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MSP vs. VMS: How Are They Different?

MSP vs VMS How Are TheyDifferent

Today’s workforce is evolving. No longer are all workers employed with one company working 9 to 5.

In 2016, 34% of Americans worked as freelancers or in the gig economy. That number is steadily growing every year.

Businesses of all sizes are acknowledging the benefits of working with contingent and freelance workers. Contracting external workers save hospitals and practices time and money.

In the healthcare sphere, companies are saving time by outsourcing some areas of the business. Areas that are being outsourced include Human Resources, IT, recruitment, marketing, and clinical staff.

When a healthcare company outsources, another business or contractor is taking over that area. This allows the healthcare company to focus their time and energy on improving their patient care.

Outsourcing is where MSPs and VMSs comes into play. An MSP is a managed service provider while a VMS is a vendor management system. Learn the benefits of both MSP and VMS and how they can help your healthcare business. 

What is the Difference Between MSPs and VMSs?

MSP or Managed Service Provider, is a third-party business that takes over a part of the healthcare business. A VMS, or Vendor Management System, is a technology solution for hospitals, practices, and smaller businesses. While MSPs and VMSs have the same goal when it comes to improving efficiency in healthcare, there are a few key differences. Depending on your needs, an MSP or VMS may be a better solution. 

What are MSPs?

Managed Service Provider or MSP, is a third-party business that takes over a part of the healthcare business. An MSP can also work as a staffing or marketing agency by connecting freelancers with management in the healthcare business.

The goal of an MSP is to reduce the workload from HR when it comes to finding new hires. They work like a partnership with the hospital or practice.

An MSP is a perfect solution for hospitals that are short-staffed or face varying staffing needs. The MSP takes away the worry by finding and managing the right candidates for the job.

Benefits of an MSP include:

  • Finding quality candidates to fill vacancies or work short term
  • One master contract versus individual agreements
  • Streamline recruitment processes
  • More time for HR to focus on patients and full-time employees
  • Less staff turnover
  • Recorded data to help future staffing plans and needs
  • Cuts wasted spending

Larger hospitals and practices benefit best from an MSP as they cut down on time, costs, and workload.

What is VMS?

A VMS, or Vendor Management System, is a technology solution for hospitals, practices, and smaller businesses. A VMS is a web-based software system that helps manage independent and contract staffing needs.

A VMS helps with automation and storage of information but gives you and your practice the control rather than a 3rd party business. Further, the VMS streamlines the process of finding and on-boarding candidates from the contingent workforce.

Many MSP companies use a VMS to optimize the process of connecting independent workers with businesses in need of additional staffing.

VMS offers benefits that are very specific to the management and hiring of contract workers. They include:

  • Simplified billing
  • Streamlined recruitment process
  • Detailed reports
  • Perfect for businesses with more candidates than available jobs
  • Management of independent workers
  • Vendor neutrality

A VMS doesn’t exactly find and recruit contingent staff candidates for your hospital. Instead, the software focuses on streamlining all management processes and pay associated with candidates.

You and your HR department will have to find your candidates, but a VMS will make onboarding, management, and payroll much easier.

A VMS can be directly used by a hospital or practice to manage contract talent or by an MSP hiring team for the hospital or practice.

Choosing Between MSP and VMS

MSP and VMS are both great options for saving time and managing contingent workers for your hospital. But, how do you know if an MSP or VMS is best for your hospital or practice? 

Advantages of MSP for Hospitals and Practices

Larger healthcare providers will benefit from an MSP. MSP companies work as a partner with hospitals and healthcare practices. They carefully connect talented contingent candidates that best fit your needs.

Hospitals and practices needing more contract workers will save time and money working with an MSP. This is also true for hospitals that have varying staffing needs throughout the year.

An MSP will take over the entire recruitment process from beginning to end leaving only the final decision to hire to the hospital.

If your hospital or practice is always in need of contingent workers, an MSP will go above and beyond to meet your needs.

Advantages of VMS for Healthcare Providers

A VMS is great for big and small companies with an existing pool of contingent candidates. Rather than spending extra on a managed service provider to find candidates for you, you can focus on streamlining your current HR processes.

In addition to speeding up the onboarding process, a VMS stores data, candidate information, payroll, and invoicing. All information regarding your continent workers can be found in one easy-to-access place. 

You’ll find contingent candidates will get through onboarding much faster with a VMS. This means contingent workers at your hospital can get to work sooner which saves money and improves care and services.

With a VMS, you remain in control of the recruitment process. Your hospital or practice will spend more time providing outstanding care with a VMS. 

Save Time with Managed Services Providers and Vendor Management Systems

Whether you outsource your entire hiring process to an MSP or streamline it with a VMS, your healthcare business will save time. Your HR department will thank you.

Working with contingent workers in your healthcare business gets unique and specialized talent to help with projects or cover open positions. Incorporating an MSP or a VMS takes the hassle out of contracting. Both full-time and contingent help can get to work faster to ensure your organization offers the best healthcare.

Choosing an MSP or a VMS depends on your hospital or practice’s needs. If you have a pool of candidates to work with and prefer being in charge of all areas of the contract hiring process, a VMS is a great solution.

If you’re looking for a worry-free approach, an MSP will take care of the recruitment, management, and hiring for you. 

Looking Forward to New Forms of Work

More and more talented individuals are turning to freelance and temporary gigs to make a living. Contingent workers offer a great skill set and make valuable assets to your company. With MSPs and VMSs, the recruitment, management, and hiring processes of contract workers is easy.


Looking to learn more about MSPs and VMSs to improve your hiring process? Let us know, we’re happy to find the perfect solution for you and your hospital or practice.

October 18, 2019/By Jeff Niles
TAGS: VMS, locums MSP
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Author: Jeff Niles

Jeff is Executive Vice President of Sales and Marketing for Healthcare Workforce Logistics and has been in healthcare contingent workforce management for over 15 years. Jeff has led sales, implementation, and client services to some of the largest and most influential healthcare providers with technology and solutions installed in over 3,000 hospitals in 50 states and the UK. Jeff is inspired to work with transformational leaders that have a vision to achieve the highest levels of efficiency, transparency, compliance, quality and cost savings. Contact Jeff at jniles@hwlmsp.com OR 630-913-6629
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