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Local Cos. Ride Wave of Travel Nursing Demand

Nationally, more travel nurses hit the road in 2016, 2015 and 2014 compared with the prior three years, a boon for local companies.

San Diego is viewed as one of the centers of the travel nursing industry, given that those headquartered here include AMN Healthcare Inc., the U.S.’s largest health care and nurse staffing company; another heavyweight, Aya Healthcare Inc.; and the smaller but fast-expanding Host Healthcare Inc.

These growing companies recruit, screen and hire registered nurses who temporarily work at hospitals and other health care facilities. The companies also help orient new employees in unfamiliar surroundings, and offer staff management strategies.

For hospitals, travel nurses can cost more, but they also play a critical role in filling in gaps so more patients can be served.

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Huge Growth in 2015

The U.S. travel nursing industry reached $3.5 billion in 2015, 40 percent year-over-year growth, propelled by more people gaining coverage under the Affordable Care Act, an aging population and a revitalized economy, according to Staffing Industry Analysts. Last year’s numbers have yet to be finalized, but indicate 25 percent industry growth.

“2015 and 2016 were strong years for health care staffing as an influx of demand from the newly insured met a relatively fixed level of supply”, said Tony Gregoire, director of research for the Americas, Staffing Industry Analysts.

The firm projects the travel nurse industry will continue expanding, albeit at a slower pace: a 10 percent increase in 2017 and a 6 percent rise in 2018.

Landry Seedig, division president of travel nursing at AMN Healthcare, one of the local companies benefitting from the increased demand in travel nurses.

Seasonal Help

Landry Seedig, division president of travel nursing at AMN, said travel nurses fill seasonal voids throughout the country, from ski season in Colorado to Florida’s sunbirds flocking there in winter.

But many areas, particularly rural communities, have a constant need for nurses. Seedig cited an estimate of 575,000 unfilled health care jobs nationally in June 2017, according to the U.S. Bureau of Labor Statistics, many of which are assumed to be in nursing given that it’s the largest health care occupation.

Driving this widening gap: Nurses retiring at accelerated rates and the growing elderly population, trends Seedig said will increase travel nursing demand for years to come.

“There’s really not enough nurses to go around in the United States,” Seedig said.

AMN was founded in 1985 as American Mobile Nurses, and two years later moved to San Diego from Las Vegas. As for why it remains here, Seedig pointed to the culture, weather and strong universities attracting top talent.

Today AMN has 1,112 employees in the county and has evolved to offer additional health care staffing services. As a whole the business has achieved robust revenue growth — $1.9 billion of revenue in 2016, $1.5 billion in 2015 and $1 billion in 2014, with travel nursing representing a large chunk of those figures.

Aya Healthcare CEO Alan Braynin
Photo courtesy Aya Healthcare

Slowing Down?

Not everyone is expecting continued solid growth. Some say the industry may be slowing. According to Aya’s Aug. 28 index of 3,000 hospitals there is a 68.5 percent year-over-year drop in travel nurse orders.

Aya CEO Alan Braynin said open travel nurse orders this year have been down across the industry on account of hospitals hiring more internal nurses to meet demand rather than turning to temporary staffing.

“They’ve been playing catch up,” Braynin said of the hospitals. “Now you have travel nurse volumes that are more around historical levels.”

Braynin said the downturn hasn’t extended to Aya, largely due to the company landing exclusive accounts this year. The company, which has 700 corporate employees, declined to share revenue figures, but the company was No. 7 on Staffing Industry Analyst’s 2017 list of largest health care staffing firms.

Travel nurse subcontractors, Braynin said, are most likely to feel the downturn. That’s because large companies in good times subcontract a good chunk of their orders, but faced with a smaller pie, they do more of the work in-house.

Braynin said it’s tough to say whether this year’s decrease in travel nursing orders will continue, and the uncertain fate of the Affordable Care Act complicates the picture.

Amid this uncertainty, the industry remains fiercely competitive, which can filter into the courtroom. AMN and Aya are locked in a legal battle, after Aya earlier this year filed a federal lawsuit alleging that AMN is engaged in anti-competitive behaviors, including restricting the supply of medical travelers, according to a Staffing Industry Analysts Feb. 7 article. AMN responded by calling the lawsuit meritless and said it’s confident the court will uphold its practices.

Travel nurses are typically paid by the staffing agency, which in turn is paid by the hospital or health care facility.

Host Healthcare CEO and founder Adam Francis
Photo courtesy Host Healthcare

Bigger Digital Footprints

For staffing agencies, the war for talent is increasingly being waged online. The three-ring binders with candidate names two decades ago gave way to digital analytics that guide the recruitment process, such as locating where jobs are and the people who match them, along with the best channels to reach candidates.

Host CEO and founder Adam Francis said the company boasts a robust digital footprint, all important these days.

“The company that has the strongest candidates is the one most likely to get the placements,” he said. “That was quite different five years ago, where there was an excess supply of nurses and not jobs, at least for travel nurses. The market has shifted from facility to candidate-driven.”

But Host still emphasizes personal customer service. After all, Francis said, the industry is still very much a people business.

“If you’re a qualified nurse, you can really choose whatever company you want to travel with,” Francis said. “What it comes down to is the relationship they form with the company. They want to know the company has their back and is willing to go above and beyond, where they don’t feel like a number.”

Host, founded in 2012 and the newest of the three companies, posted three-year revenue growth of 954 percent, with $26.9 million in revenue in 2016. Francis became acquainted with the industry while growing up because his dad, Steve Francis, was the co-founder of AMN.

“The industry had taken a big dive after the financial crisis,” Adam Francis said. “It was starting to come back strong in 2011, 2012. So I started to look at the projections and saw a big opportunity for growth. That’s how I decided to go into the travel nurse industry.”

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