Cross Country Healthcare (CCRN) Jefferies Global Healthcare Conference summary

Market trends and demand normalization

• Demand for temp staffing declined through 2023 and early 2024 but has now stabilized, though not yet at pre-pandemic or normal levels.

• Structural disconnect persists: open orders are below pre-pandemic levels, but clinician assignments remain high.

• No significant rise in cancellations or fall in renewal rates; market may rebound in the second half of 2024.

• Hospitals are reducing contingent labor despite high utilization, exploring virtual nursing and internal travel pools.

• Internal travel pools have seen some success but face challenges in maintaining clinician pipelines without national reach.

Shifts in staffing models and technology

• Industry is moving toward a blend of managed service programs (MSPs) and vendor-neutral agreements, with clients seeking both technology and service level agreements.

• Launch of proprietary vendor management system (Intellify) in early 2023 enables participation in vendor-neutral opportunities.

• Recent wins with sizable clients and a robust pipeline signal growth potential in spend under management.

• Competitive advantage comes from brand reputation, recruiter relationships, breadth of opportunities, and technology platforms for both candidates and clients.

Financial dynamics and margin trends

• Margins are similar between MSP and vendor-neutral models when managing own clients, but vendor-neutral offerings can have higher profit margins due to sub-vendor fees.

• Vendor-neutral programs often cover larger portions of client systems, increasing spend under management.

• Bill rates have stabilized at a normalized level, with little downward pressure and some signs of improvement in open order rates.

• Pay rates for travelers have declined faster than bill rates, improving margins, but housing and incidentals subsidies remain elevated.

• Bill rates are up 20%-25% compared to pre-pandemic, and there is no current difficulty in filling assignments.