HBI Deals+Insights / Healthcare Reform

Agency models look easy to disintermediate

How would you describe a for-profit healthcare group which basically takes people away from jobs in the public sector and then hires them back to the same employers in exchange for a fat fee?  How about parasitic?

No doubt such outfits would claim to be providing extra flexibility and a necessary service. But at one level it is mainly necessary because they have tempted public sector staff into better-paid freelance or overtime roles.

If that is all these groups do then we think such models are likely to be disintermediated by new tech players. For example in the UK, The Locum’s Nest, a sort of LinkedIn which matches NHS doctors to other NHS roles, is rolling out what it grandly calls The Digital Collaborative Bank –  the NHS’ first digital collaborative staff bank. The idea is that doctors in an NHS hospital can immediately see all shifts available in other, neighbouring NHS trusts.

Ahmed Shahrabani, the founder of Locum’s Nest, tells HBI that the bank has already boosted fill rates in a lot of trusts. “We’ve already seen fill rates, within the Digital Collaborative Bank go up to well above 80% and some departments are hitting 90%. Some departments are even completely agency free and haven’t used an agency doctor in 6/8 months. So in theory, the bigger this gets the lower the reliance on agency and it could eventually become agency free.”

This has already been done on a smaller scale with its South England Collaborative which saw Trusts in the south-east come together to match doctors to 40,000 vacant shifts this year. Locum’s Nest claims that if all that time had gone through traditional recruitment agencies the cost would have been approximately £4.8m instead of the just under £500,000 that Locum’s Nest charged.

Indeed it reckons that if rolled out nationwide Locum’s Nest could save the government £1bn a year.

So the question becomes which private groups are really agency models? Recruitment, of course. Teleradiology? Arguably. And many large for-profit groups in the Nordics and the UK also have substantial arms handling recruitment. We think the for-profit sector needs to hunt hard to add more value. The agency model is dead.





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