Why are there fewer heathcare staffing agencies in the US today?

Posted by Tim Teague on 4/30/24 2:11 PM

Topics: Health Care Staffing, VMS, MSP, Contract Labor

The landscape of healthcare staffing agencies in the U.S. has shifted significantly, with fewer agencies dominating the market. This trend can be attributed to several factors:


  1. Rise of Managed Service Providers (MSPs): The emergence of MSPs in the healthcare industry has played a pivotal role. MSPs streamline the process by acting as intermediaries between healthcare providers and staffing agencies. They handle tasks such as vendor management, billing, and dispute resolution, which simplifies operations for healthcare facilities. Many hospitals opt for MSPs to consolidate their interactions with staffing agencies, reducing the administrative burden and supposedly ensuring compliance.

  2. Technological Advancements: The development of Vendor Management Systems (VMS) tailored for the healthcare sector has facilitated the growth of MSPs. These systems offer features that automate and centralize the management of contract labor, making it easier for healthcare providers to engage with multiple staffing agencies through a single platform. Read more about the incestuous nature of healthcare staffing VMS/MSP here.

  3. Acquisition by Larger Agencies: Large staffing agencies have recognized the value of MSP contracts and have aggressively pursued acquisitions of MSPs. By owning MSPs, these agencies gain exclusive access to job requests from hospitals and healthcare facilities, giving them a competitive edge over smaller agencies.

  4. Barriers to Entry: For smaller staffing agencies, gaining access to MSPs can be challenging. Many complain about difficulties in getting approved as vendors by MSPs, as well as delays in receiving job orders. Additionally, participation fees imposed by MSPs can eat into the profits of smaller agencies, making it financially challenging for them to compete with larger players.

  5. Demand for Fairness: Despite the dominance of MSPs owned by staffing agencies, there is a growing demand among health systems for a more equitable system that levels the playing field for all agencies. This indicates a potential shift in the future landscape of healthcare staffing towards a model that fosters competition and fairness among agencies.

Fortunately, there is a growing demand by health systems for an alternative that puts all agencies on a “fairer” playing field.



124401379_372302477216852_3956132087598176642_n-240x300Tim Teague

President, BlueSky Synergy


Tim is a thought leader in the contingent labor market place. His latest technology approach takes advantage of hospitals developing their own "gig" workforce. This technology is similar to what staffing agencies have enjoyed for years.


BlueSky’s technologies have been powering the staffing industry and its clients for more than 20 years. We know that an impactful caregiver, in the right role, influences more than just unfilled shifts so at BlueSky we’ve built powerful tools to automate and streamline legacy workflows. Combining the functionality of multiple vendors, there’s a BlueSky for everyone: from Credential Management to Per Diem & Short-term Scheduling to Invoicing. BlueSky isn’t one more thing, it’s all things in one. 

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