AMN Healthcare Services (AMN) investor relations material

Market overview and demand trends

• Healthcare staffing market normalized post-COVID, with TAM peaking at $70B and now stabilizing near $40B, above pre-COVID levels of ~$30B.

• Demand and pricing for travel nurses and allied health have been stable, with travel nurse demand up year-over-year and allied demand healthy since early 2023.

• Physician staffing saw a slight slowdown but remains positive, with persistent shortages and growing demand for locum tenens and permanent placements.

• Mental health specialties show the most acute shortages, with strong demand for both virtual and in-person services.

• Outpatient and non-acute care, especially in mental health, are key growth areas, supported by recent contract wins and market trends.

Labor supply, cost, and client strategies

• Contract labor cost premium over permanent staff is at a historic low (5-7%), making flexible staffing more attractive for clients.

• Hospitals have maximized cost controls by reducing average hours worked and supervisor ratios, but further flexibility is needed.

• Wage inflation has slowed to 2-3%, but renewed permanent hiring could reignite wage pressures.

• The supply of travel nurses surged during COVID (from 40,000 to 150,000), now settling under 60,000, indicating a larger but normalized market.

• Clients increasingly seek workforce planning tools to optimize the mix of permanent and contingent labor, especially amid reimbursement pressures.

Regulatory and reimbursement environment

• Shifts in Medicaid and exchange markets, along with new regulations, are prompting clients to seek cost-effective staffing solutions.

• Larger health systems are expected to expand as smaller and rural hospitals face reimbursement challenges, increasing demand for efficient staffing.

• Standardization of licensing, especially for virtual mental health, remains a challenge for staffing flexibility.

• Clients are focused on controlling costs and aligning labor capacity with census, with payer mix and regulatory changes as key concerns.

• The move to lower-cost care settings (post-acute, outpatient) is accelerating as reimbursement tightens.