From increased private equity involvement to cost-cutting pressures and technological transformation, the ripple effects are felt across the entire staffing ecosystem.
Fewer staffing vendors, more bundled services
As major healthcare systems consolidate, so do their vendors. The result: fewer staffing firms, but a stronger emphasis on full-service solutions. Staffing firms that are set up to win are expanding their offerings across locum tenens, travel, permanent placements and telehealth.
According to a recent Staffing Industry Analysts (SIA) report, the number of U.S. staffing firms generating over $100 million in annual revenue dropped from 241 in 2023 to 224 in 2024 — a 7% decrease in just one year.
This shift creates both opportunity and risk. Healthcare leaders are under pressure to find the right staffing partner — one that offers more than just transactional and timely placements. The ideal vendor is a strategic partner, who can collaborate on developing scalable, comprehensive and long-term workforce solutions.
The impact of private equity
Much of the healthcare consolidation is being driven by private equity firms looking to expand their portfolio to include scalable, tech-enabled healthcare platforms. Healthcare leaders can expect continued consolidation and should prioritize partnerships with firms investing in innovation.
As noted by Health Affairs, private equity firms typically target high-margin providers like hospitals and physician groups, integrating technology to rapidly expand reach and streamline services.
Rural providers are disadvantaged
While large systems will benefit from scale, small clinics and rural hospitals struggle to compete. Larger staffing firms increasingly prioritize big accounts, leaving rural facilities with fewer options and higher costs.
According to Washington Center for Equitable Growth, when hospital mergers result in higher market concentration and decreased competition among healthcare providers, wages and local economies can suffer. Rural communities are particularly vulnerable to these effects.
This reality echoes recent findings from a joint report by MGMA and LocumTenens.com, which identified several challenges in rural healthcare.
Technology is the differentiator
Large healthcare organizations are investing in digital infrastructure faster than their smaller competitors can match — from workforce analytics and automated credentialing to expanded telehealth capabilities.
Healthcare networks approach remote care in different and surprising ways, but the value lies in innovating to increase patient access. Large systems have the resources to innovate quickly, while smaller organizations are at risk of falling behind. For healthcare leaders who want to stay competitive, embracing digital transformation and remote care is no longer optional — it’s a must.
Clinician loyalty is shifting
As agencies consolidate, the clinician experience is also changing. With fewer employer options and more centralized platforms, clinicians are experiencing a less personalized approach. In a labor market where burnout and shortages are top of mind, healthcare leaders should prioritize staffing partners with deep clinical networks of experienced, people-first clinicians. Retention-focused healthcare organizations will have a considerable advantage as the national shortage continues.
Recent findings from Jackson Physician Search and LocumTenens.com emphasize the importance of reconnecting physicians with their original sense of calling in medical careers, which leads to better patient outcomes and better retention.
Why LocumTenens.com is a powerful strategic partner
As health systems grow more competitive and better funded, the pressure to secure strong, strategic partnerships will only increase—shaping the future of healthcare operations. Every vendor relationship should be evaluated not only for cost—but also for the long-term value it brings.
If your organization is seeking innovative ways to quickly staff high-quality clinicians, build resilient teams or leverage innovative solutions to get ahead, our team of experts is here to help.
