Hallmark Health Care Solutions built an artificial intelligence-enabled platform to give health systems more visibility and control of workforce cost, capacity and incentives.
U.S. healthcare labor costs have surpassed $900 billion annually, with the American Hospital Association reporting that workforce spending now eclipses $1 trillion per year. Labor expenses—including wages, benefits and premium contract staffing—consistently make up 50% to 60% of total health system operating budgets.
Yet workforce investment remains a "black box," according to Bharat Sundaram, CEO of Hallmark Health Care Solutions. Decisions remain fragmented across departments, systems and budgets. Staffing, scheduling, compensation and contingent talent management are often managed independently, leaving leaders without a clear view of how decisions in one area affect performance across the enterprise.
"There's a lack of visibility in data intelligence and limited automation to manage that $900 billion. You have these systems of record that do a great job, but were not built to address this—the EHR [electronic health record system] records clinical care, the ERP records resources, the HRAs and scheduling system record workforce activity and attributes," Sundaram told Fierce Healthcare.
"Legacy healthcare IT systems were not designed to coordinate decisions at the enterprise level. As financial pressures intensify and shortages persist, health systems need a way to manage their workforce as an interconnected ecosystem rather than a collection of individual programs," he noted.
"We thought that there was a real opportunity to build a new layer in the healthcare IT stack that sits both alongside these systems of record, but also on top and leverages data from those other systems of record to provide visibility and control of cost, capacity and incentive across the entire workforce," said Sundaram, who joined Hallmark as CEO a year ago after spending nine years at Vizient, including a number of years as president and chief operating officer.
Hallmark, a decade-old technology company focused on workforce solutions, unveiled this week its AI-enabled platform, called a workforce operating system, that surfaces actionable data and drives automation of key processes across workforce resourcing and compensation.
The result is a more coordinated approach that helps leaders improve financial performance, drive engagement and support better patient care, according to the company.
"It's difficult to fix what you can't see and manage," Sundaram said. "Typically, workforce costs have been managed in silos, so physicians, nursing, non-clinical and full-time float pool, contract labor in another dimension. We saw this opportunity for this workforce operating system to be able to provide that visibility and control across the entire workforce."
But Hallmark's platform doesn't just sit on top of existing systems of record, it also "brings something to the potluck," as Sundaram described it.
"We bring unique data in terms of what's happening in market rates and physician contracts, so we don't just leverage that data, but we also bring in our own proprietary, first-party data into this workforce operating system," he noted. "So, what's happening in the market in terms of rates. What are staff preferences in terms of when they want to go work? What's the productivity of my physicians from an RVU perspective? What are my provider contract terms? Those all live in different silos or don't live at all. We aggregate all that information together, both information that exists in systems of record like Epic, Workday and UKG as well as our own proprietary information, and then provide that connection and visibility that doesn't currently exist."
Hallmark currently works with more than 50 health systems, including Mass General Brigham and Trinity Health, and medical groups and the company manages more than $10 billion in physician compensation annually. The company's platform enables the sourcing of more than 25,000 clinicians and supports more than 100,000 daily users.
Health systems partnering with Hallmark have seen significant measurable results, including reducing contingent labor expenses by 15% to 25% and lowering overtime costs by an average of 25%. Health systems using the AI-enabled platform also have reported an 80% reduction in compensation errors.
"A $1 billion health system can be driving $20 to $25 million in margin improvement through use of our solutions," Sundaram said. He ticked off several measurable results that health systems have reported so far—one health system drove a 20% reduction in agency rates and a 90-hospital health system reduced agency spend by more than 50%. Norton Healthcare reduced their administrative burden on managing physician compensation by 30%.
"When folks are deploying the entire platform, there's real material margin that we can drive, and we calibrate it to $25 million for every $1 billion of revenue," Sundaram noted.
"Hallmark has been a great partner with us, has always been able to pivot when we have pivoted, and always helps us come up with solutions to make it easier and more transparent,” Tracie Martin, vice president of provider compensation and contracting at CHRISTUS Health, said in a statement. "The biggest differentiator between Hallmark and other vendors, I think right now, is our partnership."
For health systems and medical groups, costs are growing significantly faster than inflation. An aging population continues to drive demand for care, while clinician shortages exacerbate access issues for patients. Organizations need a modernized approach to manage workforce operations, according to Hallmark executives.
"Our work with the Hallmark team has improved visibility, standardization, and efficiency to our agency request, sourcing, onboarding, and general management," said Tyler French, assistant vice president at UC Health. "This was something that was fragmented across our system before, and doing so has both tightened compliance and reduced redundant work."
Hallmark customers are using different components and modules of the AI platform, Sundaram noted. Hallmark pairs its AI-enabled platform with a team of healthcare operators and workforce experts who help organizations align stakeholders, simplify operational complexity and achieve measurable outcomes, according to the company.
"Health systems, when they're making technology decisions, are evaluating things on kind of two axes: one is the ROI and the return that they get, and the second is the ease of the lift. We want to be high ROI and easy to deploy. We give folks low friction entry points to enter into different modules into the operating system as well as services to support them, and then they grow into the rest of those capabilities over time as they prove success," Sundaram said.
Sundaram stressed that the use of AI for workforce management is not to reduce staff but to automate workforce resourcing and more efficiently manage operations to take the administrative burden off department leaders.
"Healthcare has a fundamental workforce shortage issue, there's not enough staff to manage the growth in demand. The focus is on, how do I grow and serve my patients effectively, while I know I'm constrained from a staff perspective? This is about helping health systems scale while they still have this shortage issue that they have to address," he said.
Moving forward, Hallmark plans to expand its library of AI agents and use AI to proactively recommend next actions to help health systems manage workforce strategy.