Contractors in Healthcare: Do You See Your Independent Workers?

Creating visibility across your independent workforce can avoid significant risks to your healthcare organization.

By Scott Stone, Senior Director, Global Solutions, KellyOCG

A complex supply chain and reliance on a wide variety of roles from clinical to IT means that healthcare organizations depend on a vast network of independent workers, temps, SOWs, and freelancers. But just how do organizations keep sight of this diverse talent community and what are the risks of losing control?

Many of the hospitals across the US use an MSP (Managed Service Provider) to oversee their independent workforce. As I mentioned in my previous blog, some 70% of hospitals rely on them to manage their contract labor. These may be run in conjunction with a VMS (Vendor Management System) that can help to automate the processes involved in finding and engaging contract workers. However, these systems are often being delivered by a number of service providers across a range of silos – from key clinical roles to custodial functions and IT –  meaning it can be tough for healthcare organizations to get a grip on who is doing what, where. This complex scenario leads to a lack of workforce visibility and comes with a range of risks.

Misclassification of Employees

Lack of visibility leads to mistakes, and mistakes lead to misclassification. Misclassification of employees not only creates a headache for your procurement function, it can leave your healthcare organization open to fines and back payment claims from the Department of Labor or IRS. And it doesn’t matter if the misclassification was a result of human error – you will still face the same financial penalties.

Wage Claims

Determining whether a worker should be properly classed as an employee or contractor within your healthcare organization is challenging. It is further complicated by the fact that the federal government, state government, and various government agencies all have different tests to determine if someone should be treated as an employee. Failing to keep sight of your contractors and their roles and responsibilities could see you facing a wage claim for failure to pay overtime and minimum wage.

Financial Risk

One of the most pressing problems for healthcare organizations who lose sight of their independent workforce is the very real possibility that they are overpaying for talent. This may be because a contractor has entered the business to work on one assignment and been kept on to tackle a different task when talent could be sourced more cheaply elsewhere. It could also be because you have asked a supplier who specializes in one area to source outside of their comfort zone. This is something I see in many of the life sciences and healthcare organizations I connect with, where proper control and visibility can save clients as much as 15% on their talent bill.

So, how do healthcare organizations improve visibility across their independent workforce and ensure they are spending the right amount on talent? For me, it comes down to engaging a talent provider who can offer a full end-to-end process and provide detailed analytics that go beyond the usual KPIs and SLAs. It’s about partnering with an MSP who delivers consistency, visibility, and insight.

The independent workforce is set to grow in healthcare as ongoing staff shortages drive providers to connect with vital talent in new ways. Healthcare organizations must be ready and able to engage this new generation of workers, creating smarter systems and processes to reflect the diversity of the evolving talent pool.

To discuss this topic further with the author or to learn more about our life sciences and healthcare expertise, contact us today.