--- title: 5 Reasons Why Organizations Should Rethink Exclusive Agency MSP Contract description: Legacy Agency MSP models are built on a foundation of an agency-led model, today’s reality has shown it may be time to consider a new approach. Read more. image: https://blog.hwlworks.com/hubfs/contract-signing.jpg --- [VMS Login](https://vms.hwlmsp.com/) [![HWL_2C_300DPI-Aug-29-2023-12-27-59-4566-PM](https://blog.hwlworks.com/hs-fs/hubfs/HWL_2C_300DPI-Aug-29-2023-12-27-59-4566-PM.jpg?width=201&height=75&name=HWL_2C_300DPI-Aug-29-2023-12-27-59-4566-PM.jpg "HWL_2C_300DPI-Aug-29-2023-12-27-59-4566-PM")](https://www.hwlmsp.com/) [Industry News](https://blog.hwlworks.com/5-reasons-to-rethink-exclusive-msp-contract#) ### x**HEALTHCARE INDUSTRY NEWS** Get industry news, client announcements, product release info, and HWL Insights directly in your inbox! # 5 Compelling Reasons Why Organizations Should Rethink Their Exclusive Agency MSP Contract [MSP](https://blog.hwlworks.com/tag/msp) ![](https://blog.hwlworks.com/hubfs/contract-signing.jpg) ​​Approximately 70% of healthcare organizations contract with an MSP or VMS provider for the procurement and management of contract labor. Most of these programs are managed by staffing agencies eager to box out their competition, control pricing and maximize profits in each client account.  However, one tactic that many of these healthcare MSP/VMS providers use is requiring a binding *exclusivity clause *that limits an organization's options, particularly when it comes to severing that partnership due to underperformance or fluctuations in the job market. Companies such as Healthcare Workforce Logistics (HWL), on the other hand, do *not* require such clauses for two main reasons: 1. Exclusivity clauses raise a red flag because they can incentivize lackluster work. If an MSP or VMS provider has you locked in  regardless of whether or not they uphold their end of the agreement,  the healthcare organization will be the one to bear the losses when things don't work out as planned. 2. Confidence. We have filled over 12,500 jobs so far and we are confident in our track record. Our business model allows us to do what we do best *and *allows you to work with other vendors or staffing agencies if you so choose. ## **Ups and Downs of Typical MSP/VMS Providers** Provided that most, if not all, of the needed positions are filled by the MSP/VMS, the benefit to the healthcare organization is having a single point of contact, standardization of contracts, streamlined communications and more efficient processes. The benefit to the Agency MSP/VMS provider is guaranteed revenue on every requisition filled; however, if positions are not getting filled, the value of this arrangement to the healthcare organization goes down….way down.  Unfilled positions can translate into lost revenue, closed units, and overstressed departments. As we are witnessing during the COVID-19 pandemic, when demand outpaces supply, the client bears the greatest burden, suffering a great deal more than their Agency MSP/VMS partners. The inclusion of onerous exclusivity provisions and limitations on the ability of clients to terminate existing agreements with Agency MSP/VMSs who are not performing, are commonplace in many existing contractual agreements. By holding the customer to an ironclad, exclusive arrangement, the Agency MSP/VMS is able to limit the number of suppliers that can service the client  which results in above-market bill rates. Perhaps even more damaging is that by removing the ability for the healthcare organization to contract with other MSP/VMS providers, the Agency MSP/VMS imposes a distinct disadvantage to their customer when it comes to sourcing enough critically needed staff within a short time frame—risking quality patient care.    *Relevant Reading: *[*Learn about HWL’s COVID-19 Rapid Staffing Program*](https://info.hwlmsp.com/cv19)*.*   ## **What is an Exclusivity Clause?** An exclusivity clause is a section in a contract that restricts the signer from working with or engaging in services with other providers. Put simply, the signer is forced to work exclusively with the issuer of the contract until the agreed-upon initial term period ends.  According to [UpCounsel](https://www.upcounsel.com/exclusivity-clause), “An exclusivity clause mandates that the parties who have signed are legally restricted to sell or purchase goods to or from a single party. The buyer is restricted from promoting, buying, or using similar products from any other vendor or provider.”   ## **5 Compelling Reasons You Should Rethink Your Exclusive MSP/VMS Contract** Ask any vendor or talent acquisition manager if they would prefer to be locked into one vendor exclusively and they will fervently tell you, “No,” and here’s why; healthy competition ensures you receive superior service and attention.  Before you agree to an exclusive MSP contract consider the potential drawbacks. 1. Locked into one vendor for a significant period despite changing market conditions 2. Not incentivized to research new opportunities or close deals quickly 3. Lose the option to add new vendors as needed 4. Higher likelihood of incurring ‘crisis’ rates 5. Less proactive market intelligence provided   ## **Protect Your Freedom to Choose** Is it ever good to have only one choice of anything, especially in a [volatile staffing market](https://www2.staffingindustry.com/eng/Editorial/Healthcare-Staffing-Report/July-8-2021/When-will-the-healthcare-growth-subside)? Of course not. Freedom to choose is the cornerstone of a competitive marketplace keeping costs low and quality high. Making vendors compete for your business is not only a good choice for you, but it also keeps your vendors focused on your organization’s needs.  When you are free to work with any vendor you remain in control. And in this market, control is good and management is likely looking to control or mitigate what they can, when they can, in these uncertain times.   [Request Market Analysis of Hiring Trends in Your Area](https://www.hwlmsp.com/contact/)   ## **Elements to Look for in an MSP/VMS  Contract** When it is time to evaluate MSP contracts, pay close attention to these elements: - Scope of agreement - look for non-exclusive MSP - The initial term and renewal period - What constitutes a breach of the agreement - Fees - when and with what notice the vendor can modify their price list   ## **Balance, Manage & Reduce Contingent Staffing Costs** Patient demand is not static, and neither is the availability of your healthcare workforce. With multiple vendors vying for your attention, vendors are required to balance the demand in the market with the right number of partners to ensure everyone’s success and solidify their partners’ commitment. Only with a program that gives you access to the entire market and the ability to negotiate rates freely do you retain control over costs. *Not sure where you stand? A market analysis of hiring trends in your area can guide the decision to engage an MSP. *[*Contact*](https://www.hwlmsp.com/contact/)* our team today to learn more: *[*info@hwlmsp.com*](mailto:info@hwlmsp.com)*.*   ***Additional Resources*** - [*[Partner Success Story] Supplemental Health Care + HWL*](https://www.hwlmsp.com/partner-success-stories/supplemental-health-care-hwl/) - [*How Supplemental Health Care Became the Playbook for COVID-19 Staffing*](https://blog.hwlmsp.com/how-supplemental-health-care-became-the-playbook-for-covid-19-staffing) - [*Achieve Vaccine Rates in Outlying Communities Faster*](https://blog.hwlmsp.com/achieve-vaccine-rates-in-outlying-communities-faster) - [*[Checklist] Are You Managing Contingent Labor Effectively?*](https://blog.hwlmsp.com/checklist-are-you-managing-contingent-labor-effectively)   December 05, 2021/By [Jeff Niles](https://blog.hwlworks.com/author/jeff-niles) TAGS: [MSP](https://blog.hwlworks.com/tag/msp) ##### Share this entry - Share on Facebook - Share on Twitter - Share on Pinterest - Share on Linkedin - Share on Tumblr ### Author: [Jeff Niles](https://blog.hwlworks.com/author/jeff-niles) Jeff is the Chief Revenue Officer for HWL and has been in healthcare contingent workforce management for more than 20 years. Jeff has led sales, implementation, and client services to some of the largest and most influential healthcare providers with technology and solutions installed in over 3,000 hospitals in 50 states and the UK. Jeff is inspired to work with transformational leaders that have a vision to achieve the highest levels of efficiency, transparency, compliance, quality and cost savings. Contact Jeff at jniles@hwlworks.com. Find me on: [LinkedIn](https://www.linkedin.com/in/jeffniles/) ##### You might also like [Vendor-Neutral vs. Agency-Run MSPs: What Actually Differentiates the Models](https://blog.hwlworks.com/vendor-neutral-vs.-agency-run-msps-what-actually-differentiates-the-models) [The Market Hasn’t Settled. It’s Signaling.](https://blog.hwlworks.com/the-market-hasnt-settled.-its-signaling) [Vendor Neutrality in Locums: A Strategic Lever for Physician Recruitment Leaders](https://blog.hwlworks.com/vendor-neutrality-locums-physician-recruitment-strategy) [From Fragmented to Strategic -Transforming Healthcare Contingent Labor Management Through Unified Vendor Platforms](https://blog.hwlworks.com/from-fragmented-to-strategic-transforming-healthcare-contingent-labor-management-through-unified-vendor-platforms) [Healthcare MSPs: Your Secret Weapon for Navigating Industry Chaos](https://blog.hwlworks.com/healthcare-msps-your-secret-weapon-for-navigating-industry-chaos) [The Threat of Consolidation in Staffing: The Case for Vendor Neutrality](https://blog.hwlworks.com/the-threat-of-consolidation-in-staffing-the-case-for-vendor-neutrality) [Scaling Up Without Stress: How VMS/MSP Solutions Keep Healthcare Growing (And Keep You Sane)](https://blog.hwlworks.com/scaling-up-without-stress-how-vms/msp-solutions-keep-healthcare-growing-and-keep-you-sane) [The 3 C's of an Effective VMS/MSP partner](https://blog.hwlworks.com/the-3-cs-of-an-effective-vms/msp-partner) Please feel free to keep the discussion going in the comments section below. ### Latest News - [What If We've Been Measuring the Wrong Workforce Metrics](https://blog.hwlworks.com/what-if-weve-been-measuring-the-wrong-workforce-metrics) July 09, 2026 - [Built by Educators. 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