CHCF NOVEMBER 2021 INNOVATION LANDSCAPE SERIES Solving Shortages: How Technology Can Help Meet California's Immediate Health Workforce Needs programs and providers that serve Californians with low incomes, faces unique challenges in recruiting and maintaining its clinical staff due to work- force shortages and inequitable distribution of health care providers across California. To address these short- ages, many health care systems serving patients living on low incomes turn to the temporary workforce to fill their needs. Staffing agencies play an important role in sup- porting these health care organizations with recruitment, given that many have few resources to maintain a tem- porary provider pool or a sizeable human resources (HR) department. In recent years, technology-enabled staffing Te health care safety-net system, a patchwork of services have emerged and addressed some limitations of traditional staffing agencies, including limited trans- parency and high cost. This paper reviews the barriers to hiring providers in this specific sector of the health care system, the role of the temporary workforce, and the emergence of technology- enabled staffing companies as a potential alternative to traditional staffing agencies. This landscape analysis is intended to inform investors and entrepreneurs invested in or working on these issues to help them understand the unmet needs and opportunities ripe for tech-enabled innovation. It is also intended to help provider organiza- tions encountering these challenges to understand the emerging class of technology solutions that may meet their needs. To understand the recruiting and HR needs of safety- net organizations, the authors conducted a literature review, interviewed five leaders of technology-enabled staffing companies, and talked with HR executives from 13 safety-net organizations. Among the HR executives, seven were hospital leaders (either county hospitals or private nonprofits) and six were executives at multisite clinics. Six of the organizations are located in the Central Valley, five in Southern California, and two in Northern California. While this sample size is small, the organiza- tions represent a range of size and location (geographic, and rural vs. urban), as well as varying degrees of tem- porary workforce needs, and thus provide information likely applicable to the workforce recruitment practices and experiences of similar organizations throughout California. The data for this paper were collected before the COVID-19 pandemic. The impact of the pandemic appears to have increased the need for temporary work- ers. Although there are limited data, initial reports and interviews conducted for this paper indicate that the use of temporary workers has increased. One recent study of traveling nurses found that at the height of the pan- demic, job postings for temporary nurse positions had tripled and increased faster in places facing extreme pandemic conditions.' While it is still early to predict last- ing changes, the COVID-19 pandemic highlighted the continued importance of the temporary workforce in the delivery of health care. About the Authors Joanne Spetz, PhD, is director of the Philip R. Lee Insti- tute for Health Policy Studies and is a health economist whose fields of specialty are the health care workforce, organization and quality of health care services, and the evaluation of health care policy and programs. She has conducted studies of the registered nurse, nurse practitioner, and long-term care workforces for nearly 30 years. Amy Quan is a research analyst at Healthforce Center at UCSF and works on a variety of projects related to the health workforce, researching professions such as registered nurses, physicians, nurse practitioners, and community health workers. She is a master of public health candidate at UC Berkeley. Background: Workforce Shortages in the Safety Net Workforce trends nationwide point to a growing shortage and inequitable distribution of providers. In California, the shortage of primary care providers (physicians, nurse practitioners, and physician assistants) is expected to become worse over time, with some regions expected to face greater shortfalls than others.? While the supply of registered nurses (RNs) is actually projected to be slightly higher than demand through 2035, some RN job catego- ries are projected to experience shortages, especially for experienced nurses who work in clinical specialties such as critical care, emergency, and perioperative nursing.? These shortages and the inequitable distribution of the clinical workforce are most acute in rural areas and in the safety net. A number of factors make it particularly challenging to recruit providers; these factors fall into four main categories as detailed in Table 1: professional, sociocultural, structural, and workplace. Over the long run, there are many strategies that gov- ernment organizations, training institutions, and even safety-net organizations can take to address workforce shortages. (For more information on recommended work- force strategies, see the 2019 California Future Health Workforce Commission report). However, the need to address the challenge is immediate, and utilizing the temporary workforce is a common short-term solution. Leveraging the Temporary Workforce Leveraging contract or temporary providers can serve as a stopgap measure that enables health care facilities to maintain consistent levels of staffing when care teams are lean, such as when there are unfilled vacancies, staff absences, turnover, or during high-census periods when patients outnumber staff available to provide services. Doing so can reduce the risk of staff burnout and ensure consistent quality of care.4 The temporary workforce also allows health care facilities to maintain their patient vol- umes, which can reduce revenue losses when faced with a shortage of providers. There are models for leveraging temporary RNs and tem- porary physicians and advanced practice providers. The three main models for temporary RNs are (1) an internal per diem pool maintained by the health care organiza- tion, consisting of employees who do not work a regular schedule and who are called to work directly by the employer; (2) agency-employed temporary nurses, who are assigned to single shifts or short-term assignments for multiple shifts; and (3) traveling nurses, who are agency- employed and assigned for longer periods of time (typically a minimum of 6 weeks, and often 13 weeks). Physicians, nurse practitioners, and physician assistants in the temporary workforce are usually employed through agencies as "locum tenens:" temporarily for a few shifts or for an extended period. Table 1. Characteristics of Rural Practices and the Safety Net That Contribute to Provider Shortages PROFESSIONAL SOCIOCULTURAL STRUCTURAL WORKPLACE » Greater breadth and depth of medical knowledge required due to scarcity of in-house subspecialists » Fewer career opportunities for spouses/partners > Challenges with work-life balance » Professional isolation > Community expectations that extend beyond clinical role » Lack of role models and mentors » Cultural barriers and language differences » Fewer clinical education and professional development opportunities » Fewer social and cultural opportunities in the community » Limited financial resources > Lack of clinical infrastructure {e.g., lack of administrative and clinical support, resources, and equipment) for recruitment due to dependence on patients who are more often uninsured > Heavier workloads High demand for care due to demographics of safety- net and rural populations and retirements in the current aging workforce > Greater bureaucratic demand {e.g., higher Medicare and Medicaid populations and associated required paper- work) Transportation and » Lower pay than urban, accessibility challenges Pay private hospitals Sources: Ines Weinhold and Sebastian Gurtner, "Understanding Shortages of Sufficient Health Care in Rural Areas," Health Policy 118, no. 2 (Nov. 2014): 201-214; and Xiaoming Zhang et al., "Physician Workforce in the United States of America: Forecasting Nationwide Shortages," Human Resources for Health 18, no. 1 (Feb. 6, 2020). California Health Care Foundation www.chcf.org 2 The use of a temporary workforce is increasing overall, and in the health care sector in particular, it is used to meet the needs of people who are underinsured and/ or living with low incomes. A complementary publica- tion to this brief (Solving Shortages: A Snapshot of the Temporary Workforce in California's Safety-Net Hospitals and Clinics [PDF]) presents statistical information on the use of temporary workers in hospitals and clinics in Cali- fornia. The analysis indicates that safety-net hospitals are more likely to utilize temporary RNs, and of those safety-net hospitals that use temporary RNs, most are in rural areas or are critical access hospitals.> Safety-net clinics are more likely to utilize contract or temporary advanced clinical providers, like physicians, than other types of contract providers, including RNs. Further, the top quartile of safety-net clinics that use contract provider full-time equivalents utilize the vast majority (96.3%). These findings are generally supported by pub- lished literature. One study found that on average, one- third of Federally Qualified Health Centers (FOHCs) in the US utilized temporary providers between 2013 and 2017; 59% of these health centers were large FOHCs and 39% were located in rural areas.° It was estimated that 45,155 RNs worked in temporary positions in 2019 and that this number would grow 10% to reach 49,637 by 2025 across the US.' In 2018, 2.7% of RNs living in California reported that they worked with a temporary or traveling agency for their primary job.® The Role of Staffing Agencies in Recruiting Temporary Workers Data and interviews suggest that many safety-net and rural facilities rely on staffing agencies and recruiters to assist with the hiring of temporary providers due to those facilities' limited scale, resources, and administra- tive personnel. Staffing agencies are search-and-recruit firms that help to match candidates and open positions. Health care organizations less able to maintain an inter nal pool of nurses, physicians, and other providers may call on a staffing agency to coordinate the recruitment of temporary providers. Staffing agencies enable health care employers to access a large network of passive and active candidates. The health care organization receives a list of prescreened candidates from a professional recruiter responsible for the early stages of the recruiting process, which may include identifying candidates, verifying credentials, con- ducting initial interviews, and checking references. This enables the health care organization to maintain a leaner and more focused human resources team. From the employer's perspective, the main disadvan- tages of staffing agencies are costs, trust in the agency's credentialing process, the challenge of managing multi- ple staffing agencies to ensure that recruited staff possess the appropriate experience and skills, and the lack of transparency in pricing and candidates referred.' Because agencies are not intimately familiar with a health system's needs, agency nurses can be assigned to units that do not match their experience or skill level - either to units that demand more complex skills than their com- petence, where nurses may not know how to operate equipment and/or lack the confidence to deliver effec- tive patient care or to less-complex units, where their skills are underutilized.'° This mismatch can contribute to a negative working environment for both temporary nurses and their permanent counterparts. Moreover, staffing misplacements can negatively impact the quality of patient care and perpetuate workplace inefficiencies. Additionally, safety-net organizations sometimes find that staffing agencies do not understand their unique challenges and the importance of a cultural fit within the organization. Faced with these challenges, some of these organizations report feeling that statting agencies do not always provide a strong match. Therefore, even with lim- ited HR staff, they continue to recruit directly. Emergence and Potential of Technology-Enabled Staffing Technology platforms for recruiting and placing provid- ers have emerged to address some of the disadvantages of working with a traditional staffing agency. A variety of companies leverage information technology, such as complex relational databases, machine learning algo- rithms, and automated query systems, to improve the Solving Shortages: How Technology Can Help Meet California's Immediate Health Workforce Needs www.chcf.org 3 staffing process. These emerging companies offer a range of services, including these: » Algorithm-based "smart" matching between candidates and clients. Several companies aim to streamline and improve the match between candi- dates and health care facilities by using algorithms. Typically, candidates create a profile, input their per- sonal information (experience, education, hard and soft skills, personal and professional interests), and preferences (location, specialty, availability), and the algorithm analyzes their profile to match them with open positions posted by health care facilities. The matching algorithms are improved as users spend more time using the platform by incorporating infor- mation about the searches made by candidates and the positions that candidates click on. These platforms have different approaches in how they deliver candi- dates to employers. >» Automated workflow support for clients. Companies have developed tools to increase the efficiency of recruiting by automating portions of the process. These tools may include license verification, auto- mated interview scheduling, in-app chat functions, and systems that track candidates from the initial screening all the way through to hiring. » Services that attract job seekers and increase the pool of candidates. Some companies offer candidates services to attract them to their platform. Services can include free continuing education courses, online com- munity groups, newsletters and blogs, and podcasts. » Internet and social network marketing. Recruitment advertising on internet search platforms such as Google and within social media sites such as Facebook is an essential piece of the search and placement pro- cess. Some companies specialize in these marketing techniques while others simply integrate them into their overall platform. Companies that leverage these technological approaches for recruitment claim to offer health care organizations a number of benefits: » Lower costs. These technology platforms aim to reduce or eliminate the need to employ recruiters and marketing specialists, which can lower operational and overhead expenses compared to traditional staff- ing agencies. Their intent is to drive efficiencies for their customers so that every dollar spent on recruit- ing can go further and be more effective. Using these platforms may help organizations either reduce costs or hire more providers for the same spend. » Faster placements. They aim to offer a one-stop model where employers can complete multiple tasks on one platform. Thus, these platforms have the potential to speed up the placement process. » Streamlined verification. Some companies automati- cally verify licenses and credentials, which can be an important benefit for employers, allowing them to focus on interviewing candidates. The early verifi- cation of licenses may reduce the amount of time between interviewing, hiring, and onboarding. » Increased transparency. In some systems, employ- ers can see how many and which candidates fulfill the positions' requirements rather than seeing only the candidates selected by the recruiter. The authors identified three categories of companies that offer technology-enabled staffing platforms in the pro- vider recruitment space and interviewed five companies to learn more about their offerings. While not intended to be a comprehensive list, these companies represent a range of solutions in the market and the potential value for health care organizations facing challenging recruit- ment environments and limited internal HR resources. Each company has a unique approach to leveraging technology in the temporary and/or permanent place- ment process. Some focus on a single professional group and others focus on multiple professions. Some focus on temporary placement and others on permanent staffing. The categories and companies interviewed include: » Managed service providers (MSPs). In general, a staffing managed service provider (also called a man- aged services program) is a company that manages specific human resources services such as staffing and recruitment for its customers. MSPs have been estab- lished for a long time and typically take responsibility for specific HR functions such as recruitment and hir- ing, which can benefit organizations by outsourcing this expertise that may be hard to maintain in-house, California Health Care Foundation www.chcf.org 4 or provide more efficiency by taking advantage of economies of scale. MSPs are increasingly evolving to integrate more technology into their product and service offerings. A number of companies specialize in health care facility recruiting, and some are subsid- iaries of larger temporary placement agencies. Some MSPs also offer a vendor management system (VMS), which provides web-based software systems to man- age staffing and recruitment, including storing and tracking information, and to support the recruitment and matching process. Most MSPs tap into multiple temporary staffing agencies and aggregate candi- dates into a single platform. MSPs usually operate in one of three ways: (1) some are also staffing agencies and recruit candidates from their own roster before offering candidates from other agencies; (2) some are staffing agencies but are vendor-neutral, meaning they source candidates from any agency, and (3) some are not staffing agencies and work with various agencies to fill positions. Many of these companies also offer workflow tools for their clients in addition to VMS soft- ware. There is a growing number of MSPs; prominent companies include Aya Healthcare, Medefis, Medical Solutions, MedicusOne. More than half of travel nurse revenue was billed through a MSP program in 2017."' The authors interviewed leadership at Medefis, which offers a vendor-neutral MSP and is a subsidiary of AMN Healthcare, one of the nation's largest health care staffing companies. » Placement agencies that leverage internet and social network marketing. Some traditional staffing agencies have developed sophisticated marketing strategies as a pillar of their approach. The authors interviewed leadership at Inline Group, whose services include the development of dedicated recruiting web pages for each of their clients and advanced internet advertising techniques to identify and target candi- dates for job openings. » Algorithm-focused staffing agencies. While the two previous categories of companies grew from tradi- tional organizations, a new category of technology staffing company has been established within the past several years that leverages advanced computing algorithms to streamline temporary and permanent clinical placements in health care organizations. Often these companies are open marketplaces where candi- dates can directly engage with job postings. They aim to reduce the need for human recruiters by using better data and matching algorithms. Many of these com- panies also offer workforce tools, candidate-focused services to draw candidates to their platforms, and internet and social network--focused marketing. The authors interviewed three companies in this category. Incredible Health focuses on permanent placements, matching nurses to positions for which they are quali- fied and allowing nurses to decide which jobs they want to interview for. Nomad Health has developed algorithms for matching nurses with temporary job opportunities, with each algorithm focused on a par- ticular aspect of the matching process. Trusted Health has its own staffing needs system focused on tempo- rary and traveling nurses, which health care facilities can use independently to recruit providers or can integrate into the human resources system they are already using. Limitations of Technology- Enabled Staffing While these emerging companies and technology ser- vices are promising, most are new and still encounter challenges to widespread use in this particular health care sector. Interviews conducted for this report surfaced a number of important limitations for the use of technol- ogy-enabled staffing for hiring temporary providers by safety-net organizations. Perhaps the biggest issue is that few providers in this health care sector are aware of these platforms or use them to date, and none of the technology-enabled staff- ing companies identified for this report are currently focusing on safety-net organizations as a key customer segment. These companies are very early in proving their value to customers in general, and potential users express concerns about timeliness, quality of matches, comprehensiveness of services, and cost. Even as these platforms demonstrate value over time, many employ- ers will continue to work with multiple staffing solutions to fulfill their staffing needs. The market for recruiting services in California is fragmented; even traditional agencies do not hold more than 10% of the market. Health Workforce Recruitment Platforms www.chcf.org 5 HR executives interviewed for this report said that working with a recruiting partner that can establish a rela- tionship to understand the organization's needs is critical to help make the appropriate match. Safety-net organi- zations serve a diverse population of patients. Therefore, the quality of candidates is paramount, particularly because the patient population served often has com- plex health and social needs. Safety-net organizations that have used staffing agencies to fill temporary posi- tions expressed the value of an established relationship with their assigned recruiter(s). Furthermore, while a technology-enabled solution has the potential to cut the cost of recruitment by using more data and automation, these platforms still need to meet a wide variety of recruitment needs among their custom- ers. For example, organizations that have worked with MSPs value the comprehensive list of services they offer. For these organizations, MSPs are essentially an external HR team that can assist with managing most if not all tasks associated with hiring temporary providers. This compre- hensive approach usually involves working with one MSP company instead of several staffing agencies and may be particularly valuable to safety-net organizations with small HR teams but sizeable temporary workforce needs. Last, while these technology-enabled platforms auto- mate some parts of the recruitment process, employers must still conduct their own interviews to assess whether a candidate is truly a good fit for the organization and position. Employers are also still responsible for onboard- ing temporary staff and need to develop and deploy an orientation process for them. Looking to the Future The landscape of technology-based staffing solutions continues to grow and evolve. Companies are constantly working to craft solutions that meet the needs of their potential customers. As new companies enter the mar- ketplace, bringing new approaches and technologies, older companies adjust their services and offerings to address the competition. For example, Nomad Health began by placing both locum tenens physicians and temporary nurses but has since narrowed its focus to registered nurses. Two of the newer entrants (Nomad Health and Trusted Health) started with a focus on plac- ing temporary providers but may find opportunities for growth in permanent placements while, conversely, Incredible Health, which started with a focus on perma- nent placements, may find opportunities for growth in the temporary placement market. Safety-net clinics and hospitals, both urban and rural, struggle with staffing shortages. They may have more opportunities to work with emerging technology partners, given that they may be more susceptible to workforce gaps because of the professional, sociocultural, struc- tural, and workplace factors that influence providers' decisions on where to practice. While some safety-net organizations may utilize a rotation of temporary provid- ers as a part of a long-term staffing strategy, most turn to them to fill gaps when there are unfilled vacancies, staff absences, or significant unanticipated turnover, as well as during high-census periods such as flu season. These organizations currently turn to traditional staffing agen- cies or MSP companies that provide a full set of services to meet their recruiting needs. The challenges of recruitment in the health care safety net create a unique opportunity to consider how emerg- ing technology-enabled recruiting solutions can bring more efficiency, transparency, and lower costs to the market. Emerging technology vendors with data-driven approaches have an opportunity to accurately match the unique needs of a safety-net organization with the unique qualifications of a provider applicant. Over time, these vendors may also provide valuable support in hir- ing temporary and permanent providers, or even serve as viable alternatives to traditional agencies. However, these companies have significant work to do to meet the unique needs and concerns of safety-net health care organizations and to tailor their services accordingly. This could include highlighting bilingual candidates or candidates with experience working with vulnerable and rural populations, and tailoring price points to meet the budget needs of safety-net organizations. Eventually, while technology-enabled platforms may not solve all safety-net provider staffing problems, they could poten- tially serve as valuable partners. California Health Care Foundation www.chcf.org 6 Nurse, Physician, and Other Provider Recruitment Technology Vendors The organizations presented in Table 2 were identified as providing a technology platform for provider recruit- ment. This is not intended to be a comprehensive list of organizations nor an endorsement of these companies. Rather, the goal was to give a sense of how this market is shaping up and the types of organizations addressing this unmet need. For more information, please contact each organization directly. Table 2. Examples of Technology-Enabled Platforms Focused on Nurse, Physician, and Other Provider Recruitment OTHER TARGETED YEAR SERVICES LICENSE COMPANY TYPE PROFESSIONS KEY CUSTOMERS FOUNDED OFFERED VERIFICATION INCREDIBLE Algorithm- Permanent nurses Hospitals 2017 Workflow tools Yes HEALTH focused staffing for clients, agency candidate- focused services Placement agency Permanent Outpatient 2007 Workflow tools Yes 6 | N L | N IE that leverages physicians, nurse clinics, hospitals, for clients, internet and practitioners, managed care candidate- social network physician assistants, organizations, focused marketing specialists, nurses skilled nursing services facilities \ oo Managed service Contracted Ranges from 2003 Workflow tools No NV Medefis provider (and providers and critical access for clients {available vendor manage- nonproviders hospitals to multi- through ment system) hospital systems optional outsourcing) eo Algorithm- Travel nurses Hospitals 2015 Workflow tools Yes focused staffing for clients, N omad agency candidate- focused services oe Algorithm- Travel nurses Academic medical 2017 Workflow tools Yes e t rusted focused staffing centers, acute for clients, agency care facilities, candidate- post-acute care focused facilities services Health Workforce Recruitment Platforms www.chcf.org 7 About the Foundation The California Health Care Foundation is dedicated to advancing meaningful, measurable improvements in the way the health care delivery system provides care to the people of California, particularly those with low incomes and those whose needs are not well served by the status quo. We work to ensure that people have access to the care they need, when they need it, at a price they can afford. CHCF informs policymakers and industry leaders, invests in ideas and innovations, and connects with changemak- ers to create a more responsive, patient-centered health care system. For more information, visit www.chcf.org. About the Innovation Landscape Series As part of its efforts to help promising products and services succeed and scale among California's safety- net providers, the CHCF Innovation Fund conducts high-level landscape analyses of issue areas especially ripe for tech-enabled innovation. The Innovation Fund publicizes the findings of these landscape analyses to inform other funders and customers seeking scalable solutions to challenges faced by safety-net providers. Readers should note that these reports are not intend- ed to be exhaustive, nor are they endorsements of the companies included in them. Finally, because solutions landscapes can evolve quickly, these reports may not fully reflect the current market. NAA Aetateu Melee Alaa LiCelaie lire] Endnotes 1. 10. 11. Joshua D. Gottlieb and Avi Zenilman, When Nurses Travel: Labor Supply Elasticity During COVID-19 Surges (PDA), University of Chicago, November 19, 2020. . Joanne Spetz, Janet Coffman, and Igor Geyn, California's Primary Care Workforce: Forecasted Supply, Demand, and Pipeline of Trainees, 2016-2030, Healthforce Center at UCSF, August 15, 2017. . Joanne Spetz, Forecasts of the Registered Nurse Workforce in California (PDF), California Board of Registered Nursing, May 2020; and Joanne Spetz, Regional Forecasts of the Registered Nurse Workforce in California (PDF), Healthforce Center at UCSF, December 2018. . 2020 Survey of Temporary Physician Staffing Trends (PDF), Staff Care, 2020. . "Critical Access Hospitals," Rural Health Information Hub, last reviewed September 3, 2021. Critical access hospital is a designation given to eligible rural hospitals by the Centers for Medicare & Medicaid Services. Congress created the critical access hospital (CAH) designation through the Balanced Budget Act of 1997 (Public Law 105-33) in response to over 400 rural hospital closures during the 1980s and early 1990s. Congress has amended the CAH designation and related program requirements several times through additional legislation. . Xinxin Han, Candice Chen, and Patricia Pittman, "Use of Temporary Primary Care Providers in Federally Qualified Health Centers," Journal of Rural Health 37, no. 1 Jan. 2021): 61-68. . "Temporary Employment in the U.S. to Grow Faster Than All Jobs Through 2025, According to New Job Forecast from TrueBlue and Emsi," Business Wire, November 1, 2019. . Joanne Spetz and Lela Chu, California Board of Registered Nursing 2018 Survey of Registered Nurses (PDF), California Board of Registered Nursing, May 2020. . lakovos Theodoulou, Akshaya Mohan Reddy, and Jeremy Wong, "Is Innovative Workforce Planning Software the Solution to NHS Staffing and Cost Crisis? An Exploration of the Locum Industry," BMC Health Services Research 18, no. 1 (Mar. 20, 2018); and 2020 Survey, Staff Care. Catherine Birmingham et al., "The Experiences of the Agency Registered Nurse: An Integrative Literature Review," Journal of Nursing Management 27, no. 8 (Nov. 2019): 1580-87; and Kate Simpson et al., "What Do We Know About Our Agency Nurse Population? A Scoping Review," Nursing Forum 54, no. 4 (Oct./Dec. 2019): 492-98. Amy Chang, "Moderating Growth in Healthcare Staffing; MSP and VMS Penetration Continues," Staffing Industry Analysts, October 9, 2018. California Health Care Foundation www.chcf.org 8