--- title: A BETTER WAY TO MANAGE HEALTHCARE CONTRACT LABOR COSTS description: Over the past five years, agency-based MSP programs have proven ineffective at controlling both unit costs and utilization for Hospitals and Healthcare employers. image: https://blog.hwlworks.com/hubfs/Healthcare%20Contract%20Labor.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/a-better-way-to-manage-healthcare-contract-labor-costs#) ### x**HEALTHCARE INDUSTRY NEWS** Get industry news, client announcements, product release info, and HWL Insights directly in your inbox! # A BETTER WAY TO MANAGE HEALTHCARE CONTRACT LABOR COSTS [healthcare vendor management](https://blog.hwlworks.com/tag/healthcare-vendor-management), [agency spending](https://blog.hwlworks.com/tag/agency-spending) ![Healthcare Contract Labor](https://blog.hwlworks.com/hubfs/Healthcare%20Contract%20Labor.jpg) Eighty nine 89% of hospitals that have adopted [MSPs or VMSs](https://www.hwlmsp.com/about/#top) stated that cost savings were the primary goal for these partnerships. Unfortunately, over the past five years, Agency-based MSP programs have proven ineffective at controlling both unit costs and utilization. ## Good News for Agencies is bad news for Healthcare Employers ![Artboard 1@2x-100](https://blog.hwlworks.com/hs-fs/hubfs/Artboard%201@2x-100.jpg?width=1049&name=Artboard%201@2x-100.jpg)   ![Average Travel Nurse Bill Rates vs Managed MSP Growth](https://blog.hwlworks.com/hs-fs/hubfs/Average%20Travel%20Nurse%20Bill%20Rates%20vs%20Managed%20MSP%20Growth.jpg?width=1055&name=Average%20Travel%20Nurse%20Bill%20Rates%20vs%20Managed%20MSP%20Growth.jpg) - Spend on healthcare agencies has grown 60% from $10 billion in 2013 to $16 billion in 2018. - The national average travel nurse bill rate increased 14% in the four years from 2013 to 2016. - Legacy MSP/VMS customer satisfaction is low amongst healthcare employers (3.6 out of 5) - Agency margins have grown significantly since 2013 and Wall street analysts continue to support Buy ratings for the largest healthcare staffing agencies based on increased market penetration of their MSPs and corresponding margin expansion. ## Our three-step approach that helps healthcare employers gain back control over agency spending.   ### Dynamic Sourcing Process That combines market-based pricing analysis, proprietary real-time market demand data, and unique insight into agency delivery capabilities. ### Vendor Neutral Approach To agency management that creates an open-marketplace for agencies to compete with each other to deliver the highest qualified professionals reducing time-to-fill and ensuring the best match for the healthcare employer’s need. ### Advanced Proprietary VMS [Technology](https://www.hwlmsp.com/technology/) with customized workflows for all disciplines, and the ability optimize utilization of internal resources, reducing dependency on outside agency. If you are looking for ways to reduce your agency costs and reliance, reach out to us to schedule a time to speak.   [![Schedule a Demo](https://no-cache.hubspot.com/cta/default/4293270/ee6e1c9e-6993-4dd6-9211-eba52cb63f11.png)](https://cta-redirect.hubspot.com/cta/redirect/4293270/ee6e1c9e-6993-4dd6-9211-eba52cb63f11) August 06, 2018/By [Jeff Niles](https://blog.hwlworks.com/author/jeff-niles) TAGS: [healthcare vendor management](https://blog.hwlworks.com/tag/healthcare-vendor-management), [agency spending](https://blog.hwlworks.com/tag/agency-spending) ##### 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 [To Break Down the Hiring Barriers in Locums, it is Vital to Be Prepared](https://blog.hwlworks.com/how-to-streamline-locum-hiring-to-ease-transitions) [The Time to Go Vendor-Neutral is Here](https://blog.hwlworks.com/the-time-to-go-vendor-neutral-is-here) [HWL Introduces Vaccination Staffing Program](https://blog.hwlworks.com/hwl-introduces-vaccination-staffing-program) [HWL Addresses Urgent Staffing Needs of Facility Hard Hit by COVID-19](https://blog.hwlworks.com/hwl-addresses-urgent-staffing-needs-of-facility-hard-hit-by-covid-19) [Healthcare Workforce Logistics: Reinventing Workforce Management](https://blog.hwlworks.com/healthcare-workforce-logistics-reinventing-workforce-management) 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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