has context menu Compose

Healthcare MSPs: Pros and Cons of Managed Service Providers in the Healthcare Industry

Written by , MSP
January 26, 2024

The healthcare industry has weathered a torrent of supply disparities, space issues, and budget cuts/increases as a result of the changing healthcare climate. However, there is one significant storm that consistently looms on an unchanging horizon — the healthcare staffing crisis. 

The temporary staffing model has been presented as an exigency plan to create dams and banks in an effort to retain current staff and prevent the shortage from flooding healthcare facilities across the nation. 

Healthcare MSPs help healthcare establishments facilitate the flow of contingent staff and the retention of permanent staff. 

So why are some healthcare leaders resistant to their help? Are leaders unaware of the tide of pros and too hyper-focused on the perceived “cons” of healthcare MSPs? 

Let’s discuss the pros and cons of healthcare MSPs, while attempting to reveal why using an MSP for your contingent workforce solutions may not involve the cons some have forecasted. 


Table of Contents


What Is an MSP in Healthcare?

A healthcare managed service provider (MSP) is a company that manages the recruiting and onboarding of a healthcare establishment’s contingent and temporary workforce. 

The goal of a healthcare MSP is to reduce the complexities associated with the contingent workforce while connecting your facility with candidates who will uphold your standards of exceptional care. Instead of managing the labor-intensive and time-consuming process of contingent staffing on your own, you utilize healthcare MSPs to automate labor processes that bog down administrative and HR duties. 

The need for a contingent staffing model in healthcare should not be expected to go away anytime soon. 

While the general economy took a hit during the COVID-19 pandemic, the exodus of workers from the healthcare sector endangered the health and safety of the country. To remedy this, facilities turned to help from the contingent staffing model. However, the dependence on healthcare temporary workers continues to grow. 

In 2022, the Bureau of Labor Statistics (BLS) released a report revealing hospital employment was down to 95,000 employees. As these numbers have slightly improved in subsequent years, experts at the BLS project that the U.S. will face a shortage of almost 200,000 nurses and 124,000 physicians by 2031. The necessary number of home and personal health aids will also increase by 37% as soon as 2028.

The shortage and continued growing need for healthcare professionals has served healthcare facilities with a dire dilemma: throw an exorbitant amount of resources at the problem while juggling multiple staffing vendors alone, or partnering with a healthcare MSP to centralize their contingent staffing.


6 Pros of Healthcare MSPs

According to a 2021 survey, 95% of hospitals reported working with a temporary staffing firm to hire contingent staff. While the need for temporary staff is nearly universal across U.S. healthcare facilities, the contingent staffing industry is significantly fragmented. Nearly 40 staffing firms contribute to 70% of the market for contingent healthcare staffing services. 

Facilities that do not utilize a healthcare MSP often find themselves juggling to work with multiple temporary staffing firms across many different departments. This may leave healthcare facilities with a lack of oversight on contingent labor costs, needs, compliance, and management. 

Healthcare MSPs remedy these contingent staffing concerns by centralizing, optimizing, and managing the entire contingent staffing process from start to finish. 


#1: They Alleviate Administrative Burden

If you are not working with a healthcare MSP to manage your temporary workers, your administrators may bear that burden. 

Healthcare MSPs help streamline contingent workforce-related services, such as:

  • Payroll
  • Invoicing
  • Credentialing
  • Resource planning
  • Temporary workforce management
  • Supply change management
  • Vendor communications

Without a healthcare MSP, your administrators will be expected to service these tasks on top of their current duties like permanent staff recruiting and hiring. 

Healthcare MSPs remove unnecessary burdens so your administrators can address other issues that may affect the staff retention, patient outcomes, and financial performance of your facility. 


healthcare msp pros cons


#2: They Provide Advanced Reporting Capabilities

Staffing agencies alone may only be worried about meeting a facility’s fill rate. 

So when a candidate does not work out and a contract must be canceled, their only concern is getting the next body in to fill the position. Whereas healthcare MSPs like Trusted Managed Services seek to supply facilities with successful candidates. 

Our managed services track cancellations to pinpoint trends and possible solutions. By accessing advanced reporting through healthcare MSPs, facilities may alleviate high rates of contract cancellations. 

Whether high contingent contract turnover is a byproduct of difficulties with management or overly complicated compliance processes, healthcare MSPs work with you to remedy the issue. Out of 40 organizations polled on their satisfaction with the MSP service, less than 5% expressed extreme dissatisfaction with meeting MSP expectations found to curb contract cancellations. 

Trusted Managed Services provides detailed reporting, workforce analytics, and insights, such as:

  • Reporting on spending utilization
  • Staffing headcounts and average bill rates
  • Requisition lifestyle, time to fill, and staff sourcing efficiency
  • Disengagement and termination details
  • Bill rate details
  • Worker quality and survey details
  • Budget to actual details
  • Redeployment
  • Open and pending reacquisitions

Utilize the power of a healthcare MSP you can trust with Trusted Managed Services. 


#3: They Are Free To Use

With all the pros of healthcare MSPs, you may be surprised to learn that their services are free. 

Trusted Managed Services is a healthcare MSP that provides a centralized contingent staffing solution to facilities at no cost to the facility. 

How does this work?

Instead of charging healthcare facilities for their services, Trusted Managed Services charges the staffing vendors in their vendor management system. 


#4: They Offer Recruitment Outsourcing

The contingent staffing market is highly competitive. 

It is a known fact that healthcare facilities are constantly vying to catch the best candidates from a large pool of talent. Recruiters use this opportunity to bait facilities along when they have a highly sought-after applicant. 

By using an MSP, you can avoid chasing after and negotiating with recruiters. Healthcare MSPs like Trusted Managed Services allow you to choose from one large lake of prospective talent as opposed to multiple small, and sometimes shallow, ponds. 

Where some healthcare MSPs may be more removed from the staffing and recruiting process, Trusted Managed Services dedicates each of their facilities to a trusted account manager for recruitment and support. 


pros cons of healthcare msp


#5: They Boost Workforce Efficiency

Workforce efficiency is the keystone of your facility’s quality of care and performance. Without adequate staffing, your workforce cannot operate efficiently. 

Utilizing contingent staff allows facilities to produce a higher level of staffing in the face of a staffing drought. Through this, Healthcare MSPs help boost efficiency by: 

  • Helping your facility meet staffing needs
  • Reducing permanent staff turnover rates caused by burnout
  • Allowing your facility to find the best candidates who meet your workplace culture, standards, and requirements


#6: They Provide Outstanding Customer Care

Healthcare MSPs rely on the satisfaction and success of the facilities they service. 

Without a healthcare MSP, the responsibility and duty of finding quality temporary healthcare workers falls on in-house administrators. This may cause your facilitators and leaders to scramble to meet the ever-changing climate associated with the healthcare employment industry. 

With a healthcare MSP, like Trusted Managed Services, a designated representative will be tasked with each key program area, so even the smallest issues will be quickly and efficiently met with a solution. 

The key areas addressed with our care include:

  • Payroll and billing
  • Credentials
  • Recruitment
  • Insurance
  • Contracting


4 Perceived “Cons” of Healthcare MSPs

Between the healthcare MSP pros and cons, there are more pros — and plenty of (mis)con(ceptions). 


#1: Perception: Healthcare Facilities Have To Pay for MSP Services

With all the pros of a healthcare MSP and limited cons, many healthcare leaders assume it must be too good to be true and ask, “What’s the catch?” 

There isn’t one. 

Healthcare MSPs come at no cost to healthcare facilities. 


Reality: MSPs Are Funded By Vendors

As we mentioned earlier, healthcare MSPs do not charge facilities for their services. We charge the vendors a 3-5% rebate percentage from their bill rates. 

Furthermore, healthcare MSPs help facilities save money. By reducing staff turnover rates, MSPs can save $28,500 to $51,700 in average turnover costs per nurse. 

MSPs also help healthcare establishments save on recruitment costs. From entry to senior recruitment levels, the cost and time to fill rate is, on average, $2,167 to $5,699 and 84 to 207 days. If your facility needs to fill multiple positions in a limited time and on a budget, contingent staffing may offer a solution that better meets your needs while you slowly find permanent staff. 

Healthcare MSPs also help you track and negotiate vendor rates so you keep your contingent staff budget reigned in. 


#2: Perception: MSPs Don’t Benefit Smaller Facilities

No matter the size of the healthcare facility, one thing is universally true — as healthcare professionals of all levels, your time and resources are invaluable. 

Internally managing a contingent staffing solution requires a lot of time, personnel, and resources that could be better spent on improving the facility’s standards, outcomes, staff-to-facility relations, and more. 


Reality: MSPs Are Scalable and Customizable

Quality MSPs, like Trusted Managed Services, are designed to meet the specific needs of each facility’s contingent staffing requirements. 

Our healthcare MSP will scale with the varying obstacles and growth faced by your facility. It is a guarantee that when you work with us, we will help you create a customizable contingent staffing strategy that fosters growth and success within your facility. 


pros and cons of healthcare msp


#3: Perception: Integrating MSPs With Existing Software Is a Manual, Time-Consuming Process

Healthcare MSPs give healthcare leaders back their time at a fraction of what it takes to integrate your process with existing MSP software. 

Three examples of how MSPs help your administrators and recruitment managers save time include:

  1. Instead of conducting recruiting operations on multiple platforms, healthcare MSPs allow you to handle contingent staffing from one place. 
  2. Where your administrators would have to sort through compliance processes and paperwork themselves, healthcare MSPs take over credentialing and compliance enforcement. 
  3. While your healthcare employment leaders are negotiating with recruiters and managing contingent onboarding, they could be shifting their focus toward improving workplace conditions and efficiency.


Reality: Integration Is Performed By the MSP Provider

Trusted Managed Services handles all MSP software integration offsite. 

This means that once you agree to work with us, your hands will be free to turn to other matters as our team begins the seamless software integration process. 


#4: Perception: Outsourcing to an MSP Means Decreased Operations Visibility

Often healthcare executives fear that when you outsource a step in any process, you lose oversight. However, many healthcare MSPs are constructed to provide detailed insight that facilities may not be able to uncover alone. 


Reality: MSPs Enhance Vendor Forecasting and Optimize Cost Management

Trusted Managed Services believes in the success and partnership with healthcare establishments. For healthcare MSPs to be trustworthy, they have to be honest, which is why we provide a full 360-degree view of all of our processes. 

We encourage the flow of information between our services and clients, which is why we provide insights so facilities have a clear comprehension of:

  • Reporting on spending utilization
  • Staffing headcounts and average bill rates
  • Requisition lifestyle/time to fill, staff sourcing efficiency
  • Disengagements/termination details
  • Bill rate details
  • Worker quality and survey details
  • Budget to actual details
  • Redeployment
  • Open and pending reacquisitions
  • And more


Trusted Managed Services: Our Comprehensive Healthcare MSP Takes the Hassle Out of Hiring Contingent Staff

While facilities may prefer to not rely on contingent staffing, it undeniably has been the ark that has carried the healthcare industry through the tempest. 

Avoiding the temporary staffing model is nearly impossible, and attempting to sail through the process in-house takes too much time and resources. Healthcare MSPs are the solution that keeps your contingent staffing process afloat while your administrators focus on facing other conditions and issues in the industry. 

With a fleet of over 18 vendors, our MSP solution provides a centralized well of talent that is sure to:

  • Fill staff vacancies as they crop up
  • Provide an in-depth analysis for informed decision-making
  • Enhance your facility’s financial performance
  • Support your permanent staff for better patient outcomes and higher retention rates
  • And more

Time and resources are valuable when it comes to the care and treatment of your patients, clients, and staff. 

Let the professionals at Trusted Managed Services use our expertise to guide your healthcare facility through whatever the future brings. Request a demo today. 


pros cons of healthcare msp

Next Read

Healthcare Workforce Trends
April 15, 2024

Controlling Labor Costs in Healthcare: Tips for Improving Medical Facility Profitability

As a healthcare administrator nearing the end of the fiscal year, you’re facing a major challenge. Labor costs have skyrocketed, and the amount of staff leaving due to burnout exacerbates the situation. Finding effective solutions to curb the rising labor expenses has become your top priority. The healthcare industry is grappling with significant changes in […]

Read the article
Healthcare Workforce Trends
March 26, 2024

Flexible Staffing in Healthcare: How Utilizing an MSP Can Simplify the Contingent Healthcare Staffing Process

Staffing shortages have transformed the healthcare landscape into one that has to rely on more than traditional staffing models.  The growing reliance on alternative staffing solutions has presented a situation where the traditional staffing model is insufficient in the current healthcare climate.  Flexible staffing models have emerged and evolved to handle how care is provided […]

Read the article
Healthcare Workforce Trends
March 19, 2024

The Top Compliance Issues in Healthcare and How an MSP Can Help Facilities Ensure They Meet Regulations

A culture that nurtures and enforces compliance is a necessary condition for healthcare organizations.  Without compliance regulations and guidelines, facilities would face scrutiny regarding their operations and quality of care. The result would be a catastrophic and system-wide failure to protect the health, safety, and rights of patients and staff.  Compliance relies on its leaders […]

Read the article