SIA’s May 2022 US Staffing Industry Forecast update estimates that the healthcare staffing industry grew 85% in 2021 to $39.8 billion, up from $21.5 billion in revenue for 2020. The increase in revenue was largely driven by an explosive 150% increase in the travel nurse segment. However, also contributing to the unprecedented demonstration of growth were 50% increases in allied health and per diem, and a 13% increase in revenue for locum tenens.
The rate at which this country has relied upon clinical staff over the past 36 months is far from typical. Though much of the demand could be attributed to pandemic-related patient care, there were several other factors at play, contributing to the record-breaking growth. Staff burnout drove healthcare workers away in large numbers. Similarly, aging clinical staff and a competitive landscape with scarce talent, particularly among a boutique list of medical specialties, were also among the players driving the need for additional staff. Now that 2021 is said and done, and 2022 is nearly halfway behind us, it is important to take a detailed look at the sector’s subsegments in order to predict where the industry is headed next.
As previously mentioned, the travel nurse segment boomed in 2021. Crisis rates became the norm as healthcare leaders scrambled to close gaps in the healthcare delivery continuum. While SIA projects a relatively modest 20% decline in this particular segment for 2022 and 2023, the decrease does not assume a significant decline in volume but rather reduced bill rates. For perspective, the average travel bill rate in 2020 was $90 per hour. Fast forward to 2021 and that figured climbed to an astounding, but unstainable, $125 per hour. In the absence of crisis rates, reflecting receding pandemic impacts, bill rates will undoubtedly follow suit – for most specialties. SIA’s projection also considers that while there are some areas where shortages will continue to plague healthcare leaders, the net trend will be a decline in revenues for the travel nurse segment.
With regard to per diem, revenues are expected to decline 10% year over year to $5.7 billion for 2022. Per diem nursing soared in 2021 due to incredible shortages among nursing staff. The projected decline for per diem is not as impactful as one might expect due to the likelihood that, going forward, the per diem segment will absorb some of the volume from crises travelers.
Following a surge in allied health to $6.5 billion in 2021, SIA is anticipating a 10% decline for both 2022 and 2023. Again, it is important to note this projected decline comes on the heels of peak growth demonstrated in 2021. To that end, even considering decreases in revenue for 2022 and 2023, the market is still expected to exceed pre-pandemic levels. The rationale for the decline in allied health for this year and next is that the segment’s performance was materially impacted by the uptick in pandemic-related respiratory therapy services, in addition to other specialties that were more heavily relied upon in 2021. Nonetheless, the decline is relatively moderate because allied health professionals tend to be quite flexible in scope, with the ability to gain the credentials needed to practice in a relatively short amount of time, which makes this segment an important tool for health systems looking to bridge staffing gaps.
Regarding locum tenens, our projection to $4.7 billion in 2022 represents a year-over-year increase of 7%. Locums tenens, which includes the advance practice nurses and physician extenders, is the only clinical segment that SIA projects will see an increase for 2022. For 2021, SIA data sources show that when Covid peaked, locum tenens declined; however, once surges quieted, increases in temporary physician volume and rates became apparent. Given this pattern, SIA expects that contingent mid- and senior-level providers will see healthy growth for 2022 and 2023. This outlook assumes the absence of another material Covid surge.
Overall, the healthcare outlook appears favorable if staffing partners can recruit and retain talent in a market consistently battling staffing scarcities. For SIA’s thoughts on the full staffing industry 2022 outlook, look to our May 2022 US Staffing Industry Forecast Update.
