Healthcare Staffing Report: May 9, 2019

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Allied health staffing experiences double-digit growth in the first quarter of 2019

The allied health staffing segment reported strong performance in the recent earnings calls of the two large publicly traded healthcare staffing companies. AMN Healthcare (NYSE: AMN) reported first-quarter 2019 revenue growth of 10% year over year in allied health staffing due to volume growth from improved therapy trends and continued strength in the imaging, lab and respiratory specialties. Cross Country Healthcare Inc. (NASD: CCRN) also reported double-digit growth in allied health staffing, with revenue increasing 20% in first quarter 2019 over prior year. These results were consistent with the 17% median year-over-year revenue growth reported for February 2019 in Staffing Industry Analysts’ recent Pulse Survey of 27 allied health staffing companies.

AMN reported first-quarter 2019 consolidated revenue growth of 2% over prior year, as the company signed new MSPs and expanded existing MSP relationships totaling more than $150 million year-to-date in gross spend under management. AMN reported it currently has $1.2 billion in MSP gross spend under management across all segments. First-quarter travel nurse revenue was flat from prior year due to a reduction in demand at a large client. Excluding the client impact, travel nurse revenue grew 5% over prior year. AMN reported strong demand with travel nurse orders being up more than 25% over prior year and at their highest level in two years.

“Our market appears to be relatively strong with demand up across most business lines. And while there is always concern of a future economic downturn that could change this environment, our current order trends and last week’s GDP numbers suggest that a slowdown is not likely to occur in the near term,” said Susan Salka, CEO of AMN Healthcare, during the first quarter 2019 earnings call.

Cross Country reported first-quarter consolidated revenue declined 7% over prior year due mainly to lower volumes across most of its businesses. Cross Country reported it had $400 million in MSP gross spend under management, with an additional $70 million in MSP gross spend contract wins to be ramped up or implemented. Despite a first-quarter decline in the travel and local nurse businesses over prior year, the company reported that demand levels were up compared to prior year.

Both companies reported continued year-over-year physician staffing declines in the first quarter, with AMN down 22% and Cross Country down 25%. AMN reported that overall locum tenens demand remains strong despite declines in the emergency medicine and hospitalist specialties. Both companies reported their management is working to stabilize the physician staffing businesses and have hired additional recruiter headcount. 

AMN reported first quarter 2019 revenue for its other workforce solutions segment was flat organically over prior year, but up 42% including acquisitions. AMN’s interim leadership and permanent placement businesses now comprise about half of the segment’s revenues.

Cross Country reiterated its intention to invest $10 million to $12 million in technology and updated its projected annual cost savings to be between $7 million and $8 million.

“Clearly, the industry is shifting with mobile-enabled models changing the paradigm for both customer and candidate,” Cross Country CEO Kevin Clark said. “As we continue to evolve our long-term IT roadmap, we will be moving swiftly towards unifying our platform to better integrate the experience for both customer and candidate and seamlessly interfacing with our middle and back office systems. I believe that these investments in our technology roadmap, along with others to come, will ultimately position Cross Country as a market innovator.”

Looking to the broader US healthcare staffing industry, respondents of SIA’s Pulse Survey reported positive growth in the month of February 2019 across all segments. Respondents reported year-over-year median revenue growth of 8% for travel nursing (n=28), 6% for per diem staffing (n=18), 33% for locum tenens staffing (n=13), and 17% for allied health staffing (n=27).

Additionally, SIA’s US Staffing Industry Forecast published on April 19 projects full-year 2019 revenue growth to be 3% for travel nursing, 4% for per diem staffing, 3% for locum tenens and 4% for allied health staffing.

To participate in and receive data from SIA’s Pulse Survey, click on this link or contact MemberServices@staffingindustry.com.

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