AMN Matches Hospitals’ Staffing Needs With Traveling Nurses
BY MARION WEBB
Staff Writer
Chances are if you are a nurse who likes to ski, San Diego-based AMN Healthcare Services Inc. has a deal for you: A ticket to Aspen with travel and housing expenses paid for. For the next 13 weeks, it’s work during the day and apr & #269;s ski at night.
Life is good.
It’s a marketing pitch that has worked well for Steven Francis, who founded the travel nurse staffing firm together with his wife 16 years ago.
“It was amazing , the first day we opened, the phones were ringing, because we ran ads in national magazines,” said Francis, the president and CEO of AMN.
The lure of sunny beaches and snow-white peaks has kept the phones ringing.
According to a recent report by Todd B. Richter, an analyst at Banc of America Securities of New York, AMN is the largest travel nurse staffing firm in the nation, with 6,400 travelers on assignment and 2,500 hospital and health care clients nationwide.
The temporary health care staffing business is an $8.3 billion industry, out of which traveling nurses carve out a $1.2 billion market, said Richter. AMN is the industry leader followed by Cross Country Inc. of Boca Raton, Fla., which garnered about 40 percent the market.
And there’s great potential for growth as the industry continues to profit from the nation’s severe nursing shortage.
Not Enough Nurses
The vacancy rate for registered nurses at hospitals nationwide is anywhere from 8 percent to 16 percent. The supply of nurses long ago fell behind demand.
Francis is also affected by the shortage. He’s calling on nurses globally to fill that need , at least temporarily.
The former Nevada state Assembly member lost his bid for a seat in the state Senate, effectively ending his career in politics.
It was 1986, and Francis had been doing part-time work as a legislator while earning a living as a manager at Caesar’s Palace in Las Vegas.
Then came the election to run for state Senate.
“Before the race, I made a decision that I was either going to make a go at politics in a big way or was going to concentrate on my business,” he said.
He and his wife, Kimberly, started American Mobile Nurses in 1985 with a deep conviction that the nurse staffing business had great potential. Kimberly, a former nurse, previously ran the Las Vegas office of a national nurse staffing firm and knew the industry well.
The husband-and-wife team divided their duties, with Kimberly in charge of recruiting and training nurses, and establishing ties with hospital clients, while Steve did the number-crunching in the back office.
At the time, Francis said, most of the recruiting was done through newspaper ads.
The nurses would call an 800 number to get an application, which AMN would mail out.
Kimberly would then match the nurse’s skills with a temporary position at a hospital in the desired geographical location and sign a 13-week contractual agreement.
Because AMN didn’t have enough capital to pay the nurses directly, Francis agreed with the hospital to pay the nurse a salary and partial expenses. AMN was paid a recruiting fee.
A lot has changed since then, Francis said.
For one, in 1987, Francis and his wife decided to relocate their headquarters to San Diego.
A Southern California address, they knew, would resonate better with nurses living in cold climates.
Francis said temporary staffing tends to go up during the winter months to cover the rising admissions, especially in the Sun Belt states, where admissions would skyrocket because of the influx of elderly patients escaping the cold winters. But even in other states hospital admissions go up, because people tend to get sicker in winter, he said.
Cause And Effect
Francis blamed the Clinton administration at least in part for creating the nursing shortage.
“In the early ’90s when the Clintons came into office, hospitals thought they would become a government-run system and (began) reducing their nursing staffs to cover costs and become more competitive,” Francis said.
The advent of managed care also played a role, he added.
The severe nursing shortage, however, has multiple culprits. It resulted in part from a steep decline of enrollments at nursing schools. Critics also blame managed care for having created such hostile working conditions that nurses quit the profession altogether.
Stacey Volin, who has been on AMN’s payroll since 2000, said she left a Florida hospital after 10 years of working there as a nurse because administrators sacrificed quality of care to meet the bottom line.
“The nurses weren’t listened to and everything was about cost-cutting (which in turn) affected patient care,” Volin said.
Volin says AMN pays her $23 an hour plus $1,735 in monthly rent, which she says beats working on staff at a hospital.
Anne Davis, vice president of work force support services at Sharp HealthCare, said it’s tough to get nurses to join the hospital staff when agencies can give them a better deal.
Sharp currently has 81 AMN nurses working in their five-hospital system, Davis said.
“When they come in, we want them to hit the ground running,” she said. Most nurses do.
The most challenging issue for the temporary nurses is to learn the hospital’s policy and procedures and finding their way around.
She admitted there have been “performance issues” with travel nurses, but they were few and AMN was quick to resolve them.
Simple Strategy
Francis prides himself on providing first-class service to nurses and hospitals. After all, happy clients mean more business.
His strategy is simple: Establish good relationships with nurses, because they are the best source for free word-of-mouth advertising.
He also advocates providing fast, reliable service to hospitals and they’ll come back for more nurses. Also, grow through horizontal mergers.
In the last two years, AMN has acquired four smaller rivals , Medical Express in Boulder, Colo., Preferred Healthcare Staffing in Fort Lauderdale, Fla., Nurses Rx in Charlotte, N.C., and O’Grady-Peyton International, which seeks to recruit nurses to the United States from the United Kingdom, South Africa, New Zealand and Australia.
Richter applauded the expansionary move, reporting that AMN’s “multibrand strategy” will enable the firm to grow faster by reaching more nurses and different types of nurses.
Francis said the acquisitions have provided AMN some 1,500 travelers and 300 hospitals.
The Internet has also fostered AMN’s growth. AMN has long recognized the intrinsic value of the Internet by combining self-promotion with recruitment. First, whet a nurse’s interest by offering them a variety of fun destinations online and then follow up with a click on the mouse for a fast and easy application.
Francis said NurseZone.com, AMN’s Web site, has given the company’s business a boost.
On Nov. 13, 2001, AMN made its debut on Nasdaq and closed with a stock price of $21.66 that day.
Richter is bullish on AMN stock with a target price of $34. AMN stock closed at $23.50 on Feb. 6.
In the last nine months ended Sept. 30, AMN reported a net income of $4.6 million on revenues of $357 million.
Richter expects revenues to grow 29.2 percent in 2002 and 23.5 percent in 2003. That is assuming AMN’s traveler count grows 20 percent for 2002 and 16 percent for 2003.
