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Analysts at UBS upgraded AMN Healthcare Services Inc. (NYSE: AHS) from Neutral to Buy. AMN Healthcare Services shares have gained 59.24% over the past 52 weeks, while the S&P 500 index has surged 12.80% in the same period. AMN Healthcare...
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NEW YORK (TheStreet) -- Shares of AMN Healthcare Services were gaining 13.8% to $22.96 on heavy trading volume Friday after the healthcare staffing company beat analysts' estimates for earnings in the fourth quarter. AMN Healthcare reported...


AMN Healthcare Services, Inc. (NYSE:AHS) is the largest temporary healthcare staffing company in the U.S. by revenue, earning over $750 million in revenue.[1] AMN provides temporary staffing of nurses, physicians (locum tenens), and medical assistants, as well as permanent physician placement services.

Economic downturns threaten temporary staffing companies, as clients prefer permanent staff to temporary professionals.[2] Despite this, long-term growth in healthcare staffing is driven by the rising shortage of healthcare professionals, notably registered nurses,[3] and growing demand fueled by the rapidly aging baby boomers.

Company Overview

Business Segments[4]

  • Nurse & Allied Healthcare Staffing (57% of revenue) - This segment provides hospitals and healthcare facilities with temporary professionals, typically for periods of four to 26 weeks. Nurses account for 84% of this segment's placements; since nurses account for around 25% of hospitals' operating expenses, they readily enlist staffing agencies to find temporary nurses. Therapists, medical assistants, and technical staff comprise the other 10% of the Nurse & Allied Healthcare Staffing segment's business.
  • Locum tenens staffing segment (38% of revenue) - Locum tenens staffing includes the temporary placement of physicians as independent contractors in healthcare settings. Assignment lengths range from a few days to one year, with the average assignment being a multi-week contract.
  • Physician permanent placement services segment (5% of revenue) - In this segment, AMN charges hospitals a fee to find permanent physicians, as well as variable fees tied to the physicians' work after their placement. The strong demand for physicians, coupled with the overlap of clients seeking physicians for temporary and permanent assignments, lets AMN cross-sell its locum tenens and permanent placement services.

Business Growth

FY 2009 (ended December 31, 2009)[1]

  • Net revenue fell 38% to $760 million. The company attributes the fall to a decrease in the average number of temporary healthcare professionals on assignment in the nurse and allied healthcare staffing segment.
  • The company incurred a net loss of $122 million compared to a gain of $34 million in the previous year.

Trends and Forces

Shortage of nurses in the U.S. growing

Between 2000 and 2005, the shortage of qualified nurses in the U.S. increased from 110,800 to 218,800; in 2005, 10% of all demand went unmet as a result of this shortage.[5] As nurses become more and more scarce relative to demand, hospitals and healthcare facilities turn to staffing agencies like AMN to meet their staffing needs. On the other hand, as competition increases for qualified nurses, companies have to offer higher compensation and more attractive benefits to stay competitive.

The aging U.S. population needs more medical care

According to estimates from the U.S. Census Bureau, the number of Americans age 65 or over is growing faster than the general population. As a wave of baby boomers hits 65, this growth is expected to outpace growth of people age 64 and younger by as much as four times by the year 2020. Older people require much more healthcare per capita than younger age groups, meaning that the U.S. healthcare industry is having to grow to accommodate the additional demand.[6] As hospitals and healthcare facilities find themselves short of nurses, physicians, and other medical professionals, staffing firms like AMN benefit from the increased demand for trained medical staff.

Competition & Market Share

AMN Healthcare is the largest firm by revenue in the three fastest-growing segments of the healthcare staffing market: travel nurse and allied healthcare, locum tenens and physician permanent placement.[7] In addition to competing with recruiting departments and interim staffing pools of healthcare facilities, some of the company’s main competitors in the sector include: [8]


  1. 1.0 1.1 AHS 2009 10-K "Selected Financial Data" pg. 21
  2. AHS 2009 10-K "Risk Factors" pg. 10-17
  3. The Marquette Tribute "Nursing Shortage to Worsen" Page 2
  4. AHS 2009 10-K "Business Overview" pg. 6-10
  5. HRSA "What is Behind HRSA's Projected Supply, Demand, and Shortage of Registered Nurses?"
  6. HRSA - Nursing Demand Model
  7. AMN Healthcare (AHS) Annual Report 2007 Page 1
  8. AMN Healthcare (AHS) Form 10-K FY 2007 "Business Overview" Page 3
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