Cross Country Healthcare (NASD: CCRN) reported the return of Kevin Clark, its co-founder from company inception in 1986 and CEO/chairman through 1994. The company anticipates its plan to return to consolidated, organic revenue growth and improved profitability will include technology investments of $10 million to $12 million, as well as cost structure initiatives with expected savings of $5 million in 2019.
“We intend to be very deliberate in our approach of not taking any action which could inhibit our ability to grow and we will look to execute quickly in 2019 to minimize distractions and focus on growing the company,” said Clark during Cross Country’s fourth-quarter 2018 earnings call. “No company has ever cut their way to growth, so this is about right-sizing our infrastructure and continuing to invest in revenue-generating activities, improving our speed to market and overall ease of engagement with clients and healthcare professionals.”
Despite winning 13 new MSP clients with expected new gross spend under management totaling $80 million, Cross Country reported a 6% decline in 2018 consolidated revenue. Fourth-quarter 2018 nurse and allied staffing revenue decreased 7% year over year, driven mainly by volume declines in travel nurse and local staffing, partially offset by increases in travel allied and education healthcare staffing.
Physician staffing revenue decreased 19% over prior year, driven by lower volume. Clark announced the promotion of Karen Mote to president of physician staffing. Having been with Cross Country since 1998, she most recently led the advanced practice business, which experienced double-digit growth over the past two years.
Both Cross Country and AMN Healthcare (NYSE: AMN) reported largely favorable and positive travel nurse order trends offset by a stabilizing pricing environment with fewer premium rate assignments. Specifically, Cross Country reported travel nurse order levels to be 20% higher compared with the beginning of 2018.
AMN reported full-year 2018 consolidated revenue growth of 7%, as the company won new MSPs totaling an estimated $230 million in gross spend under management. Fourth-quarter 2018 travel nurse revenue increased 2% and allied staffing revenue grew 8% over prior year. AMN expects first quarter 2019 nurse and allied staffing revenue to be down 1% to 2% year over year due mainly to lower census experienced by a large client. Excluding the impact of this client, AMN expects segment revenue to be up 5% over the prior year.
AMN’s fourth quarter 2018 locum tenens revenue decreased 24%, driven mainly by declines in the emergency medicine and hospitalist specialties, as well as internal business disruption from a recent technology implementation. AMN continues to add locum tenens MSP clients, which now represent 20% of its physician staffing business.
AMN reported 1% year over year organic growth in revenue from its other workforce solutions during the fourth quarter of 2018. The company continued to expand its platform of healthcare workforce solutions offerings with its January 2019 acquisition of Silversheet, a cloud-based provider of digital credentialing and privileging software and services.
Looking beyond AMN and Cross Country to the broader US healthcare staffing industry, SIA’s US Staffing Industry Pulse Survey suggests revenue growth in the industry. Healthcare staffing firms reported positive growth year over year across all segments during fourth quarter 2018. In December 2018, respondents reported year-over-year median revenue growth of 6% for travel nursing, 4% for per diem staffing, 10% for allied health staffing and 27% for locum tenens staffing. To participate in and receive data from the Pulse Survey, click on this link or contact Sreedevi Thiyagarajan at SThiyagarajan@staffingindustry.com.
