HR Technology: Hospital group streamlines staffing process

By Drew Robb Feb 1, 2004
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HR Magazine, February 2004 Web-based service helps hospital group manage temporary nursing procurement.

Companies have procurement software to manage their suppliers. They have human resource management systems (HRMS) for their employees. But between those groups lies a large and growing gap: Many companies are becoming dependent on temporary employment agencies to fulfill their short-term staffing needs, yet these organizations don’t quite fit into either the usual supplier or employee categories. The inability to effectively manage this zone leads to wasted staff time, a lack of financial prediction and overpayment for services.

“There is a nursing shortage, and each of our facilities was responsible for its own staffing needs,” says Mark Raketich, director of temporary services for the University of Pittsburgh Medical Center (UPMC), a hospital consortium headquartered in Pittsburgh that serves the city and 29 surrounding counties. “We would have two of our hospitals bidding against each other for the same nurses, and this kept driving up rates.”

Companies can address such problems with services procurement software. For example, UPMC cut its staffing costs, reduced administrative time and hassles, and improved the quality of its contingent nursing staff with Denver-based IQNavigator Inc.’s IQNavigator5.

Strength in Numbers

With 35,000 employees, 20 hospitals and a $4 billion annual budget, UPMC is both western Pennsylvania’s largest health care provider and its biggest employer. Each facility was responsible for its own temporary staffing using outside agencies.

“We determined that we needed to pool our resources and respond as a system, rather than competing with each other,” says Raketich.

He identified goals that UPMC wanted to achieve:

  • Get better rates. The hospitals were establishing their own agreements with more than 20 different agencies in the region. Although the UPMC hospitals together accounted for half the hospital beds in the area, the fragmented procurement procedures meant that the consortium wasn’t getting the best temporary staffing rates. By reducing the number of agencies and negotiating as a single entity, UPMC could command lower rates.
  • Reduce the administrative burden. Automation could cut down on the time that hospital staff responsible for procuring the nurses and paying the agencies spent verifying time sheets and invoices.

In addition, one other problem soon became apparent. “As we were putting together the [request for proposals] for this consolidation, we found we did not have a handle on what we were spending on a systemwide basis,” says Raketich.

No single agency could supply all the hospitals, but UPMC wanted to reduce the number from two dozen to five or six. After further examination, UPMC decided to implement a two-tiered system consisting of five primary and five secondary vendors. This led to a search for software to manage the approved vendors.

“The only way to facilitate a tiered system and control it was to have a vendor management system,” Raketich says.

He and representatives from purchasing and accounting considered several options for achieving these goals. One was to tie into the software one of the staffing vendors used, but this was quickly rejected. While easy enough to set up, such a system would have locked the hospitals into using that particular vendor, rather than giving them the flexibility to negotiate the best deals with several vendors. It would also mean replacing the system if they switched vendors.

UPMC then evaluated several commercial software packages before deciding to go with IQNavigator. “IQNavigator offered a solution that would work for nursing while also giving us the ability to expand into other functional fields,” he says.

Six-Week Setup

Another deciding factor was ease of implementation: IQNavigator was able to get the software up and running within six weeks, including establishing the procedures and training staff. This was possible because the software is provided as a hosted web service. Nothing had to be installed on either UPMC’s or the agencies’ networks. No servers had to be set up and there was no additional work for the information technology (IT) staff. Users simply need an Internet connection and browser.

This application service provider (ASP) model, in which companies rent software hosted on someone else’s servers, functions well for certain specialized applications, particularly when those applications are only used by a few people in the company. It is more economical in such a case to pay a monthly fee than to purchase and administer a complex, costly package.

It also makes sense to outsource temporary staff procurement software since there are few people in the company who need to use it. It is inefficient to buy the software and the servers and train the IT staff to support such a specialized application.

IQNavigator develops its own software using Java2 Enterprise Edition running on the WebLogic Platform from San Jose, Calif.-based BEA Systems Inc. The databases are Oracle 9i. Everything is installed on Santa Clara, Calif.-based Sun Microsystems Inc. servers running the Sun Solaris operating system. IQNavigator only offers one version of the software, which cuts support costs. Customers pay nothing up front, even when added features are needed. Instead, IQNavigator generally takes 1 percent to 2 percent of the fees its customers pay to employment agencies.

“We don’t customize the application for individual customers, but we add functionality to the core application,” says John Martin, IQNavigator’s senior vice president for corporate and product strategy who oversaw the UPMC implementation. “UPMC needed a tiered supplier structure, so we added that to version 5.3 of our application and all our customers can use it.”

Other changes were necessary to accommodate the hospitals’ heavy workload. Typically, IQNavigator’s customers schedule contingent employees for IT, finance, manufacturing or clerical jobs several months at a time. But that is not how nursing staffing goes.

“Systemwide, UPMC may have 500 temporary nurses at a given time, some of them working a single shift for one day,” Martin says. “They generate thousands of work orders per month.”

So, IQNavigator also added filtering tools that make it easier for both the hospital and agency staff to find a particular job request, rather than having to scroll through the hundreds of outstanding orders.

Managing Change

After selecting IQNavigator as its supplier, UPMC assembled a work group consisting of representatives from each of the hospital facilities. This group established uniform procedures that could be applied across the consortium, but were still flexible enough to meet the hospitals’ individual staffing challenges.

“We went to a lot of meetings to get the preliminary setup that we were looking for,” says June Hanecek, administrative assistant to the senior vice president of patient service at McKeesport Hospital, who represented that facility on the work group.

Setting up IQNavigator to accommodate UPMC’s needs took about four weeks. Training staff and implementing the system at 13 UPMC facilities took another two weeks. The scheduling personnel for each hospital attended two four-hour training sessions on the software—one for those responsible for approving time cards and another for executives on generating reports.

The hospital personnel then had to input all their temporary nursing needs and note any that were already covered. The approved agencies, which also have access to parts of the system, input the resumes, scans of licenses and other information on their nurse pool. They can do this either in bulk by importing a spreadsheet or manually one at a time.

When the system went live in May, Raketich and IQNavigator support staff went out to each hospital to provide on-site support. One of the main problems was just getting people to start using the system rather than their usual phone and fax methods.

“It was a challenge getting people to input the requisitions and then wait for the agency to submit the candidates,” says Raketich. “We had to stress that it was not a substitute for the phone; they can still call the agencies in an emergency or to check on the status of a work order.”

But once they did get used to it, the new system made the job simpler.

“We can get on the phone when we need to, but we are not constantly getting faxes like we used to,” says Hanecek.

Hanecek enters the requisitions for her hospital once a week. It originally took her about an hour, but recent improvements to the system have cut that down to about 15 to 20 minutes. At that point, an e-mail message goes out to the first-tier suppliers telling them to check the job marketplace for the new listings. If a job is not filled 24 hours before the nurse is needed, the system sends notices to the second-tier suppliers. The staffing coordinator goes into the system, looks at the nurses proposed by the agencies, checks their qualifications and licenses, and then selects which one to use.

“Before, we would have to call the agency and have them fax over copies of the licenses,” says Hanecek. “Now we can look at them online and print them out.”

Quality and Savings

IQNavigator’s matching software pulls up the nurses who are most qualified for a particular duty. The system also contains evaluations of the nurses from other UPMC hospitals so that an unqualified nurse can’t hop from one hospital to another—or one agency to another—and still get hired.

The selected nurses then record their hours either using an interactive voice response system or by logging into IQNavigator. However, Raketich is exploring creation of a feed between IQNavigator and UPMC’s timekeeping system so the nurses can enter data into IQNavigator with a swipe of their time cards.

Once a week the agencies submit their invoices to IQNavigator, which sends Hanecek a spreadsheet containing detailed information as well as a summary invoice designed to match UPMC’s disbursement form. She verifies the invoice and transfers the information to the disbursement form, which she forwards to accounts payable. That department cuts a single check to IQNavigator, which then pays the agencies.

“The time I spend on the time card approval process has decreased by 75 percent,” says Hanecek. “It’s a huge savings.”

Raketich notes that UPMC’s use of IQNavigator is still a work in progress. The speed of the system has improved since the consortium started using it, but it is still not up to where it needs to be. Nevertheless, using it has saved UPMC money, particularly on negotiated rates.

“By pooling our scheduling, we have been able to garner the most aggressive bill rates we could from our primary and secondary tier vendors,” says Raketich. “Within the first couple weeks after implementation we had already achieved a return on our investment.”

Drew Robb is a California-based freelance writer who specializes in technology, engineering and business.

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