The cost associated with premium contingent labor, like travel nurses, is always higher than salaried permanent nursing positions and coronavirus (COVID-19) exacerbated an already-significant situation by creating an environment in which these critical resources are in even higher demand. Recent estimates state that the global contingent workforce industry generated around $171.5 Trillion in 2021. At the same time, around 90% of healthcare executives said that they utilized travel nurses within their organization. For better or worse, the healthcare industry has become heavily reliant on travel nurses and contingent labor in general. Naturally, this means staffing costs have increased; and there are no signs of a reversal.
This presents a delicate situation for hospital leaders. How do nursing and human resources executives make sure that high-quality patient care is delivered at the bedside while balancing mounting financial pressures?
On average, travel nurses in the US make between $65-85 per hour for normal hours. There are, however, other factors at play that could increase these costs significantly:
Considering this is per nurse, per hour, you can see how these labor expenses quickly add up, particularly during unexpected spikes in patient volumes.
According to Becker’s Healthcare, “Continued high demand for nurses, particularly experienced and specialty nurses, is expected to sustain growth in the utilization of travel nurses at healthcare facilities for the foreseeable future.”
While the national average travel nurse bill rate continues to rise, how do you make sure that you are not overpaying for resources?
Too often healthcare organizations have contracts with multiple staffing vendors with varying rates, or they have a single contract with an agency-led managed service program (MSP) in which the client is dependent on the agency to set a fair market rate.
Agency providers are not likely to volunteer to reduce rates when organizations are willing to overpay. Periodically conducting market analysis is the best way to force transparency and identify successful rates for the market and realize potential cost savings. A Market Rate Analysis is the process that studies all rates being paid for the same service in a given area and determines a competitive range of rates that is high enough to be competitive and get orders filled without overpaying when the supply is sufficient. This critical component to travel nurse cost control should be conducted to ensure rates are competitive and suppliers are providing CNOs with the negotiated rate structures.
Healthcare delivery organizations need talent acquisition and workforce management solutions that enable them to deliver high-quality patient care at the bedside while minimizing the premium cost of doing so. CNOs can begin to take control of travel nurse costs by utilizing a vendor-neutral vendor management system (VMS). A vendor-neutral VMS will give leadership a clear view of where and how often each department is using temporary help to swiftly translate utilization data into action—resulting in reduced cost per travel nurse and provide insights to focus efforts and prioritize the hiring of qualified permanent staff.
Most importantly, a vendor-neutral solution ensures that the most qualified nurses, not just the nurses that the agency managing the MSP has available, are proposed for the job. Too often, agency-led MSPs limit the flow of job orders to the market for up to 28 days, creating delays in filling job orders and serving to maintain rates at an artificially high level.
Read, ‘The Importance of Vendor Neutrality & Why it Should Matter to You.’
CNOs face many challenges with regard to managing travel nurse costs. From a lack of consistent process for sourcing, onboarding, and compliance management - to the lack of visibility into travel nurse usage and spend, the process of identifying and selecting a solution can be complex. This is where a managed workforce solutions program with a proven track record and a powerful VMS can save you time and money. Here’s how:
Around 71% of hospitals adopt an MSP or VMS to help manage contingent labor forces. Additionally, around 89% of those hospitals that have adopted MSPs or VMSs stated that cost savings were the primary goal for these partnerships. Unfortunately, over the last few years, Agency-based MSP programs have fallen short of controlling both unit costs and utilization.
That's what sets HWL apart from the rest. We keep a pulse on current market dynamics and knowledge of advanced data analytics to provide a VMS that streamlines travel nurse activity and spend transparency.
Through a combination of proprietary next-generation technology, advisory services, internal agency services, and customizable MSP services, HWL delivers a Total Talent Acquisition solution that lowers overall contract labor costs while reducing administrative burden.
For more information on a better way to manage travel nurse costs or to request our services contact us, 833-HWL-INFO.