Situation
The Professional employer organization (PEO) industry has been around for about as long as the freestanding ASC industry. The Surgery Center of Lynchburg, a long-established ASC, became interested in the PEO model and recognized a strategic fit with the ASC environment. When the ASC board of managers ultimately made the decision to switch its HR & employment services from their hospital partner to an independent/outsourced HR firm, they called on MedHQ. There was a need to move the 75 employees to a new payroll system and to develop a different way of working with those employees. “We were asked to propose an outsourced staffing solution for them whereby their employees would be converted to the MedHQ payroll, and then we’d take on long-term human resources management for the ambulatory surgery center,” explains MedHQ Chief Operating Officer, Rita Hernandez Figi. “We were working within a very tight window of time — ideally I like to do this over a three-month period, especially with a group this size, but we did it in about six weeks.”
Challenge
“I think one of the biggest challenges was explaining the change to the employees, and making sure they understood,” she says. “They were accustomed to the hospital being their employer, with their benefits coming through that hospital connection. Our challenge was to get the employees to trust and to understand they would still be at the surgery center and their day-to-day contacts would still be the same. The only change was their human resource contacts. I think people were concerned that we were remote because before when they had a question, the hospital was right there, just three blocks away.”
Solution
The MedHQ team addressed the challenges head on, with a series of in-person meetings and detailed communication. “As soon as the announcement was made, we were there with some of the hospital’s HR staff and the surgery center administrators to present a united front and facilitate the transition,” Hernandez Figi says. “I think it was really all about teamwork. Everybody knew that this was the best way to go.” Many of the questions raised were about very tangible employee concerns: “My benefits are changing, how are we going to handle the deductibles that I’ve already paid?” and “I’ve got a loan with the 401K plan, how is that going to be handled?”
MedHQ responded with tactical information and a methodical approach to answering specific questions. In the announcement phase, informal conversations and two all-employee meetings helped employees feel more comfortable with the change, and with MedHQ’s staff as people. When it came time for benefits enrollment, two MedHQ experts worked onsite to conduct open enrollment meetings, chat with the employees, and explain the differences between the plans. “We’d sent out all of the materials, but it was important to the success of the program that we pay attention to the personal, to face-to-face contact,” Hernandez Figi says.
“One of the things they feared was that we were in Chicago and not right there. So, we had to show them by being there in person when they needed us, not just via phone or Skype. Our people onsite helped them handle their benefit enrollments. The reaction was very positive. Employees got the chance to ask a lot of questions, both about benefits and any other human resources topics of concern.” From there, the MedHQ staff went about the hard work of conversion: getting the paperwork together, the benefit and insurance information, loading all the data into the firm’s PrismHR software system, working through how the payrolls were going to run, implementing a time-keeping system and even ordering time clocks – all in a six-week turnaround.
Hernandez Figi believes outsourcing HR was instrumental in the center’s success: “The center could have employed the staff themselves, but then they would have had to set up a different entity and assume the risk for those employees. MedHQ offers HR outsourcing services in either a PEO or Long-Term Staffing (LTS) model. And for both formats, when you’ve outsourced human resources, you have economies of scale for benefits plans and the like because you’re not looking at a small group now, 75 people, you’re being rated with a much larger organization. There are economies of process, too,” she continued.
“All of their processes were changing, so we freed them from the chores of finding benefits for the group, finding a workers comp carrier, and completing all of the censuses that are required for all of the different insurance plans. Without MedHQ, they would have been negotiating for small-group coverage, and that gets expensive. We certainly demonstrated cost savings, which is why they decided to go this route.”
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