Ranchers in the Midwest have formed their own meatpacking company to disrupt the beef industry. This article looks at similarities between the locums and beef industries and what physicians can do to disrupt the locums industry like the ranchers are doing for theirs.
*This article was shared by KevinMD.
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America, we have a beef problem! The inflation rate is high, and the inflation on beef is even more outrageous. At the time of this article, inflation is hovering around 8-9%, while beef is priced at least 15-30% more than before Covid-19.
We are undoubtedly seeing corporate greed from the meatpacking companies as they have driven up prices throughout the Covid-19 pandemic. The numbers don’t make sense! Yes, the operating expenses have increased, but not to the same degree as the profits reported by the major meat-packing companies. Even though the larger meat-packing companies have reported tremendous profits, they have not proportionally compensated the ranchers for their cattle.
The current price gauging has motivated ranchers to disrupt their industry by cutting out the larger meat packing companies, the middleman, to have greater returns on their cattle. This article compares how the beef and locums industries have costly middlemen and what can be done about them by the Federal government.
In the beef industry, ranchers raise cattle until they become large enough to sell at auction to feedlots. Those feedlots fatten up the cattle and sell them to meatpacking companies. The meat is then processed, cut up, and sold to grocery stores and distributors by the meatpacking companies. Eventually, the beef is purchased by the consumer, us, the grocery shoppers.
These days, ranchers make very little profit, if any, from selling their cattle at auctions. The feedlots and grocery stores make only a small cut, whereas the meatpacking companies, the largest middleman, profit most from selling beef.
Physicians are like ranchers that continually get used and abused by the system for others to profit off.
Medical facilities (i.e., hospitals/clinics) are like grocery shoppers, getting ripped off for the same services physicians provided before Covid.
Vendor management systems and job posting boards are like feedlots that take a small cut to be a part of the madness.
Locums agencies are like the meat-packing companies racking in crazy profits off physician services.
Ranchers are frustrated by how much the meatpackers are making off of their hard work. This is especially true in the current market where meatpackers are making significant profits, yet cattlemen do not see greater returns on their cattle. If meatpackers raise the price of beef at the grocery stores, ranchers do not see more in return because they can only sell their cattle at auction, where the price does not fluctuate much.
Wouldn’t this upset you? Well, it certainly has upset the ranchers.
To eliminate the need for these large meatpacking companies and to disrupt their industry, ranchers in the Midwest have invested in their own meatpacking company called, Sustainable Beef, LLC. The aim is to run this business similarly to a co-op so that cattlemen can make more selling their cattle, knowing that they have a small ownership in the meatpacking company. The idea has so much traction that even Walmart has invested in Sustainable Beef to lower the price of beef for their customers and treat the ranchers better.
In 2022, President Biden raised his concern about the lack of competition in the beef industry, leading to beef prices that far outpaced the inflation rate. Recognizing that greater competition in the market could bring down the cost of beef for Americans, Biden’s administration pledged to provide $1 billion in grants and loans for new independent meatpacking processing plants. In addition, the USDA has made changes to the Packers and Stockyards Act so that there is greater transparency between the ranchers and meat processing plants.
Just as the meatpacking companies have exploited the current demand for beef and their control over ranchers for their financial gains, so have the locums agencies. The staffing agencies have used the shortage of healthcare workers to boost their revenues. It’s time for a change in the locums industry!
We need a “direct-to-consumer” model that allows physicians to contract directly with medical facilities without needing a middleman for locums-type work.
Unlike the beef industry, the federal government has yet to set any initiatives to combat the cost of staffing agencies that supply physicians, allied health professionals, and nurses, which makes up a large part of our current healthcare cost.
The Biden administration should invest the money as they did into the beef industry to make changes that could help independent physicians contract directly with medical facilities rather than having to use staffing agencies. This would allow facilities to save money and pay physicians fairly. The items to consider for the administration would be the following:
Ranchers are fed up with the meatpackers profiting off their work and founded Sustainable Beef to circumvent the industry’s middleman. Much like Walmart, which sees the importance of working directly with ranchers in the Sustainable Beef model, medical facilities should value contracting directly with physicians rather than staffing agencies.
Mr. President, how will you help us independent physicians that want to contract directly with facilities?