Vendor Management Organizations-The Future?

The growth of medicine in the United States is growing although stunted after the recession, the demand for more physicians with the advent of the ACA and the aging population has never been higher. Many hospitals around the country have set up outreach clinics for primary care, surgery centers and have acquired specialty practices to catch an ever greater share of the market. I especially see this kind of outreach in Jacksonville, Florida.

The expansion of services in primary care is still growing, exceeding the industry’s projections by millions ten years ago. It is a vast market with an ever widening attractiveness to the practitioners that choose the locum tenens lifestyle.

Another industry in medical staffing witnessed this growth some twenty years ago; nursing. The reasons for its growth mirrors the growth in physician staffing, but with greater shortages.

With growth of locum tenens services and the continued need for traveling and PRN nursing; are the functions going to merge? There is a disturbing trend that suggests that this may be the case. Most of the major locum tenens companies that are publicly traded are owned by nurse staffing companies.

A concept being trotted out in the industry are Vendor Management Organizations(VMOs). These organizations have been and are employed by large corporations and government institutions to manage their dearth of contractors. As the need for temporary staffing increases in both nursing and physicians, these organizations become much more attractive to large hospitals and their surrogate organizations. Nurse staffing companies have taken the lead in promoting this concept in medicine. The problem is the level of professionalism and understanding of the physician’s practice, and the risk and responsibility to the patient. These VMOs propose to handle all the coordination of temporary nurse and physician staffing, which includes malpractice and invoicing for services. For a physician specialty area that is so important to the CEOs, CMOs , VPs  and service line directors of the hospital; does the hospital want physician staffing handled at a nurse staffing level? And what of the efficiency of the locum tenens agency providing the service? For anybody that has used locum tenens or has worked locum tenens realizes this will destroy any efficiency in the agency providing the service.

To lump this in with nursing and the loss of control would be a bad trend with immediate downsides to the physicians that provide the clinical services and the agencies. For example, if you have a clinical issue that involves aesthesia protocol in labor and delivery-under the vendor management system, the locum tenens agency must contact the  VMO (which as of now is dominated by large nurse staff agencies) which in turn must contact the assigned hospital representative responsible to the locum tenens.This is another administrative layer between the locum tenens agency and the client hospital. Does the VMO representative have the knowledge to understand the issue? And what of the response time from the hospital to the VMO to the locum tenens agency. With the increase of locum tenens physicians in the medical system, can patient care wait for a bureaucratic response? The way things work now, an issue comes up on the locum tenens assignment, the locum tenens agency contacts administration at the executive level of the hospital, and the issue is handle within hours. More disconcerting is the response time in the event of an alleged malpractice incident. Does the incident report go to a VMO before it reaches the agency covering the physician’s liability insurance? What would be the response in such a scenario? The VMO’s are not proposing to cover the malpractice-that will still remain with the agencies.

VMO’s also are set up on an “on-line portal” basis. CV’s, licenses, documents are uploaded to a faceless, nameless administrative personnel. The idea is to limit as much “human” communication as possible. Is this in the best interest of patient care?

The relationship you have with locum tenens representative, and conversely their relationship with the hospital would be intercepted by a third party from another organization.

Physician staffing and all related issues must remain at the medical staff level in conjunction with the administration of the hospital, governed by the by-laws set up by each facility

What may seem like an attractive, efficient way to consolidate all functions of medical staffing in an institution, may in fact create negative issues for the hospital, physician and agencies involved in the delivery of locum tenens services.


Carmen A. Renaldy, III has been in the physician staffing and locum tenens industry since 1981 and has founded his own company, Med Link. Med Link provides physicians in hospital & emergency medicine, anesthesia, all surgical specialties, neurology and pulmonary-critical care medicine. He is also a board member of NALTO-National Association of Locum Tenens Organizations.