Leveraging the Contingent Workforce as a Strategic Element of Talent Acquisition

People in Healthcare Summit 2018 | March 21, 2018

Today’s Presenters

Leanne Oatman President & Co-Founder

RightSourcing

Christopher Henry Vice President of Talent & Change

Management Sutter Health

Overview

Serving More Than 100 Communities With: • 12,000+ physicians • 54,000+ employees

~15,000 RNs • 24 acute care hospitals

Licensed beds: 4,311 Births: 33,749 Discharges: 193,161 ED Visits: 873,992

• Home Health Visits: 519,703 • Hospice Visits: 217,084 • Sutter Health Plan • $12 billion in revenues (2016) • Community Benefit: 2016 $669M

Sutter’s Mission We enhance the well-being of people in the communities we serve through a not-for-profit commitment to compassion and excellence in health care services

Sutter’s Vision Sutter Health leads the transformation of health care to achieve the highest levels of quality, access and affordability

Community impact, national leadership

Overview

Pioneered Contingent Workforce Management Solutions for Hospitals and Healthcare Systems

Vendor Neutral MSP Unmatched Compliance Expertise Clinical & Non-Clinical Labor Expertise Best-in-Class Technology & Workforce Analytics Customized Service-Delivery $2.5B+ Under Management Across 250+ Locations National Network of 2,600+ Suppliers

Top Vendor- Neutral MSP by

Healthcare Spend

The Joint Commission Certificate of Distinction

Ranked #1 for Contingent Workforce

Management

Staffing Suppliers & Volunteers

Single MSA for all vendors

Requisition Oversight

Vendor Management

Worker Credentials Audits

Onboarding Optimization

Automated Time/Expense

Consolidated Invoicing

Best Practices

Contractor Compliance

RFI Automation

Market Intelligence

Strategic Analytics

Streamlined Contingent Workforce Management

Improve Worker Quality Increase Process Efficiencies Mitigate Risks Reduce Costs

Independent Contractors

Statement of Work

The Shifting Workforce

Healthcare Talent Supply & Demand Shifts

Next Decade in Healthcare*:

Growth Service Demand > 10% GDP Jobs >15%

Shortages

> 45,000 Primary Care Physicians > 46,000 Surgeons + Medical

Specialists

Technology Skills Gap > 50% *Sourced from H. Landau, CEO - First Health Pro Inc. & T. McDonough, CEO – Strayer@Work

FTE Fill Fatigue Factors

25% of U.S. workforce are

Millennials, with 1:3 freelancing

The healthcare industry is becoming the largest employment sector in

the U.S. and will account for one-third of the nation’s job growth

by 2024

In 2016, a reported 50% of healthcare jobs

across the nation went unfilled

51% of FTE workers not engaged with jobs & commonly burn-out

Sourced from nonprofit HR

The Growing Contingent Workforce

Contingent Workforce Management Journey

Sutter Health Opportunity

25% Turnover in critical areas of

nursing

Hard-to-fill specialty

experience nationally

Over $190M annual contract

labor spend

Initial Sutter Health Challenges

Too Many Suppliers /

Agreements

De-Centralized Management

Lack of Internal Expertise

No Contingent Workforce Visibility

Not Leveraging Economies of Scale

Inconsistent & Inefficient Processes Data Analytics &

Workforce Planning

2013

2014

2015

2017+

2016

Successful Implementation Central Valley,

followed by EBR, IS & SPS

772 Legacy workers and 180 workers

placed

Growing Adoption Five more regions

live 1,551 workers

placed Successful Expansion Bay Area

Nursing & East Bay

3,095 workers placed

Program Optimization

Sac Sierra Nursing & Sutter

Coast added 3,634 workers

placed

Strategic Partnership Ongoing discussions to

optimize the MyTempStaffing

program

MyTemp Staffing Timeline

Holistic View of Workforce

Customized Dashboards

Track Key Success Drivers

Sutter gained visibility to the enterprise-wide temporary workforce.

Dashboards customized to provide actionable insights that are important to Sutter.

Allowing Sutter to: • Compare costs across all worker types, job titles,

locations, etc. Know when, where and how to source cost-effectively.

• Determine why workers come and go. Leverage data to create new strategies to attract / retain top talent.

• Identify trends / outliers in data. Pinpoint gaps or areas of opportunity.

Gaining Workforce Visibility

Department with EEOC, FLSA, Co-Employment Expertise

Compliance/Credentialing Team of 5 dedicated Compliance Analysts for Sutter Health

Standardized Contract Terms for Suppliers

Validation/ Monitoring of Supplier Insurance Certificates

Former IRS Auditors and Insurance Specialists

1099/IC Worker Classification Audits

• Since program go-live RightSourcing has participated in 26 audits with 100% compliance

Contract and Compliance Consistency

• Since go-live 1,026 workers have been converted to full time, resulting in a 9.5% conversion rate

• Generating an estimated $5.2M in cost-savings

Workers Converted to FTE

2017 Q1-Q2

400

2013 2014 2015 2016

28

137

345

116

Self-Sourced Eligibility for Rehire 2014 96%

96%

95%

92%

2015

2016

2017

2014

Optimizing Workforce Quality

• Self-sourced workers driving high worker quality scores and cost savings

Self-Sourced Talent Pools

High Worker Quality

FTE Conversions Cost Savings

Rapid Response Hours Utilization 2014 – Q1 2015

Cost Savings through Lower Rates

• RightSourcing implemented demand planning procedures allowing optimal time to source workers at competitive rates

• Reduced utilization • Estimated $16.7M* in savings for 2015 and 2016 combined

Eliminated Rapid Response

$2.4M in Cost Avoidance

COST SAVINGS

STAFFING PLACEMENTS

Percent of workers completing assignments eligible for rehire

QUALITY RESULTS

Compared to 2016 average

DECREASED NURSING TIME-TO-FILL

$7.7M 92%

3,327 6.3 Days

Highlights

2017 Program Results

Sutter Health-RightSourcing program has driven $35.7M in cost savings and avoidance since go-live in Q3 2013 through:

Market-rate benchmarking Competitive-bidding on all requisitions Resource forecasting to eliminate rapid

response rates Reduction in orientation Overtime reductions Self-sourced talent pools No-fee FTE conversions Process efficiencies

Value Through Cost-Savings

$3.4M

$7.3M

$9.3M

$7.7M

$1.1M

$2.1M $2.5M $2.3M

K

$1M

$2M

$3M

$4M

$5M

$6M

$7M

$8M

$9M

$10M

2014 2015 2016 2017

Cost Savings Cost Avoidance

Program Evolution:

Effective Utilization

of Technology to Drive Workforce

Optimization

Private Talent Network Your Network. Your Talent. Your Savings. By leveraging Sutter Health’s strong employer brand, RightSourcing’s Wand VMS technology is helping to build a Private Talent Network of workers exclusively for Sutter Health - including alumni, retirees, ‘silver-medalists’, referred workers, etc. Sutter hiring managers will leverage this functionality to easily identify, engage and assign quality talent in a very short amount of time – and with cost-savings of 10% – 20%.

Workforce Demand Planning

Ability to address critical planning

needs Assignments

ending in under 30 days

Planning needs can be addressed by manager, cost center, operating

unit, etc.

With key strategic decision points on workers, roles, tenure, time-to-fill, current and benchmarked rates, replacement costs, etc., the Sutter/RightSourcing program is able to optimize their workforce through a flexible

forecasting model to reduces costs, create efficiencies and improve patient care.

All-inclusive Total Talent Dashboard

SUPPLIER SCORECARDS Alignment with Sutter’s new

Operating Units

SUPPLIER EVALUATIONS Who’s In? Who’s Out? Who’s On

Watch List?

RECOMMENDATIONS RightSourcing to provide initial

recommendations and obtain Sutter approvals

SUPPLIER NEGOTIATIONS RightSourcing to facilitate negotiation

and contract adjustments based on final decisions

• Financial benefits – pricing leverage • Heightened supplier focus and engagement

• Tighter controls to increase candidate quality • Increased supplier alignment to business objectives

Supplier Optimization Framework