National Nursing Shortage May Prove Long-term Boon for This Staffer

Gene J. is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.

The nursing staffing shortage that threatens the nation’s hospitals may be a boon for some health care providers, like AMN Healthcare Services (NYSE: AHS), the largest temporary health staffing services company in the U.S.

AMN has had 11 consecutive quarters of growth, per its most recent quarterly earnings report, released just last month. The firm’s third quarter 2012 financial results far surpassed guidance for both revenue and adjusted EBITDA. Keep an eye on this firm; it's definitely one to watch for the long-term.

Employment trends are definitely the friend of this firm, and others like it. A new study of close to 3000 nurses registered with the sites RN.com and NurseZone.com, called the 2012 Survey of Registered Nurses, shows that nearly one-third of nurses are going to take steps in the next three years to “reduce their current workload.” This includes seeking part-time, rather than full-time, jobs.

This finding comes at a time when hospitals are reporting cash crunches from the notoriously slow paying Medicaid program, and laying off staff, or reducing hours of nursing staff. The state of Illinois, for instance, is approximately $1 billion in arrears in its Medicaid payments to hospitals and medical providers, according to local news reports. Providers there must wait 160 days – nearly double the national average – to be paid for medical services rendered. Vanguard Health Systems (NYSE: VHS) recently laid off staff in the Chicago market, citing delayed reimbursements as a cause. Be careful with healthcare companies like this one; they are making acquisitions but profitability could be improved a bit. I believe VHS is a buy, but a cautious one.

By putting nursing staff on reduced hours, or flex hours, management can bridge the gap caused by these reimbursement delays. Working with firms like AMN enables hospitals to manage staffing hours more easily. "The models for the delivery of quality patient care are changing and will influence what nurses do and where they perform their work," explained AMN's Chief Clinical Officer Marcia Faller. No word yet as to what impact Obamacare will have on reimbursement delays, but federal court challenges have already resulted in three injunctions against parts of the plan that impact Catholic and other religious organizations that provide health care or health benefits.



GKoprowski has no positions in the stocks mentioned above. The Motley Fool owns shares of AMN Healthcare Services. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Is this post wrong? Click here. Think you can do better? Join us and write your own!

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