Presented to

MRRNMarch 12, 2008

by

The American HealthCare Services Association

AHSA . 10126 E Cherry Bend Rd . Traverse City . MI . 49684 . 800-784-1975 . www.ahsa.us

The Association - An Introduction

The First and Only National Vendor Management Association in the U.S.AHSA is a Member Medical Facility Association, Representing the Member Facility (AHSA is not a Staffing Agency)

Traditional Staffing Model

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• High Fixed Costs

• Redundant

• Inefficient

• Confusing

• Labor Intensive

• Cumbersome Communication

Physician Recruiting

Allied Health Recruiting

Nurse Recruiting

Medical Office, IT, Finance/ Accounting Recruiting

AHSA Model

Facility interfaces with only one dedicated service representative

Available staff resources are multiplied exponentially

More cost effective

More simple

Streamlined communication

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AHSA Member Facility

Overview

The Staffing Dilemma and Industry Trends

Physician Staffing - Particularly

The Association

The Staffing Dilemma

Why?

Expected Increase in Demand for Health Care Services

Largest “Aging” Population in U.S. History

Smaller Age Cohort from whom to Draw in the Future

Other, more Attractive Opportunities Available

The Staffing Dilemma (continued)

Why (continued)?

Poor Reimbursement and/or Net Practice Income Down

Malpractice

Overall Population Increase

Staffing Dilemma (continued)With the Current Staffing Shortage, Many Types of Staffing Companies have

Emerged

While Attempting to Help, this has Further ‘Fragmented’ the Workforce

Driven Direct and Admin. Costs much Higher

Put Hospitals into Direct Competition with Agencies for Same Staff in

Many Cases

Staffing Dilemma (continued)

Hospitals Continually Cite “Agency” Solicitation as a Primary Disruption to

Daily Operations

Interferes with Core Patient Care Issues and Permanent Recruitment

Efforts

Staffing Dilemma (continued)

More Health Care Professionals are Choosing “Off-staff” Careers via Staffing

Companies

Based on Cross-industry Publications, this Trend is Expected to Grow

Significantly

Staffing Dilemma (continued)

With Unprecedented Agency Competition, Quality of Staff being provided

has Declined in Many Areas

Labor Represents the Single Largest Expense Category for Medical Facilities

Approx. 55% of Total Budget per Recent AHA Data

U.S. Industry Trends

Overall Temporary Staffing Market Value

1990 = $17 billion (est.) 2007 = $73.5 billion (est.)

Temporary Agencies are 2nd fastest growing industry in U.S.

Health care staffing industry valued at est. $20.5 billion

U.S. Industry Trends (continued)

1 in 8 Americans, will be age 75 or older by the year 2050

Shortfall of RNs in 2020 projected to be 800,000

U.S. Industry Trends (continued)

Locum Tenens industry valued at est. $4 billion

Compared to only est. $500 million in 1997

Shortfall of Physicians in 2020 projected to be 200,000

Even with 15% increase in medical school enrollments

U.S. Industry Trends (continued)

Per one recent Physician Poll

70% of physicians predict a severe shortage in 5-10 years

50% of physicians are contacted by recruiters 1-3 times every month

U.S. Industry Trends (continued)

Per U. S. Bureau of Labor, # of Physician Jobs

2005 = est. 727,000

2010 = est. 887,300

2020 = est. 964,700

Physician Staffing

Types

Retained: A recruitment firm that usually requires an up-front fee or

monthly fee installments from a hospital/practice before the physician

is placed

Contingency: A recruitment firm that is not paid by the hospital or

practice until a physician is placed

Physician Staffing (continued)

Types (continued)

In-house: A department run by the medical facility itself that handles

all recruitment for their own organization

Locum Tenens: A recruitment firm that provides short-term or

temporary placement of physicians

Physician Staffing (continued)

As of 10/05, about 1/3 of practicing physicians utilized recruitment

firms to help them with their job searches

While the Locum Tenens concept is only approx. 30 years old

Demand has grown by approx. 800% in past 10 years

Physician Staffing- Locum Tenens

Locum Tenens. What does that mean?!

“Lots of Telephone calls from staffing companies”

Actually means,

“One holding the place (of another)”

More simply put,

“A Physician who substitutes temporarily for another”

Locum Tenens (continued)

Average Locum Tenens assignment length today is 4-6 Weeks

Compared to 1-2 Weeks 2 Years Ago

Largest proportion of Locums workforce today

Those physicians with 11 or more years of practice experience

Locum Tenens (continued)

Top specialties where Locums utilized

anesthesiology, radiology, psychiatry, cardiology, gastroenterology,

dermatology, pediatrics, general surgery, pathology, emergency

medicine, orthopedic surgery, oncology, hospitalists

Locum Tenens (continued)

Why might I utilize Locums?

Bridge gap when trying to fill permanent positions

Call coverage

Coverage for CME, vacation, medical leave, maternity leave, military service,

illness

Locum Tenens (continued)

Why might I utilize Locums (continued)?

Test new market service lines

Provide for peak coverage times (flu season, tourist season, seasonality)

“Time Off” has become an important perm. recruitment and retention tool.

Now what?

Locum Tenens (continued)

Why else might I utilize Locums?

To avoid closing a unit

To avoid scaling back procedures

To avoid needing to divert patients

Locum Tenens (continued)

Why else might I utilize Locums (continued)?

To meet access to care requirements and community expectations

To reduce stress on over-burdened staff

To help assure patient satisfaction

Locum Tenens (continued)

Is Locum Tenens Cost Prohibitive?

All revenue generated by the Locums belongs to the hospital/practice

Revenue is lost without physicians in place and it also results in a lack of service

for the community

Locum Tenens (continued)

Is Locum Tenens Cost Prohibitive (continued)?

Utilizing a Locum physician may seem costly; however, it may be more costly if

you don't

“Locum Tenens utilization can cost more, but it's less expensive than watching patients go

elsewhere” say many of those in charge of staffing hospitals and groups

Locum Tenens (continued)

The “Pro’s and Con’s”

Locum Tenens (continued)

The “Con’s”

Cost

Unfamiliar with Practice

Learning Curve with Equip. and Procedures

Locum Tenens (continued)

The “Pro’s”

Maintain Continuity of Care

Prevent Loss of Revenue

Immediate Availability

Prevent “Burn Out” of Staff Physicians

Recruitment, Advertising, Pre-screening, Placement Services

Cost

Locum Tenens (continued)

What types of sub-services do I get for the cost?

Recruitment Search

Primary source verification of education and training

Verification of any advanced certification and work history

Current standing with any specialty boards

Status of all medical licenses

Locum Tenens (continued)

What types of sub-services do I get for the cost (continued)?

Investigation of any pending or past malpractice cases filed

Review of any disciplinary actions

Speak with 4 to 6 professional references that have worked with

physician within past 2 years

Review privileges with any medical institutions

Locum Tenens (continued)

What types of sub-services do I get for the cost (continued)?

Set up phone introduction/interview

Initiation of licensing with state boards if not already in place

Coordination of travel, housing, transportation, etc.

Facilitation of any “on assignment” issues if arise

Post assignment evaluations

Locum Tenens (continued)

Why do Physicians choose to do Locums work?

Practice on a part-time basis

Flexibility in work schedule

Reduce administrative responsibilities

To travel

To pursue other interests

Locum Tenens (continued)

Why do Physicians choose to do Locums work (continued)?

Experience a different practice setting

Semi-retire

Increase income

Evaluate/ “try out” different post-residency options

Locum Tenens (continued)

Aren’t most Locums those physicians with “red flags”?

Physicians who are not clinically competent or are “running from

something” are less apt to do Locums work

Re-credentialed each time they go to a new facility

Subject to same internal credentialing for obtaining privileges

Evaluated by 2 separate entities – staffing company and facility

Subject to scrutiny by the other physicians once on the job

Locum Tenens (continued)

If a need arises, what can I do?

Antiquated Staffing Model

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Physician Recruiting

Allied Health Recruiting

Nurse Recruiting

Medical Office, IT, Finance/ Accounting Recruiting

AHSA Model

Consolidation = Efficiency

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AHSA Member Facility

Association Benefits

Complete Agency Contracting and Vendor Management

Single Point-of-Contact Staffing Operations

Dedicated AHSA Representative – MSR

Association Benefits (continued)

Significant Reduction in Ongoing Agency Solicitations

Broadest Scope of Services Available

Simple to Implement and Use

Association Benefits (continued)

Comprehensive Staffing Resources of More than 170 Top Agencies

Improved Staff Quality

Significant Time and Administrative Savings

Consolidated Invoicing Process

Association Benefits (continued)

Powerful On-line Staffing Tools

A “Safety Net” that is Always Available as Things Change

Proven Solution, with More Michigan Facilities Selected than any other VMS

Currently Serve More Than 70 Medical Facilities in 13 States

MRRNand the

American HealthCare Services Association

Thank you for your time today…

AHSA . 10126 E Cherry Bend Rd . Traverse City . MI . 49684 . 800-784-1975 . www.ahsa.us