Travel nurse firm cashes in on pandemic's staff shortages
AMN Healthcare, one of the largest health care staffing firms, reported record travel nurse revenue and profits last year, especially in the fourth quarter.
Why it matters: The Omicron variant of the coronavirus battered hospital staffs, especially among nurses, and pushed hospitals to pay up for whatever help they could get — and those same forces benefited companies who place traveling nurses.
By the numbers: AMN's business that places travel nurses recorded more than $1 billion of revenue in the fourth quarter, more than double the amount from the same time in 2020 and the highest quarterly amount ever for AMN.
- Operating profit margin in AMN's travel nurse division hit 16.4% in the fourth quarter — higher than the usual 13–14% margin.
How it works: Staffing companies bill hospitals hourly rates for temporary nurses, usually for 13-week stints, and they take a percentage of that billing rate.
- Many travel nurses have been making at least $90 an hour during the pandemic, as hospitals struggle to keep their beds staffed.
- AMN CEO Susan Salka told Wall Street investors yesterday the company's billing rates have doubled, but nurse compensation has tripled. "Nurses are making more money right now," she said.
Between the lines: AMN's financial riches stem from the pricing power that comes with placing a highly desired worker, but also a larger number of people have been flocking to the lucrative (but demanding) world of travel nursing.
- Almost 15,000 nurses and other traveling staff were on assignment during the quarter, 50% higher than the same time in 2020.
- The higher profit margins will catch the eye of hospitals and lawmakers, who have urged antitrust authorities to investigate price-gouging among nurse staffing firms.
Go deeper: STAT explored how private equity has been getting into the travel nurse business.