Agency owners getting rich off the backs of nurses?

  1. Doesnt it just make you sick??????

    This entire article is all about how lucrative travel agencies are...... for the OWNERS of the travel agencies! And about what great timing the owners had to be cashing in on "the shortage".

    This guy's travel company managed to earn $518 MILLION for him just last year!! $518 MILLION $$$$ for putting nurses into assignments every few weeks. And what % of those hundreds of MILLIONS did the NURSES who did the actual back-breaking work get? According to the article, at the most, $29/hr.....
    It makes me sick........

    Not a word about any benefit to the nurses other than working in a new city and not dealing with hospital politics. As if thats all we need. I know travelers who are paid less than $25/hr for the privilege. Considering the MILLIONS that the owners are pulling inoff of our backs, its a disgrace.

    How interesting that this owner in the article is a former state legislator. I wonder what he knew. Good thing he's not STILL a legislator. He might not want to see the nursing "shortage" solved. Hmmm.... thats a thought. I wonder if any of these agencies are trying to make sure the nursing "shortage" ISNT solved. Might take away their cash-cow.

    I still cant believe it. The nurses working for this guy's travel company managed to earn HIM $518 MILLION just last year alone!! And the article is bragging about it! $518 MILLION $$$$ for sitting in an office & passing nurses around to hospitals every few weeks. And what did the NURSES get???????.......

    <<<
    March 2, 2002
    Tony Fong
    San Diego Union Tribune

    "Filling the need for nurses
    Companies profit as they respond to shortage

    As hospitals and health-care administrators scramble to deal with a widespread shortage of nurses, a number of companies have emerged to capitalize on the deficiency.

    Companies such as San Diego-based AMN Healthcare Services have built a strong business out of supplying temporary nurses to hospitals suffering from a shortage of qualified staffers.By bolstering its roster of nurses and their number of assignments, AMN has seen its revenue grow nearly SIXFOLD during the past three years.

    The demand for nursing services has been so strong that AMN and a competitor, Cross Country Inc. of Boca Raton, Fla., were able to buck the weak market for public stock offerings last year.

    AMN went public Nov. 13, raising $175 MILLION. Its shares closed yesterday at $25.95, up more than 52 percent from the $17 offering price. Cross Country, which went public Oct. 25, closed yesterday at $26.64, up more than 56 percent from its IPO.

    Riding the current bullish wave surrounding the industry, Medical Staffing Network, also in Boca Raton, filed for a public offering in early February.

    Since the late 1990s, Wall Street had viewed health care skeptically, but lately the industry has shown signs of life. And for nurse staffing companies, the time has been ripe for investors.

    "Right now, AMN is positioned in one of the hottest sectors," said Robert Mains, a health-care analyst at Advest Group in Saratoga Springs, N.Y., a minority underwriter in AMN's public offering.

    Fueling such sentiments is a nationwide nursing shortage that experts say is going to get worse because of a shrinking supply of nurses and an expanding need for them.

    Unlike some of its competitors, AMN deals only with travel nurses, not per-diem nurses. A per-diem nurse's assignments can last as little as one shift, but travel nurses typically work on 13-week contracts. They can also crisscross the country, going from one assignment to another.

    Travel nurses are not a long-term solution for the nursing shortage, but the demand is so great that hospitals have no choice but to use them, said Ann Davis, a vice president with the Sharp HealthCare hospital system.

    Sharp typically uses about 100 travel nurses at any time, including 80 from AMN, Davis said.

    "The thing that works nicely is they're here for a 13-week contract . . . and if you need supplemental staff, it's better to have them in, have them oriented and have them stay for a length of time," Davis said.

    Founded in 1985 by Steven C. Francis and his wife, Gayle, AMN was headquartered in Las Vegas before the couple moved it to San Diego two years later. Steven Francis is a former Nevada state assemblyman.

    The company now operates five brands: American Mobile Healthcare, Medical Express, Preferred Healthcare Staffing, Nurses Rx and O'Grady-Peyton International.

    During 2001, AMN had revenue of $517.8 MILLION, a nearly SIXFOLD increase from $87.7 million in 1998. AMN has 25,000 nurses in its database, of whom 6,883 were on assignment during the fourth quarter of 2001, up from 4,048 in the year-before period. AMN has 800 corporate employees, including 550 locally.

    Haas Wheat & Partners, an equity fund based in Dallas, has a 65 percent ownership stake in the company.

    The company contracts with 2,500 hospitals in 50 states, constituting 40 percent of all acute-care hospitals and half of all acute-care beds in the country, making it the biggest travel-nurse company in the nation, AMN officials said.

    Although Francis said that "the health of our industry isn't just reliant on the nursing shortage," the shortage obviously was a major factor in the company's decision to go public when it did.

    During the fall, when AMN and Cross Country went public, Wall Street was enduring one of its worst years for IPOs. Just 87 IPOs were completed in 2001, the fewest since 1979. In September, there were no public offerings, as the effects of terrorist attacks and a deteriorating economy rattled the markets.

    While hospitals have always had to deal with staffing shortages, what makes the current shortage opportune for companies like AMN is its magnitude and the fact that no short-term solutions are in sight, analysts said.

    The dilemma is this: There has been an exodus of nurses from the profession, and fewer students are choosing the field. At the same time, as baby boomers grow older, there is an increasing need for nurses.

    "In the past, there was a feeling the industry would right itself," but that is no longer true, said Mains of Advest.

    This year, the Federation of American Hospitals and the American Hospital Association said one out of seven hospitals nationwide reported having more than 20 percent of their registered-nursing positions unfilled.

    While hospitals have offered significant bonuses and recruited nurses from outside the United States, those measures have shown only marginal benefits.

    Similarly, the effects of the recent nurse-to-patient ratio requirements established by California are unclear. While nursing officials hail it as a major step toward easing staffing problems, hospital administrators warn that there isn't a large-enough pool of nurses from which to hire. As a result, hospitals may have to mothball beds to meet the requirements.

    In the meantime, hospitals have increasingly relied on nurse staffing companies to fill the holes.

    Hospitals spent $7.2 billion in 2000 for temporary employees, the majority of whom were nurses, according to the Staffing Industry Report, an industry newsletter. For 2002, it estimated that spending will increase to $10.6 billion.

    The current shortage has resulted in more nurses going into the travel-nurse sector, Francis said.

    "They're able to get higher pay rates because there's a demand . . . but there's also more opportunity for them," he said. "When you think about it, you can go anywhere in the country and work."

    AMN charges hospitals an average of about $45 an hour for its nurses and pays the nurses about $29. AMN also pays for its nurses' housing and health insurance and offers 401(k) benefits.>>>

    http://www.uniontrib.com/news/union...ews_1b2amn.html


    $518 MILLION dollars last year alone & the RN made just $29/hr in California. These people are becoming millionaires off the backs of nurses. Same as hospital executives.

    We should all become independent contractors and cut out the middle man. WE have the skills that are in demand. Why shouldnt WE be the ones earning the big bucks for those skills. Geez..... it never ends. Why do nurses let everybody else feed off of them?

    Comments can be sent to the writer at:

    tony.fong@uniontrib.com
    •  
  2. 33 Comments

  3. by   nightingale
    Hence one of the reason I am attempting to independently contract on my own.....

    B.
  4. by   scrappy
    Originally posted by nightngale1998
    Hence one of the reason I am attempting to independently contract on my own.....

    B.
    I would be interested in idependently contracting, but really have no clue on how to go about it. If you have any tips let me know, thanks
  5. by   caduca
    Ultimately, the nurse has the responsibility to choose the best agency for themselves and (hopefully) the nursing industry. No agency can be a success without nurses. Essentially, the agency with the most nurses wins in the market. Some good questions to ask when selecting an agency are:

    1) What % profit do you expect for your services?
    2) How are you competitively pricing in the market to ensure availability of work for the nurse?
    3) What hospitals can supply you references to both your quality and partnership?
    4) How long have you been a staffing firm?
    5) What do you bring to the table that warrants a nurse's employment with you?

    Hope this helps. I am currently in the business of decreasing profit margins for staffing agencies. I bill the hospitals less than my competitors. I pay the nurse more than my competitors, and my regulatory compliance and quality are the best. This volume pricing has led to recruitment attempts from competitors, but unfortunately not to embrace the low-margin/high volume concept- instead just to remove me as competition. It has only fueled my mission. NURSES- BE AWARE of your agency. We are all in this together- which brings me to one last question to ask-

    6) Does this agency have a nurse manager and when was the last time he/she touched a patient?

    As for me- I cover 7 states, hundreds of hospitals, and thousands of nurses. Out of touch? Hardly- I pull my third shift this month on Saturday.
    Last edit by caduca on Apr 8, '02
  6. by   theduanes
    I agree, that independently contracting is the way to go!

    I have done quite well at contracting myself out for the last 6 years. My advice to all who want to independently contract is, don't give up and perservere!!!!
  7. by   Hardknox
    What do you think the hospitals have been doing to us all these years? CNBC had the CEO of Healthcare South on this am...Fortune Magazine said he was highly overcompensated for his performance. You should have heard him tapdance around that question. But these corporations are making HUGE profits on the backs of nurses and patients. Yes, I agree independent contracting is the way to go. But have you ever been to a staff meeting where nurses spoke with one voice? Until that happens, we'll continue to get the short end of the stick. Nurses are their own worst enemies.
  8. by   Dietmar2212
    Don't stay stuff like that. They are my closest friends. They earned their money- they started that company in the first place.

    You shold have seen how hard they worked when it first started... they deserve what they have.
  9. by   ratchit
    The $518 million is the total revenue of AMH. That is the total amount they billed hospitals for.

    Out of that $518 million came the nurses' salary, benefits, insurance, his buildings and overhead, his office staff's salary and benefits, the housing they provide travelers, their advertising, etc.

    I'm not saying they don't do well for themselves. But a revenue of $518 million is not the same thing as the CEO getting a $518 million dollar paycheck.
  10. by   GirlArcher
    Nurses speaking with one voice is a long time off, sad to say, but true. We seem to never agree or meet in the middle on issues, or stand up (united) to "the big guy" with regards to union/contract negotiations. Someone always caves.
    Quote from Hardknox
    What do you think the hospitals have been doing to us all these years? CNBC had the CEO of Healthcare South on this am...Fortune Magazine said he was highly overcompensated for his performance. You should have heard him tapdance around that question. But these corporations are making HUGE profits on the backs of nurses and patients. Yes, I agree independent contracting is the way to go. But have you ever been to a staff meeting where nurses spoke with one voice? Until that happens, we'll continue to get the short end of the stick. Nurses are their own worst enemies.
  11. by   Sheri257
    This is one of the reasons I'm not sure the practice of open bidding is a bad thing for nurses. This is where the hospital asks nurses to bid for certain jobs directly, instead of going through a middle man.

    It's controversial because nurses do compete against each other. But, from what I understand, they still make more than what a registry would pay them, and the hospital saves money since they don't have to pay the extra registry costs.

    Last edit by Sheri257 on Sep 14, '04
  12. by   Sheri257
    Funny but, since that article was published two years ago, both of these companies stocks have declined due to less than stellar earnings. And a law firm has filed a shareholder lawsuit against Cross Country just this month.

  13. by   judah
    Quote from lizz
    Funny but, since that article was published two years ago, both of these companies stocks have declined due to less than stellar earnings. And a law firm has filed a shareholder lawsuit against Cross Country just this month.

    Sorry I came in on this late. What companies were you referrng to might I ask?
    judah. Sorry about that I found out how to move to page 1. Thanks
    Last edit by judah on Sep 14, '04
  14. by   vortex72
    This doesnt bother me at all. Its called business. If you want a piece of the pie. work a ton of overtime, save up money, do research, and start your own agency.

    Then after struggling and working your butt off for a few years, MAYBE you can make some big bucks too. Would you have earned it? YES!

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Agency owners getting rich off the backs of nurses?