Q3 2023 AMN Healthcare Services Inc Earnings Call
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Okay.
I'd like to hand, the conference over to your first speaker today, Randy Reis Senior director of Investor Relations and strategy.
Please go ahead.
Good afternoon, everyone welcome to <unk> Healthcare's third quarter 2023 earnings call.
A replay of this webcast will be available at IR dot a M in health care Dot com at the conclusion of this call.
Various remarks, we make during this call about future expectations projections trend plans events or circumstances constitute forward looking statements.
Statements reflect the company's current beliefs.
Based upon information currently available to it.
Our actual results may differ materially from those indicated by these forward looking statements.
Various factors and cautionary statements, including those identified in our most recently filed forms 10-K and 10-Q, our earnings release and subsequent filings with the SEC.
The company does not intend to update guidance or any forward looking statements provided today prior to its next earnings release.
This call contains certain non-GAAP financial information.
Information regarding and reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are included in our earnings release and on our financial reports page at IR Dot I am in health care Dot com.
On the call today are Terry Graves, President and Chief Executive Officer, and Jeff <unk>, Chief Financial Officer, I will now turn the call over to Terry.
Thank you Randy and welcome everyone as the health care sector tries to find post pandemic normal for demand.
Health care organizations have made significant progress in hiring permanent workers and this has been felt across the staffing industry.
Lower demand for travelers.
We anticipated a market reset was coming but has been deeper and more sustained than we and the rest of the industry expected.
At the same time, our clients think about building a more sustainable workforce, our broad and deep set of technology enabled talent solution has positioned us well to support clients as they redesign their own workforce snacks and day to day operation.
Third quarter revenue was in line with our expectations.
Consistent with what the market is experiencing third quarter revenue was 14% lower than Q2 and down 25% year over year.
We expect the rate of sequential decline in revenue to be at mid single digit percentage for Q4.
A slower decline in the prior two quarters.
This outlook calls for stable to slightly higher number of nurse and allied travelers on assignment.
Offset by lower bill rate and hours and seasonal declines in other businesses.
While staffing demand varies from client to client.
Clients are asking for help with more than temporary staffing.
First we have reinforced our position as the preferred partner to help healthcare organizations optimize their workforce strategies.
We began the year with a strong push to reestablish more proactive relationships with clients after three years of crisis.
To serve our clients current and future needs and then has established an accelerated cadence of rolling out enhancements and innovations in our technology platform that will continue through the end of this year and beyond.
After focusing on serving our MSP clients in a time of crisis, we are back to serving the broader market with the entirety of our solution set.
We are doing things that will greatly help us and our clients over the long term.
True innovation.
Our connection with clients is accelerating in several ways.
At the front end, we are making it easier to do business with Ams.
This means empowering our client facing team members with greater integration across our 20 solution.
We have strengthened our ability to deliver a multi faceted tech enabled workforce solutions that simplify labor management and provide a variety of options for making the labor force more flexible and cost effective.
Clients will be able to access our full set of solutions there are better integrated sales and service organization.
This effort to simplify our client relationship includes a stepped up branding initiative that aims to drive greater recognition of the breadth and depth of our presence in the marketplace for healthcare workforce solutions.
Recently, we announced that <unk> and Erick Hawkins have been consolidated under the A&M physician solutions brand.
Our team members are gaining empowerment from improved ease of processes.
Faster more responsive team communication and the integration of Ams passport, our industry, leading mobile app into our workforce.
Passport continues its strong growth of registering an average daily users.
This growth is driven by the increasing value we are building into passport for health care professionals.
Our roadmap for passport is to broaden its reach across the spectrum of health care occupation and job site.
We are excited about the power that passport is bringing to health care professionals and see it gaining momentum every day.
Passport is only part of the promising results, we have produced and improving the credentialing process and candidate experience.
Third we have strengthened our portfolio of talent solutions in many ways with our strong commitment to technology enablement of our one <unk> initiative.
We are more digitally connected.
And then already has launched powerful integrations and strong implementation and support capabilities that are central to integrating our solutions into bigger txdot and into total workforce solution.
Over the next few quarters, our transformative efforts will make the value proposition across our solution constantly.
A major milestone in our digital acceleration is to go live this month of shift wide swap.
<unk> generation of our market, leading vendor management system that is trusted by many of the nation's largest health system.
The newly Reengineered platform manages a full range of program management options as well as clinical and non clinical labor sourcing options from agency staffing and independent contractors to float pool and direct hire.
Shift widespread empowers users with intuitive dashboard real time data driven labor market insight.
<unk> supplier support and passport integration for AI powered talent nursing Credentialing and candidate self service.
Shipped why flex is here at the right time as health systems seek faster and more powerful and transparent ways to develop sustainable workforce agility that delivers great outcomes for patients and their caregivers.
And fourth we have continued to generate strong cash flows and put capital to work.
Our capital expenditures this year are on track to reach a record high $100 million.
Focused primarily on innovations that we expect to bring attractive long term returns.
Last week, we announced plans to acquire <unk>, which will bolster our locum tenens growth strategy and presence in attractive physician specialties.
Accelerating our organic locums growth with an acquisition has been a priority for us and the expertise and track record of MF. Dr are strong complement to and growth accelerators for our existing local business.
Our strong balance sheet and cash flows enable us to make acquisitions that improve the value we bring to all stakeholders.
Okay.
Across the <unk> organization, we are excited to have reached the stage of our progression.
I have been honored to lead this extraordinary group of people from identifying needed changes to developing our growth map accelerating our pace of innovation and delivering results while simultaneously managing through a significant post pandemic workforce resets.
We have turned the sales engine backlog for all market segments and have been rewarded with some early traction and win.
We are positioning <unk> to win across all market segments as the market recovers.
We are confident that the long term investment thesis for <unk> is attractive.
The health care workforce faces structural constraints, serving demand growth for care driven by an aging population.
We are convinced that our tech enabled services model will win and Ams is well positioned with valuable clients, who need our depth and breadth of solution.
While the overall market continues to be challenging our pace of positive change is accelerating and <unk> is doing the right things to embrace all levels of our very large market opportunity.
Now I'll turn the call over to Jeff.
We will review our latest financial results and outlook.
Thank you Carrie and good afternoon, everyone.
Third quarter revenue of $853 million was near the high end of our guidance range driven by outperformance in our nursing Allied segment.
Consolidated revenue was down 25% from the third quarter of 2022.
Sequentially revenue was lower by 14%.
Operating environment remained challenging with clients, maintaining lower demand levels, and lower bill rates within nurse, and allied and Vms as well as lower volumes across physician and leadership solutions.
Gross margin for the quarter was 33, 9%.
Slightly exceeding our guidance range.
Compared with the prior year period gross margin was up 10 basis points.
Sequentially gross margin increased 60 basis points, primarily due to the release of a workers' compensation reserves.
Consolidated SG&A expenses were 163 million or 19, 1% of revenue compared with $215 million or 18, 9% of revenue in the prior year period, and $202 million or 24% of revenue in the previous quarter.
Third quarter SG&A expenses were reduced by several favorable items that amounted to a benefit of $5 million.
The decrease in SG&A expenses year over year was primarily due to lower employee expenses stemming from the current demand environment and lower bad debt reserve.
Sequentially lower employee expenses, driven by lower business volumes and a decrease in nonrecurring expenses led to the significant decrease in SG&A expenses.
Adjusted SG&A, which excludes certain nonrecurring expenses and stock based compensation expense was $157 million in the third quarter or 18, 4% of revenue compared with $204 million or 17, 9% of revenue in the prior year period and 100.
$70 million or 17, 1% of revenue in the prior quarter.
The increase in adjusted SG&A as a percentage of revenue both year over year and sequentially was primarily due to lower revenue.
In the third quarter nurse and Allied revenue was $573 million down 31% from a year ago period.
Sequentially segment revenue was down 17% driven by the continued trend of lower volume hours and bill rates.
Average bill rate was down 10% year over year and down 7% sequentially.
Year over year volume was down 19% and average hours worked were down 4%.
Sequentially volume was down 12% and average hours were down 1%.
Travel nurse revenue for the third quarter was $384 million, a decrease of 34% from the prior year period and 20% from the prior quarter.
Allied revenue during the quarter was $168 million down 12% year over year and 8% sequentially.
Nursing Allied gross margin during the third quarter was 27, 5%, which increased 50 basis points from the prior year period, and 80 basis points sequentially.
A benefit of 40 basis points came from the release of a workers' compensation reserve.
Segment operating margin of 14, 5% increased 60 basis points year over year due to higher gross margin and lower bad debt expense, partially offset by lower SG&A leverage.
Sequentially operating margin decreased 40 basis points as the improvement in gross margin was more than offset by lower SG&A leverage.
For our physician and leadership solutions segment third quarter revenue of $160 million was down 9% year over year and sequentially.
The decrease in revenue year over year was primarily due to lower performance within the interim and search while sequentially. The revenue fall was driven by lower volumes across all three businesses in the segment.
Locum Tenens revenue in the quarter was $113 million, a 6% increase from the prior year period.
Sequentially Locums revenue was down 8% driven by lower volume primarily in arm C RNA positions.
Interim leadership revenue of $31 million decreased 35% from the prior year period, and 15% from the prior quarter.
Search revenue of $16 million was down 25% from the prior year and down 10% sequentially.
Interim search revenue were down year over year, mainly due to lower demand as cost management remains a prominent factor for health care systems.
Gross margin for physician and leadership solutions was 33, 4%.
Around 60 basis points year over year, mainly due to an unfavorable revenue mix shift partially offset by improved gross margin within locum tenants.
Sequentially gross margin was down 170 basis points, primarily due to lower gross margin and locum tenens.
Segment operating margin was 13, 5%, which decreased 10 basis points year over year.
Sequentially operating margin decreased 150 basis points, primarily due to lower gross margin.
Technology and workforce solutions revenue for the third quarter was $120 million down 11% year over year and 4% sequentially.
MFS revenue for the quarter was $38 million, a decrease of 37% year over year and 18% sequentially.
Segment gross margin was 65% down from 75, 6% in the prior year period, primarily due to an unfavorable revenue mix shift and lower gross margin and language services.
Sequentially gross margin fell 170 basis points as margin improvement within language services was more than offset by the revenue mix shift.
Segment operating margin in the third quarter was 42, 1% compared with 52, 7% in the prior year and 44, 1% in the prior quarter.
The decrease in operating margin was driven by lower gross margin compared with the prior periods.
Third quarter consolidated adjusted EBITDA was $134 million, a decrease of 27% year over year and 17% sequentially.
Adjusted EBITDA margin of 15, 7% was down 30 basis points year over year, and 60 basis points sequentially.
The favorable items that impacted SG&A expenses in the Workers' comp reserve release increased adjusted EBITDA margin by 90 basis points.
Third quarter, net income was $53 million down 43% year over year and down 13% sequentially.
Third quarter GAAP diluted earnings per share was $1 39 returns.
Adjusted earnings per share for the quarter was $1 97 turns compared to $2 57 in the prior year period and $2 38 turns in the prior quarter.
Days sales outstanding was 61 days eight days higher than the prior quarter and two days higher than the prior year, primarily due to expected billing delays with the implementation of a new back office system in the quarter.
Operating cash flow for the third quarter was 172 million and capital expenditures were $30 million.
As of September 30, we had cash and equivalents of $29 million.
Long term debt of 945 million, including a $95 million draw on our revolving line of credit and a net leverage ratio of one four times to one.
Guidance does not include the pending acquisition of <unk>, which we expect to close later this quarter.
Gross margin is projected to be between $32, three and 32, 8%.
Reported SG&A expenses are projected to be 21 to 21, 5% of revenue.
Operating margin is expected to be five 9% to six 5% and adjusted EBITA margin is expected to be 12, 5% to 13%.
Sequentially adjusted EBITDA margin is expected to be lower due to lower gross margin from a revenue mix shift towards lower margin businesses and less leverage over SG&A with lower revenue.
Additional fourth quarter guidance details can be found in today's earnings release.
Now operator, please open the call for questions.
Thank you at this time, we will conduct a question and answer session.
As a reminder to ask a question you will need to press star one on your telephone and wait for your name to be announced to.
To withdraw your question. Please press star one again.
Please standby, while we compile the Q&A roster.
First question comes from the line of Trevor Romeo of William Blair. Please go ahead.
Hi, good evening, thanks, so much for taking the questions.
First one just on the the.
The travel nurse and Allied business I think we're all just trying to trying to find out where the bottom is for the market.
Thank you talked about fourth quarter, reflecting a tapering of that downtrend I guess as you see it here do you think that Q4 run rate will be the trough.
And are there any data points you can point to that kind of gives you confidence in that stabilization.
Hey, Trevor Thanks for the question and I know, we talked a bit about this in some of the opening comments, let me frame out a bit of what we're seeing from clients in the market and then I'll, let Jeff fill in a little bit with some of the questions about what we see in the in Q4 and potentially going into.
The early part of next year.
We're at a point with clients, where it really is client by client where they are I think there is a number of public company CEO comments over the past week that have supported the tremendous progress.
<unk>.
The health care systems have made in replacing their permanent workforce throughout the course of this year.
We certainly have good partnering with our clients on that.
Got it.
And so if you look at the travel piece, we have clients, who really have progressed to the point that they're now talking about how do I support future volumes and we have clients, who still have some work to do in getting their contingent labor back to more normalized levels.
<unk> speaking, we think that the industry will be back to by the end of this year, what we would consider a more normalized level I think that's reflected in some of the guidance that we gave about traveler volume.
In Q4, and bill rates are slightly different so what I would say is we've seen.
Tremendous progress getting back to what we would consider more normal rates as we exit this year, but we still have some clients who are working on what their overall levels are.
Jeff, Yes, Trevor I would just add when we think about the fourth quarter I would say on balance the winter needs orders played out as we thought they would there was a slight headwind.
From some later start dates and lower bill rates than we had expected and then within the client dynamics. The carrier spoke about I would say that most of our clients. We did see sequential increases in Q4 over Q3 and their utilization, but there were several large clients that were continuing to.
To reduce utilization with the progress they've made on hiring and retention. So as we just look at the.
Pace, where there are pacing relative to those that behaved as we thought they would there could be room for them to improve further.
The first quarter and reduced their utilization, which could lead to nurse and allied being flat to slightly down in Q1 over Q4.
From a bill rate standpoint.
In Q2, and Q3, we saw sequential declines in the bill rate about 7%. The expectation is that bill rates will be down 4% in Q4 over Q3 and that could continue to move.
Low single digits moving into next year downward.
Okay.
Okay. Thank you, Jeff and carry that was that was helpful. And then for my follow up I wanted to touch on the <unk> deal a bit more.
Could you maybe tell us anymore about how that business has grown historically beyond just this year I think it looks like about 50% growth based on your press release.
What kind of growth you'd expect from MTR going forward and maybe how much opportunity you would have for both revenue and cost synergies in that deal.
Yes, let me give you a little bit of.
How we think about MTR, particularly in the context of our broader Ams business I know, we have talked for some time about locum being one of our M&A priorities and so we love the market, we love the growth opportunity that we see both in terms of just.
Our clients very focused on revenue growth, but also just some of the workforce structural changes that you see within the physician space, making more of them interested.
In a local type of role.
For MCR in particular, and I'll, let Jeff talk a little bit about what we've seen in terms of some of the numbers and certainly they've had.
Very strong historical growth.
What's very compelling to us beyond their profile across a number of specialties that we are not as strong in is that we have really we think two significant synergy opportunities. The first one is while they have a consolidated backend platform. They still have some opportunity.
<unk>.
Between there are two organizations for front end synergies.
We're going to be focused on in 2024 and the second part Trevor is if you look at our Locums business today, we're more constrained by supply than demand. So what's very attractive both for <unk> and for Amgen is to be able to put the strengthened there.
Apply particularly around a number of very key specialties into our already existing demand.
Alright, Thank you very much.
Alright. Thank you one moment for our next question.
Next question comes from the line of Kevin Fischbeck of Bank of America. Please go ahead.
Great. Thanks.
I guess clearly the market's going through some some pretty significant changes right now and it's hard to kind of see.
Where share is moving but I guess from career perspective do you feel like you guys are gaining share or losing share.
Over the past couple of quarters into Q4.
Yes, Ken.
About both of these in the past couple of quarters, because they think that these are the two elements that we look at relative to the overall share piece.
So the first one is we talked a lot about the industry had this pent up RFP.
Cycle for clients coming out of three years of crisis management.
A M N phenomenon that was happening across the industry. So if I look at where we are in that RFP cycle for clients worth of tailwind. So we still have a couple of clients with both this quarter and into next quarter.
We would consider kind of the tail end of that.
Bigger Covid RFP cycle.
If you look at our Rfps going into next year. It is a significantly smaller number of clients that would be going into RFP. So that's been the first piece that we've been very focused on particularly coming out of COVID-19 and ensuring that we were aligned and realigned with our clients coming out of really Jenna.
<unk> crisis, the second piece is on sales.
Which is incredibly important around just not just retaining your clients, but growing.
Which was quite significant 300%, if we looked at kind of year.
Year over year.
This quarter, we have seen our pipeline continue to expand that expansion is across MSP Vms.
And all of our other solution.
At the same time that we have been continuing to build our sales pipeline. We have seen the pipeline progress. So if I look at the indicators of where our share position is going they are positive.
Okay.
I guess those two statements talk a little bit and congrats to me, if youre, saying youre largely through the RFP, but your sales pipeline is high so what's the difference in the sales pipeline in the RFP.
And then Karl versus the industry comment or yes, I'm sorry, Kevin. So if we look at growth. One is are you are you keeping all of your clients through the post Covid RFP cycle thing. One thing too is are you continuing to grow on top of that.
So we are we are doing both simultaneously how are we ensuring that as we get through this RFP cycle have a solid base with clients and then how do we continue to grow off of that both with new clients and names as well as expanding existing client relationships.
Okay.
And then just.
Increasingly ask for or what you're seeing.
Hey shift back to MSP or are we still looking at Vms or partial solutions what are we looking at in the.
New sales cycle.
We're seeing both so we are seeing a healthy increase in our MSP pipeline. We are also seeing a healthy increase in our Vms pipeline.
Two to three quarters, and our sales pipeline, it's coming from both MSP and Vms solution.
Would you say thats, how does that compare to your current business mix as it works to one versus the other.
It's a good question I don't know that there's a bias one way or the other I think that we have become more client centric and how we approach.
No.
A new client and so we probably had a slightly biased towards MSP in the past.
And if you look at our approach now we really look at it and say we want to participate fully in all of those market.
So as clients embraced MSP models, we want to be their first choice as clients embraced vendor neutral or other types of hybrid models. We also want to be their first choice.
Okay, great. Thanks.
Thank you one moment for our next question.
Next question comes from the line of Tobey Sommer of <unk> Securities. Please go ahead.
Hey, good afternoon. This is jasper bibb on for Tobey.
Just curious what youre seeing from bill pay spread perspective.
Do you see spreads continuing to narrow into the first quarter of 2004.
Or are you starting to see that spread compression stabilize a bit on some of your newer orders. Thanks.
Yes, Josh this is Jeff I would say.
If you exclude.
The worker's comp benefit that we received in the third quarter.
Midpoint.
Our gross margin guidance is down about 100 basis points sequentially in Q4 over Q3.
That's pretty equally driven I would say by a change in business mix shifting to lower margin businesses across certainly pls and gws, but we are seeing compression.
In the bill pay spread just given the lower demand environment on nursing Allied and Thats. The driver of the Q4 over Q3 change.
As we move into next year and certainly the early part of the first two quarters of next year.
Wouldn't anticipate that to change from our bill pay spread dynamic standpoint.
Okay got it.
Yes, apologies if I missed this but was there any strike planning or labor disruption were contemplated in the <unk> revenue guide.
Theres been some union action that global clients for the past couple of months, but not sure. If that's translated to anything from a revenue perspective.
Yes, there was about $2 million of labor disruption revenue embedded in the Q4 guide and that number was right around $1 million and our Q3, actuals and little less than that so pretty immaterial in both periods.
Okay, great. Thanks for taking my questions.
Thank you one moment for our next question.
Your next question comes from the line of Brian kind of Aquila of Jefferies. Please go ahead.
Hey, good afternoon.
Carrie I'll just follow up to Kevin's questions earlier.
Think about cover we cover the hospitals right and they are all still saying that they are still trying to reduce their use and spend on contract labor and I know in your prepared remarks, you talked about.
Like a flattening or with the stabilization of broader demand. So how should we be thinking about that.
What gives you the confidence that you're not losing share in this environment.
No I guess, what we have anecdotally heard from others is that.
What we've been experiencing is similar to what others are experiencing our industry. Obviously, we work very closely with a number of suppliers.
Broadly across a number of different clinical role.
And so as we work with our clients around how they think about rebuilding a sustainable workforce.
To your point, Brian There was a significant focus.
Around how do you bring down contingent labor both in terms of the size, but also if you looked at the marginal cost of that labor relative to permanent hires there.
There was a historically high difference between that so the focus I think with both on numbers, but it was also because you were at a point where you had to.
Dislocation in terms of the marginal cost.
If you look at what has happened subsequently you've seen the marginal costs, partially because the marginal cost of the.
Permanent hire has gone up the labor inflation, but also the cost of contingent labor has gone down.
Debt as system to look at how they're going to really manage and be able to staff a cost effective full mix. It has become much more cost effective for them to bring in contingent labor for the flat now is that true for every client no. There are some clients that are still.
We'll at relatively high contingent labor costs, there are other clients and some have been public about this even more recently, who they're at a point, where they look at it and say hey, I need to actually build back volume and I can do this in a more cost effective way. So there is not a one size fits all answer.
For our clients, we have clients who are in different places we have seen to Jeff's earlier comment.
A number of our clients start to actually go back up but we still have some very large clients who have targets that they would want to bring it down.
A little bit from where they are now.
Okay that makes sense, maybe Jeff as I think about your fourth quarter guidance range so midpoint.
The midpoint of $800 million of revenue you gave the EBITDA margin there so yes.
Just a little over $100 million of EBITDA for Q4.
Is that the right jumping off point to use when you annualize that and then put a growth rate on top of that and then what are the other moving parts that we need to be thinking about as we think about 'twenty four I know you called out.
Yes.
What are you all discretionary bonuses that were not in the back half.
2023, so just trying to get any help that you can share with us as we try to model 'twenty four.
Yes, Brian.
I'll, let Scott come.
A lot of tailwind and headwinds off of that Q4 exit rate. So.
Certainly on the tailwind side, we would expect continued growth in language services moving into next year that business was up 20% year over year in Q3.
We'll obviously have the tailwind in LOE comes from <unk> acquisition, which we spoke about earlier and then yes, we saw the opportunity to capitalize on a pretty large sales pipeline I would say.
Just given ramp and other things any new client wins would probably impact the second half of 'twenty four much more so than the first half and then we still do have the opportunity to improve our internal capture.
Within nurse and Allied were still a couple of hundred basis points below pre pandemic norms.
On that side from a headwind standpoint, we've talked about where certain clients are and that there could be further reductions in Q1.
Over Q4 levels, and then within nurse and Allied we will have an impact on our international nurse business next year from the start retro aggression.
That level again disproportionately impact the back half of next year, but that will start to be impacted in Q1, and Q2, we would anticipate that business to be down about $70 million on the top line year over year next year.
And that will also post a 30 to 40 basis point headwind to nurse and Allied gross margins just from a mix standpoint.
And then additionally, just given the performance. This year, we do have very low levels of incentive comp in the Q4 run rate.
And that'll be about $5 million to $6 million of additional SG&A moving into next year per quarter.
Not in Q4.
Jeff if I add all of that I mean are you still expecting growth in <unk> next year.
Yes, I mean, I think we're just I mean with the MST our acquisition alone.
Yes, there would be growth, but off of the Q4 run rate in nurse and Allied.
Again, if it's flattish to slightly down in Q1 than we would expect Q2 and Q3 to be seasonally lower Opex Q1 base next year.
Okay got it thank you.
Alright. Thank you one moment for our next question.
Next question comes from the line of Jeff Solar of BMO.
BMO capital markets. Please go ahead.
Hey, Thank you Ryan on for Jeff just looking at some of the industry data.
<unk> pass rates up this year some of the visa stuff you just mentioned and then the burn out how do you kind of triangulate those different factors for the outlook on supply going into next year.
Yeah.
A couple of things on supply if we.
Split out nurse and allied with locum.
So if we look at nurse and Allied supplies. So we look at just applications that we get we are up significantly from pre COVID-19 levels. So depending on kind of what area think 30% to 50%.
Above.
So we still see very healthy supply.
Part of the burn out challenge it actually these types of roles become attractive to clinicians, who still want to stay and participate in patient care, but want more control over how they do that.
From a local standpoint.
We have we've had strong.
Demand you can take that year over year, you can take it since pre COVID-19 and so.
We are looking for more supply and I would say that's true of the entire industry. So as much as we've talked about the nursing shortage and the nursing burnout.
The physician numbers are actually marginally worse.
And so that supply we think is going to be.
One that MSC RF and analog supply for us in that space.
But it is something that we think is going to.
Make the local business attractive, particularly as we can keep more physicians in maybe in enroll is that they can have more control over.
Got it and then just on the physician bill rates.
You put out a report recently about higher salaries for doctors would you expect the trajectory of the bill rate increase over the next.
A couple of years or so to mirror, what we saw in nurse or it would be a little bit more gradual the way up and down.
We would expect if we just look at our RDF trends and low comes this year that that would probably moderate going into 2024 than where we were at this year in terms of year over year increases.
Okay. Thank you for your question.
As a reminder to ask a question you will need to press star one on your telephone and wait for your name to be announced.
One moment for our next question.
Next question comes from the line of Andre Childress of Baird. Please go ahead.
Okay I see.
Andre online if you could make sure youre on mute.
Maybe it will come back to Andre.
Okay. Andre if you could rejoin using the call me feature we may be able to address your question.
Seeing no questions.
Additional questions at this time.
Go ahead.
And the call back over to Cary Grace President Chief Executive Officer. Please go ahead.
So thank you on behalf of our entire almond team to have the privilege of working with our clients and clinicians everyday to positively impact healthcare. We thank all of you for your interest in Ams.
Alright. Thank you for your participation in today's conference. This does conclude the program you may now disconnect.
Okay.
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