Wednesday, November 18, 2009

Hospital Recovery Appears V-shaped There have been some positive articles in the last couple of weeks suggesting that the financial health of hospitals is improving. Health Leaders Media is reporting that hospitals are not only recovering but showing signs a 'V' shaped recovery (one that both declines and recovers quickly). "There has been an improvement at the hospital level that has allowed them [hospitals] to ease up on the cost containments," he says. "To the extent that they can, hospitals do not want to get caught not operating at appropriate levels in terms of staffing because that is going to hurt them in the long run. Job growth may not come back to historical levels, but over the next 12 months it will definitely be up from what we have seen through much of this year." Of course, the only thing to be leery of when predicting 'V' shaped recoveries is that the prediction is too early and in fact, what we're seeing is a 'W' (an economy that declines, recovers and declines again). There are several predictions being thrown around in regard to the healthcare staffing industry and the 2010 economic outlook. Hopefully this won't be the case. Reading about specific regions, such as Texas, also seeing signs of hospital recovery is also good news. The percentage of hospital revenue left over after regular business expenses increased from zero in the third quarter of 2008 to 4 percent in the second quarter this year. In Texas, the proportion increased from 6 percent to...
Hospital Acceptance of VMS and MSP Models Predicted to Continue Steady Growth Earlier this year the Staffing Industry Analysts (SIA) put out a report suggesting that 50% of buyers (hospitals and health systems) in the healthcare staffing industry now manage their agency usage through a VMS or MSP model. In an earlier blog post I discussed this in more detail and showed that more hospitals are choosing a vendor neutral VMS technology solution than they are an agency led MSP model. Yesterday, the SIA released another report suggesting that by 2011, 93% of healthcare buyers in the U.S. will be using a VMS or MSP. The numbers come from a survey they did of 171 healthcare buyers. The survey results also suggested that the breakdown of these accepted offerings will be: 55% MSP 42% VMS According to my estimates of hospitals using a VMS or MSP model, the 50% current adoption is probably pretty close to accurate. This adoption of VMS by hospitals is up 24% from last year according to the SIA. The SIA is partially basing their prediction of a jump to 93% in 2011 based on a similar growth pattern from the previous two years. However, I don't think this jump is accurate because I think there previous year (2008) estimate of 24% was much too low. Further, in terms of the number of hospitals, the vendor neutral VMS technology model has been much more widely accepted than agency MSP offerings. Therefore, I don't see how in two years the MSP model will overtake the VMS model by 13%....

Jason Lander

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