Latest / Becker’s Healthcare Podcast / Beyond Staffing: How Henry Ford Health Is Rethinking Contingent Labor

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Beyond Staffing: How Henry Ford Health Is Rethinking Contingent Labor · Becker’s Healthcare Podcast

0:00
Hi, everyone. This is Lucas Voss with Becker's
0:02
Healthcare. Thanks so much for tuning in to
0:05
the Becker's Healthcare podcast series. It's fantastic
0:08
to have you.
0:09
I'm a story some research ahead of this
0:11
episode today, and healthcare workforce challenges certainly continue
0:14
to persist and per projections from the Bureau
0:17
of Health Workforce show a shortage of up
0:19
to 141,000
0:22
physicians by 2038
0:24
alongside
0:25
major nursing gaps including over 100,000
0:29
RNFDEs and almost 250,000
0:33
LPNFDEs.
0:35
And at the same time, and these numbers
0:37
were very staggering as well, the 2024
0:40
American Medical Association national report showed that
0:43
forty three percent of physicians report at least
0:45
one symptom of burnout. More than 138,000
0:49
nurses have left the workforce since 2022.
0:53
And here's the kicker to that, nearly forty
0:55
percent of RNs say they plan to leave
0:58
or retire within the next five years. Now
1:01
let those numbers sink in. Right? They're very,
1:04
very staggering as I've mentioned. With an agent,
1:06
clinician workforce, and healthcare staffing spend projected to
1:08
reach nearly 40,000,000,000
1:10
this year. The financial and operational stakes really
1:13
couldn't be higher for health care leaders right
1:15
now. So the question is,
1:18
what should health system leaders do now? And
1:21
we're certainly going to address some of these
1:23
questions or that question. I'm so excited to
1:27
be joined by Scott Regaland. He's the director
1:29
of centralized staffing and vendor contracting at Henry
1:31
Ford Health. We'll discuss how his team is
1:34
strengthening governance, improving workforce visibility,
1:37
and building a whole house strategy through a
1:39
vendor neutral managed service provider partnership.
1:43
Scott, it's so great to have you. Welcome
1:45
to the podcast.
1:47
Thank you, Lucas. Appreciate the invitation. It's a
1:49
pleasure to be with you. Thank you. So
1:51
great to have you. And you've been leading
1:53
contingent workforce strategy at Henry Ford Health
1:56
for a while now, since 2018.
1:59
I'd love to know from your perspective too,
2:02
how has the program evolved
2:05
over the last eight years?
2:07
Well, I'll tell you the term Wild Wild
2:09
West comes to mind because when I arrived
2:11
in 2018,
2:13
the system was,
2:15
significantly
2:16
decentralized.
2:17
We had an extensive array of vendors across
2:21
the systems with standalone
2:23
contracts,
2:24
limited oversight.
2:26
There really weren't any controls. We accumulated
2:28
the spend,
2:29
and we categorized it on the financial statement,
2:32
but we really didn't do very much with
2:34
that. And compliance
2:35
wasn't terribly consistent either.
2:38
Now my position
2:39
was
2:40
created. I wasn't taking over for somebody when
2:42
I got here. My position was newly created,
2:44
and
2:46
they needed
2:47
me, someone to come in
2:49
and kind of,
2:51
bring all of this madness together and start
2:53
the process of building a better program. So
2:56
we had a we had a couple of
2:58
hurdles. The first one,
2:59
was well, first, we needed to centralize the
3:02
program. We needed to get all of the
3:04
requests from across the system
3:06
coming to one office, that being my office.
3:10
And we needed to
3:12
then,
3:13
search for a new MSP partner
3:15
and simultaneous to that establish a governance model
3:19
to
3:20
make leaders comfortable that we were giving them
3:22
the visibility that we thought they needed and
3:25
and and they needed to know that it
3:27
was gonna be expected that they were gonna
3:29
be accountable,
3:30
for their affected cost center. So that was
3:32
part one. Part two was getting
3:35
the buy in from these leaders that were
3:37
using contingent labor.
3:39
To some of them by and large,
3:42
there wasn't a problem. This was too much
3:43
of an overhaul
3:45
as they saw we were fixing something that
3:47
wasn't broken.
3:49
Whenever they had a need,
3:51
they would reach out to their their one
3:53
and only vendor that they worked with who
3:55
would slingshot resumes over the fence. They take
3:58
the first
3:59
candidate submitted, and they call it a day.
4:02
It was it was easy, painless, no heavy
4:04
lifting. I was asking them to change, and
4:06
not everyone, as they say, likes change, especially
4:08
when they don't understand
4:10
the why behind it. So we had to
4:12
get them to that point, and and we
4:14
did.
4:15
To come back to your Wild Wild West
4:17
analogy, you'd have to become the sheriff a
4:19
little bit, right, in this situation.
4:22
It it really was. I it it was
4:24
almost like, being an air traffic controller too
4:27
because it was you had you had candidates
4:29
coming in. You had assignments coming to a
4:31
close. There really was no control over how
4:34
those assignments were getting extended. Some of them
4:36
were just extending. It was like a rubber
4:39
stamp extending on and on and on and
4:40
on and on. We weren't really doing anything
4:42
else. So,
4:44
yeah, there in in a way, I was
4:45
coming in and saying, you know, we're gonna
4:47
knock this off, because we're just you know,
4:49
there's not one giant sized checkbook in the
4:51
organization. We gotta figure out a better way
4:53
to manage this.
4:54
Yeah. And the checkbook is a is a
4:56
good point for me here as well because
4:57
as we've touched on in the intro, a
4:59
big piece of this is cost. A big
5:01
piece of this is budget, is money tied
5:04
to this. And and certainly cost pressures tied
5:07
to health care workforce aren't going away really.
5:09
This is going to continue.
5:11
In this environment specifically,
5:13
what are some of these foundational
5:15
elements of a well run contingent workforce strategy
5:18
for you?
5:20
Yeah. I think that's a great question. And
5:21
when I think about
5:23
optimizing contingent labor, or at least how we
5:25
did it, I think there are five foundational
5:28
pillars. The first I've already mentioned, we've already
5:30
mentioned, and that's governance.
5:32
In health care, decisions regarding contingent labor are
5:35
going to affect your your margin, and they
5:38
obviously also affect
5:40
patient care. So
5:42
we had to put in place
5:45
clear decision rights. There had to be
5:47
approval pathways. And, again, there had to be
5:50
accountability.
5:51
Somebody had to own
5:53
the decision to bring on contingent labor. If
5:55
nobody owns the decision, then the market's gonna
5:57
own it, and the market gets expensive.
6:00
So without governance, then your behavior
6:03
is driven by urgency. But with it, then
6:06
then you can now start to let strategy
6:08
take over. So that was one. The second
6:11
pillar is is data. Leaders obviously can't manage
6:15
what they can't see.
6:16
And,
6:17
it's not just reporting data. It's not just
6:20
reporting historically what happened last week, last quarter,
6:23
last year. How much did you spend?
6:25
It is about it's about providing that visibility
6:28
and that transparency that changes behavior. Today, when
6:32
a leader in our organization
6:34
sees a contingent staffing request hit their inbox
6:36
for their approval, they're gonna see who requested
6:39
it,
6:40
why it was requested,
6:41
and what it's projected to cost.
6:43
They can take that information
6:45
and
6:46
view that option alongside overtime. Nobody likes to
6:49
add overtime to to to the mix. But
6:52
are we able to accomplish what we need
6:54
by having a few people work a few
6:55
extra hours? We gotta be mindful of internal
6:58
burnout. We've gotta be we've gotta use things
7:01
like the vacancy rates and productivity metrics
7:04
into making this decision. Now when the data
7:06
is transparent and it's shared
7:09
across clinical and financial
7:11
leaders,
7:12
well, then our decisions are gonna get better.
7:14
They're gonna get smarter. And and contingent labor
7:16
then moves from anecdotal to to accountable.
7:20
The third pillar, and I could probably spend
7:23
the entire podcast on this, would be vendor
7:25
strategy.
7:27
Again,
7:28
past past program, multiple vendors, no cohesion,
7:31
no no nothing.
7:34
But
7:35
health care can't operate
7:37
like an open marketplace auction. It's not a
7:40
free for all, which it was when I
7:41
got here.
7:42
Strong programs build intentional partnerships often with a
7:46
rationalized group of vendors
7:48
that you hold to performance standards. And and
7:51
and through it, you can maintain rate discipline.
7:53
And you gotta be flexible, of course, for
7:55
specialty positions and specialty markets that are a
7:58
little harder to
7:59
to get the talent. But
8:01
the goal isn't this constant transactional
8:05
churn. It's about alignment and and reliability.
8:09
And, I would say rather emphatically, you need
8:12
to make your vendors your strategic
8:15
partners.
8:16
Prior to joining Henry Ford Health, I was
8:17
part of the staffing world.
8:19
It was fun, but I don't miss it.
8:21
For the most part, I know how vendors
8:23
think. I know what's important to them. And,
8:27
I love meeting with vendors when, when either
8:29
they're swinging through town or those those that
8:32
are local. And in an MSP, that's kind
8:34
of an oddity. Not many vendors get access
8:37
to an internal
8:39
leader
8:40
like this, but I'm you know, I certainly
8:42
am open to it because
8:43
not only is it good for them, but
8:45
it's good for me. Their their ears to
8:46
the ground more than mine is nowadays. And
8:48
they can
8:50
help relate to me what candidates mentioned to
8:52
them as
8:54
what's driving their decisions. And that helps me
8:56
make better decisions as to how to steer
8:58
the program.
8:59
Moving on, I would say clinical compliance is
9:02
gonna be another pillar. And
9:04
this is what, this is what separates healthcare
9:07
from other industries because you're dealing with things
9:09
like licensure and credentialing and competency validations.
9:13
And you can't treat them as administrative
9:16
tasks. They're really in place as patient safety
9:19
guards. And
9:21
adherence to this was
9:23
a little inconsistent when I got here in
9:25
in 2018.
9:27
And any optimization effort you're gonna take on
9:30
that outpaces compliance,
9:32
discipline is gonna introduce risk to the organization.
9:35
Every decision you make, every decision that I
9:37
make
9:38
has to have a patient at the center
9:39
of it. At some point in time, someone
9:41
comes in and takes a look at how
9:43
you're doing things. And
9:44
when it comes to compliance,
9:47
there's no corner cutting with that. You have
9:48
to get it right 100% of the time.
9:51
And a good
9:52
vendor partner is going to take on
9:55
that responsibility.
9:56
And and lastly, I think the fifth pillar
9:59
would be
10:01
this idea that that contingent labor shouldn't exist
10:04
on its own. It's not about external
10:07
labor versus internal labor. You have to align
10:09
this with your internal float pools. Maybe you
10:11
have an internal travel program, other workforce development
10:15
efforts. It really needs to be viewed
10:18
as part of included as part of this
10:20
total
10:22
workforce
10:24
ecosystem. Now when those five pillars are strong,
10:26
then utilizing contingent labor, like I said earlier,
10:29
becomes a strategic lever.
10:31
If any one of them is weak, then
10:33
it's just another liability on your financial statements.
10:36
So and that's really the shift. It's,
10:38
you know, a well run program isn't about
10:41
reducing contingent labor at all costs because a
10:43
lot of people think that, oh, contingent labor
10:45
is way too much. We're spending way too
10:47
much. Let's just get it down to zero.
10:48
It's not about that. It's about using it
10:51
intentionally with discipline
10:54
in the service of,
10:55
I would say, both patient care and and
10:57
organizational
10:58
stability. Is that important?
11:01
And I wanna drill down a little bit
11:02
more on one of the pillars that you've
11:03
mentioned, and you you've touched on it. We
11:05
could have a whole episode
11:07
just on the the vendor relationship and the
11:10
partnership piece of this. But I think especially
11:12
as you've gone through your transition from decentralized
11:15
model to a more centralized approach here to
11:17
a more strategic approach right now, I'd love
11:20
to know
11:21
which partnerships
11:23
have made the biggest impact throughout that whole
11:26
process.
11:28
Absolutely. I I mentioned earlier that shortly after
11:30
I arrived, I went on the hunt for
11:33
a new MSP vendor partner as a key
11:35
element
11:36
that that we needed.
11:38
And,
11:40
again, I came from the staffing world. I
11:43
I was a sub vendor on a number
11:45
of MSPs when I was in health care
11:47
staffing. So I know how they operate. And
11:49
I and I wanted to have
11:51
here at Henry Ford Health, I wanted to
11:53
put in place a vendor neutral
11:54
program.
11:55
And and to accomplish that, I needed a
11:57
partner
11:59
that that operated that way, but had also
12:01
the market credibility
12:03
to attract vendors, not compete with them, and
12:06
to provide a knowledgeable
12:09
support staff to,
12:11
to to the program. This is a human
12:13
resources
12:14
led program, and human resources is all about
12:16
relationships. And a key factor leading to the
12:19
success of this program has been the ability
12:21
of the staff
12:23
that has been provided by, Right Sourcing when
12:26
we selected to cultivate trusting relationships
12:29
across the spectrum of leadership in our organization.
12:32
Again, we didn't have that before rightsourcing came
12:34
on the scene. It was every every person,
12:36
every leader for for themselves. So we needed
12:38
to really,
12:40
really get somebody that can come in and
12:41
help me build it from from the ground
12:43
up.
12:44
What was kind of funny is we were
12:45
going through the RFP process,
12:48
everyone claimed to be vendor neutral. Everyone said,
12:50
oh, yeah. We can do that. We're we're
12:51
vendor neutral. But in a true vendor neutral
12:53
model, the MSP is not gonna be financially
12:56
benefiting from placing its own people.
12:59
Right sourcing is free from that
13:01
structure. They're free from any agency ownership.
13:04
And in health care especially where rate escalation
13:07
can move quickly,
13:09
neutrality helps maintain that discipline without sacrificing speed.
13:13
The the MSP's incentive
13:15
has to be on program performance, not their
13:18
own self placement
13:20
margin.
13:21
The other thing that that I thought was
13:23
going to work and it did work with
13:25
with right sourcing is
13:27
I wanted to get creative. I wanted this
13:29
to be an MSP that wasn't your standard
13:32
cookie cutter garden variety MSP. I wanted to
13:36
explore ways
13:37
to get creative with the vendor panel. For
13:40
example,
13:42
you know, maybe we could have a Michigan
13:44
based
13:45
vendor pool. I like keeping the money in
13:47
the state. It's good for the state's economy.
13:49
The candidates are usually local, and and that
13:51
helps with our own long term recruiting needs.
13:53
And on and on and on we went.
13:55
Sometimes, you know, we like to support,
13:59
small businesses in in our community. Henry Ford
14:01
has always been, about that. And what's
14:05
what's key about that is some of these
14:07
vendors here locally that that that are small
14:10
businesses, they're also our customers. They're coming in
14:12
our front door as as patients in our
14:14
in our organization. So,
14:16
you know, they are part of the community
14:18
that we're here to serve, and I think
14:20
it's our obligation to help support the community.
14:22
So I wanted a vendor partner, an MSP
14:25
partner that could help
14:27
not only help support that, but help me
14:28
pull it off without, you know, biasing against
14:32
any other,
14:33
staffing groups that that were in our panel.
14:36
The other thing I'll say is I think
14:37
neutrality helps increase trust. Our clinical leaders were
14:41
overjoyed
14:42
with
14:43
the understanding that they were going to get
14:47
candidates from a number of vendors, not just
14:49
the one.
14:50
You know, the yeah. They had their favorite
14:52
vendor before, but I was able to tell
14:54
them that, you know what, before you were
14:55
only getting the best that that vendor had
14:57
to offer.
14:58
Now with multiple vendors, you you get the
15:01
best really that's available in the market. And
15:04
and the finance leaders love that, you know,
15:06
we we put the governance in place and
15:09
there was executive sponsorship.
15:11
And, that's that's critical in in health care
15:14
labor programs. I wanted a whole house partner
15:16
and I think I got it because we've
15:18
been able to,
15:20
broaden our partnership with rights sourcing across
15:24
more than just nursing and allied. We've
15:26
we've looked at IT, we've got statement of
15:28
work
15:29
engagements going on. And we're continuing to
15:33
look into,
15:34
the crystal ball to see what labor's gonna
15:36
look like in the next three years and
15:38
how we can, move forward together with that.
15:40
Yeah. You're the sheriff. Right sourcing is the
15:42
deputy on your right hand side. I think
15:44
that's a good way to put it. Yep.
15:47
One of the great things
15:49
about this podcast for me is that I
15:51
get to talk to incredible leaders like yourself
15:54
that are very passionate about this work. They're
15:56
very passionate about the work they do, the
15:58
employees,
15:59
the providers,
16:01
and as you just mentioned, the community as
16:03
well.
16:04
You also oversee the centralized staffing office for
16:07
Henry Ford.
16:08
How does all of this work
16:11
connect for you personally
16:13
to your personal why
16:15
and really that
16:17
purpose that drives you as a leader?
16:20
Great question.
16:21
I you know, for me, leading our MSP
16:24
and really everything I do
16:26
from from my desk connects to stewardship.
16:29
Healthcare resources
16:31
are
16:32
are finite. I mean, let's face it. Margins
16:34
weren't all that great before COVID.
16:37
And since then, you know, margins in this
16:40
business are haven't improved very much, if at
16:42
all. And contingent labor is one of the
16:44
largest and most
16:46
dynamic cost categories,
16:48
in our organization.
16:50
You know, my goal is to is to
16:52
try and manage it as best I can.
16:53
And if we manage it well,
16:56
then then we can preserve dollars that can
16:58
ultimately put back into serving our patients. They
17:00
can go back into innovation. They can go
17:02
back into the communities that, that that we're
17:05
put here to serve.
17:06
I'm further motivated
17:08
by bringing
17:09
clarity to complexity, because everything we've talked about
17:12
so far is is complex.
17:15
We didn't really have a playbook coming into
17:17
this. We kind of created one with with
17:19
the help from right sourcing. But,
17:21
you know, staffing decisions in health care are
17:24
are often made under pressure. And when you
17:26
think about it,
17:28
given the program that I lead, I'm the
17:30
last stop
17:31
on the process
17:32
for a leader. They've already tried hiring
17:35
perm talent. They've looked at our internal flow
17:37
pools.
17:39
Now, oh, gosh, we've got to go contingent
17:40
labor. I better give Ragland a call. And
17:42
I'm the last stop because I'm the most
17:44
expensive stop. Right? And and that's the way
17:46
that's the way it should work.
17:47
So, you know, my role in creating governance
17:50
and transparency,
17:52
you know, I had to convince people that
17:53
that wasn't gonna slow us down. And when
17:55
we get the balance right,
17:57
we're able to support the clinicians.
17:59
We're able to, you know, support and protect
18:02
the organization's
18:03
resources and and really strengthen our entire workforce
18:07
ecosystem. And and when I think about it
18:09
in many ways that aligns with the original
18:11
vision behind Henry Ford Hospital itself which
18:15
opened its doors way back in October
18:17
1915.
18:18
Henry Ford
18:20
himself believed
18:22
that health care should be innovative, and that
18:24
makes sense. He was an innovator.
18:26
He believed it should be efficient, and he
18:28
was all about efficiency.
18:30
And he he wanted it to be accessible,
18:32
especially for hardworking families. He he didn't separate
18:37
operational excellence
18:39
from mission. He saw them as inseparable,
18:42
in fact. And I think
18:44
more than a century later,
18:46
stewarding our workforce
18:48
responsibly is part of honoring his vision, and
18:50
I think we're doing that.
18:53
Absolutely. Much like a model t, still relevant,
18:55
still present, which is so critical. Scott, it's
18:58
so fantastic to have you. Again, thank you
19:00
so much for all of your insights. I
19:01
wanna turn the floor over to you. Is
19:03
there anything else you wanna share? Anything else
19:05
that we haven't touched on maybe that might
19:07
be useful for our audience as we close
19:09
our episode today?
19:10
I appreciate that. I I I would say,
19:13
if if I could offer any advice to
19:16
any health care leaders out there who've never
19:18
stood up, an MSP program or maybe they're
19:20
looking to make sweeping changes
19:22
to theirs like like I had to do,
19:25
when I got here. I would say this,
19:26
you know, start start with clarity before you
19:29
start negotiating contracts.
19:31
Whether you're in a high performance academic medical
19:34
center like ours that has multiple hospitals and
19:36
varying levels of acuity and
19:39
specialty services
19:40
and such. Contingent labor
19:43
isn't just a procurement function that can be
19:46
grouped alongside other supply chain objectives and GPO
19:49
models. Some systems try to do that, but
19:51
I don't think it belongs there in my
19:52
view. It's it's so
19:54
it's so relevant and important and touches patient
19:57
safety and physician alignment and nursing culture and
20:01
financial performance. It really has to be kind
20:03
of on its own. So before you
20:05
before you think about who to partner with
20:07
or negotiating rates,
20:09
define what you want your program to look
20:11
like. Define your philosophy. Is is is contingent
20:13
labor just gonna be a bridge? Is it
20:15
a surge valve?
20:16
Or is it gonna be truly an internal
20:19
structural component? Without that clarity, I think you're
20:21
gonna find
20:23
that you'll
20:24
your program will drift into this transactional churn
20:27
I talked about
20:29
earlier where where it's more reactionary than it
20:31
is strategic.
20:33
And, you know, absolutely invest in governance early.
20:37
You know, local autonomy is going to be
20:39
crucial. Once you get the buy in from
20:41
leaders and and the understanding of the approval
20:44
pathways,
20:45
you're you're gonna be your the program will
20:47
almost sell itself. But, you know, without that
20:49
enterprise visibility,
20:51
your costs are gonna fragment.
20:53
You're gonna have diverging standards across the system,
20:55
and everything will just start to
20:57
to erode. An MSP
20:59
should create alignment. It should create transparency,
21:03
and that'll help you steer clear
21:05
of these potholes. And I would add just
21:06
one more lesson from my experience. Integration
21:09
really, really, really matters. When we entered our
21:13
joint venture with Ascension Michigan, now some eighteen
21:15
months ago,
21:17
our challenge wasn't simply
21:20
merging
21:21
our program to theirs or theirs to ours.
21:23
In reality, the contingent labor program from
21:26
Ascension and the sites we were adding
21:29
was in need of significant stabilization
21:31
itself. And our task really was to integrate
21:33
their hospitals and their vendors and workflows
21:36
workflows into
21:38
the model that we had already built. So
21:40
that meant inheriting all their suppliers. It meant
21:43
validating all their compliance. It meant aligning
21:46
rate structures and making sure that nothing fell
21:48
through the cracks all while being ready to
21:51
provide uninterrupted
21:52
staffing support to
21:54
the Ascension sites right on day one. We
21:56
had to be ready to go. We could
21:58
not have pulled that off if we didn't
22:00
have everything in place
22:02
that we've been discussing here, those pillars that
22:04
I mentioned earlier. Now granted, we had time
22:06
to prepare. We we didn't just wake up
22:07
one morning and and start the joint venture.
22:10
We got ready for it. But experiences
22:12
like that
22:13
reinforce an important lesson. Standing up an MSP
22:17
program is one thing. Designing it though
22:19
so that it can absorb
22:21
complexity and it can scale across organizations
22:24
and remain operational through major transitions. Well, that's
22:27
what truly defines a resilient
22:30
workforce
22:31
infrastructure.
22:33
That's not to say we didn't
22:35
encounter any challenges. There were plenty, let me
22:37
tell you. But the foundational pillars were in
22:39
place that I talked about earlier, and that's
22:41
what allowed the model
22:43
to absorb the complexity. So the test of
22:46
the workforce model isn't how it performs on
22:48
a normal day, whatever that is in health
22:49
care nowadays. It's it's whether it holds together
22:53
during moments of major change, and we we
22:55
experienced that successfully. And if I can, I'll
22:58
just close by bringing us back to what
23:00
I noted earlier about putting patients at the
23:02
center of everything we do. Because in this
23:04
business,
23:06
we have to understand everyone needs to understand
23:08
that excellence in patient care begins long before
23:11
the patient walks in the door. It begins
23:13
with how we lead.
23:15
Scott, it's so great to have you. Thanks
23:17
again for your time and and your insights
23:18
today. What a great conversation. Thanks for being
23:20
here. My pleasure. Thanks again. Appreciate it. And
23:23
we also want to thank our podcast sponsor,
23:25
Rightsourcing by Magnum Global. You can tune in
23:27
to more podcasts from Becker's Healthcare by visiting
23:29
our podcast page at beckershospitalreview.com.