load balance matches and selectively recruit to balance fill rate and spend. Doing so also allowed Mercy to incorporate external supply while mitigating the risk of agency overspend.

That’s really nice— and not common,” she said. “You have a lot of flexibility, and the pay is still really good.”

In addition to improving the hospital’s ability to meet its goals, focusing on flexibility has made life easier for clinicians too. Valerie Frohwein, 37, of Republic, Missouri, near Springfield, learned about Mercy Hospital Springfield’s gig worker program a few months ago, and decided to start picking up shifts. Frohwein had worked as a pediatric nurse at the hospital previously. But for the past year she’s been working asa school nurse at her daughter’s elementary school, so that they could have similar schedules. Working in the pediatric floor at Mercy helps her keep up her skills caring for patients in an inpatient setting, which she may want to do full time again when her daughter is older. And as a gig worker she can take shorter shifts, of eight or even four hours, instead of 12. “That’s really nice — and not common,” she said. “You have a lot of flexibility, and the pay is still really good.”

A Final Word

Flexible staffing programs can introduce complexity. But with a technology platform like Works, it’s easy to create and self-manage programs that provide ultimate operational flexibility at a lower cost. From creating and managing your own internal agency or travel program, Works automates and facilitates the hiring process, moving from requisition and approval through interview and offer, then allows management to track compliance, onboarding, and system provisioning as employees move from site to site, to dramatically simplify the operations of an internal agency or travel program. When it comes to cost-savings, WORKS delivers Hospitals use Works to reduce administrative and contract labor costs, reduce overall churn and talent acquisition costs, and rely on easy automation instead of expensive middlemen to manage talent acquisition and the source to pay process. Built-in analytics help hospitals understand exactly to where they are tracking budget, so it’s easy to make shifts in hiring strategy when needed.