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Direct Engagement Efficiency

Company Background

As LNWH’s managed service provider, Medacs Healthcare identified DE as an area that could generate significant savings and efficiencies – and reduce risks associated with tax legislation and compliance.

Only 54% of locum doctors were being processed via the trust’s direct engagement model and less than 31% of AHPs. The Medacs Healthcare team calculated that the use of non-DE-compliant umbrella workers was costing the trust over £80,000 per month.

Umbrella workers are contracted and paid through third party umbrella companies. As these types of locum workers are not VAT registered, VAT savings of up to £8 per hour are lost and responsibility for their tax obligations lies with the trust, creating risk.

Additional risks were also apparent as 25% of bookings were off-contract workers, not subject to the same stringent compliance checks.

The Challenge

London North West needed a rapid reduction in umbrella workers to increase DE efficiency to the agreed target of 80% and mitigate the identified risks but knew implementing the required steps would be challenging.

If the critical culture change could not be adopted by all parties and the current methods of recording spend continued, there could be an adverse impact on fill rates.

Medacs Healthcare had also encountered issues on a similar project at a neighbouring trust, where doctors would only agree to change their pay type if rates were escalated.

If regular locum doctors could not be moved under the direct engagement model, there could also be a corresponding impact on the continuity of care delivered by the trust, as new workers would need to be brought in to replace them.

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The Solution

A comprehensive project control plan was created, specifically designed to avoid any impact on operations, with clear roles and responsibilities for escalating identified issues and a detailed risk register. It was tightly managed and jointly implemented in eight weeks, with the Medacs Healthcare team working in true partnership with key trust stakeholders.

Communications were thorough and led by the trust, including comprehensive FAQs for doctors, supply chain partners and off-contract agencies to support change management, with a clear cut-off date for non-compliance. Sharing successes achieved at other trusts also helped to convince key stakeholders that the project goals were achievable, and it could be delivered with no perceivable impact on overall fill rates.

In just four months, the DE-efficient hours filled had more than doubled, well exceeding the 80% target. Current DE-compliance is now 100% for AHPs and 95% for doctors. Total cost savings since project launch are currently £349,408 and the trust now has the highest rate of DE-compliance in their region.

The Result

  • Direct Engagement compliance of 100% for AHPs and 95% for doctors, the highest in the region
  • Cost savings of £349,409 in just four months
  • 15% increase in fill rates, with a corresponding increase in the quality of care provided, with on-contract workers subject to more stringent compliance
  • Improved management information and rate management with 100% adherence to AHP rate caps and extremely high adherence to the pan-London rate caps for doctors (97% core, 100% unsocial)
  • More efficient booking processes with last-minute changes auto cascaded to the supply chain, so agencies are more accurately focused on filling true demand
  • Reduced compliance risk, with consistently higher quality standards for all locum bookings in line with framework specifications
  • Continuity of care preserved with the retention of existing workers

“We now have a much more efficient operation, reduced risk and the highest rate of DE-compliance in our region.”

HR Director


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