AMN Healthcare Services, Inc. (AMN) Earnings Call Transcript & Summary

Hi, everyone. I'm A.J. Rice, the health care services analyst at Credit Suisse. Thanks for participating in our conference, and we're very pleased to have next up in here, AMN Healthcare Services. Representing AMN, we have Susan Salka, the President and Chief Executive Officer of the company. We have Jeff Knudson, a relatively new addition to the team, but he is the Chief Financial Officer, and we have Santhi Gullapalli, sorry, Vice President of Finance; and then Randy Reece, who is the Senior Director of Investor Relations and Strategy. I really appreciate you guys participating once again in our conference this year. I've given many of the companies just have a chance to sort of level set coming out of the third quarter since that was recently reported some of the key takeaways and sort of how you look forward. And maybe, Susan, if you don't mind, I'll give you a few minutes to do that, and then we'll into some broader questions.

Sounds great, A.J., and thank you and the entire Credit Suisse team for having us here. I know we've been with you many, many times. And not only do we always find it highly productive to take part in your conferences, really appreciate the outstanding coverage you provide for our space and our company over the many, many years. You've seen it almost as much as I have. So really appreciate your support. So getting back to our earnings call, which was on November 4, we reported at the time, record results for the third quarter, outperforming our expectations for the third quarter really on all counts and providing some even stronger guidance going into the fourth quarter. Underlying drivers for all of our businesses is the very strong demand environment that we're seeing across all of health care. Yes, for clinicians, but also for leaders and for language interpretation services as well as our technology and technology-enabled workforce solutions. I know a lot of focus right now is on the nursing business, as it should be. It's our largest business and certainly very important in the world of health care and very important to us. But on the call, we provided a little bit of insight into how we expect to go into next year. We have extremely high demand, as I said, record levels of demand in nursing in particular. In fact, it's about 4x what we would consider to be a normal demand level. And of course, the pay rates have increased, which have also driven higher bill rates. We expect volumes to continue to stay strong and growing into next year, really across all of our businesses. But in nursing and a little bit of Allied, we will hit a headwind next year with the bill rates coming down as the demand comes down a bit and pay rates declined. It's hard to say exactly what that trajectory will look like. I'm sure you could ask me about that, A.J., because that's what I think a lot of investors are looking at. But we gave a little bit of insight into our thinking, which is that we would expect volume increases across really all of our businesses. And really, most of our business is a very positive pricing environment as well with the exception of nursing and a little bit of Allied where we hope that these very, very high crisis rates will come down and that we would potentially exit next year, something that looks more like 20% to 30% bill rates above pre-pandemic levels. We do think that the industry, because of the shortage has seen a step change and that there will be some new norm. It's just difficult to say how long it will take to get to that norm. It could be the end of next year. It could quite honestly, go into 2023. So I'll just start off there, A.J., and turn it back to you.

That's great. That's great. I think one of the things that people have struggled with as we've gone through the quarter and heard the commentary from a variety of providers about what they're seeing. They're all touching different pieces of the issue here around labor. They're all having labor challenges. But some are describing a situation like nurses out on quarantine with the COVID surge that might be viewed as relatively short term. Others are talking about more systemic issues of nurses facing burnout, taking early retirements, starting families, wanting to maybe do something else. You guys have probably the best view on it of anyone, given your counseling all those different types of providers. Can you give us a little perspective on how you sort of assess the near-term aspects and the longer-term challenges as well?

Yes, A.J. Well, our view would be with the latter comments that the biggest driver of the strong demand and [indiscernible] lasting strong demand is the underlying shortage of clinicians driven by more retirements, more clinicians taking a different career path. If they stay within health care, maybe they're moving away from the acute care setting and into another place, but some are actually leaving health care altogether. There are a certain number maybe sitting on the sidelines waiting to see what happens. They're burned out. They need time off. But attrition continues to be very, very high. This is not a story of people leaving at the beginning of the year. Attrition continues to be at extremely strong levels. If you look at the last BLS data you have [ 2.3 ] job openings for every job that is filled. So the underlying shortage, we believe, is not only the current, but will continue to be a strong driver. A few things have certainly added fuel to that very strong demand environment. Vaccine mandates have been a little bit of a factor in a small amount, we think, of increased demand, although quite honestly, for us, it's also been a headwind in that we've had some of our own clinicians that were prepared to go on assignment and couldn't actually follow through and start because of vaccine mandates. We mentioned on our earnings call that -- we had 150 people in the third quarter that we were unable to start because of vaccine mandates. So we think probably for us, the 2 somewhat balanced each other out. But as we talk with our clients, we don't hear nurses sitting on the sidelines due to quarantine or vaccine mandates being the strongest driver of their demand. It's just the underlying imbalance of the need for clinicians and the supply.

Right. And there is a lot of debate about that vaccine mandate question. And 1 thing that struck me as I've talked to you, you all and others is people know that's coming. And so some people are reacting to it today. So do you still think we have a lot of impact on that to come? Or do you think, basically, a lot of that has played out already?

I think most of it has played out. There will be more to come as the federal mandates flow through to perhaps areas that hadn't previously been hit. To date, what we've seen is more the facility or system mandates, the state mandates, things like that. And as the federal mandates are taking hold, I think we'll see a bit more. But as I said, it's not the primary driver that we're seeing. Now how long will some of those nurses sit out? Again, small fraction, we think of the overall shortage, but some portion will come back over time. I hope they do. We need them to come back into the profession. But if you read some of the surveys and reports over the last 18 months, it's believed we've lost anywhere from 20% to 30% of the nursing profession that is taken a different track, whether against retirement, other jobs and other industries or even within health care. So even if we could get back to something like, oh, we've only lost 10% because some come back. That would still be a very dire situation. And it actually makes our other businesses even more important in our partnerships as well. Yes, our clients will continue to need access to clinicians in that very short environment, but by being able to help them with their permanent hiring through RPO, which we're of course doing now, but I think will be increasingly important. Our international staffing where we bring nurses from abroad into the U.S. on green cards, and they go on 2-year assignments. We have huge demand for international nurses right now. We just can't fill it all. And that speaks to our clients belief that this underlying shortage is not going to be resolved in the next 6 months when yes, if few nurses come back from the vaccine mandate settling out, but they believe the shortage is going to be very long last.

Okay. Okay. And you mentioned the preliminary thoughts about '22 that you gave on the call. I guess if we look at what you're thinking, if I have it right, maybe my math is wrong, but I think you're looking at rates being down by the end of '22, about 30% to 35% off of the peak. And I think if that works out to something like an average rate of about $75 versus something in the 90-plus range that you're seeing at the height of the pandemic. Can you -- I always get that question, why would it be higher than pre-pandemic? That's because you think some of this stuff is an acceleration of what was already a tight trend, I assume. But but talk to a little bit about why it doesn't go all the way back down to pre-pandemic levels?

Sure. And I'll first point out that the rate headwind that you're discussing is really primarily in nursing. There's a couple of specialties in Allied and then, of course, it does affect our VMS business, where we're taking a percentage of gross billings. But I just want to make sure folks know that in our other businesses, we expect that pricing will continue to grow. And your math is pretty darn close in the 30% to 35% decline and could be the end of next year, it could trickle into 2023. Why doesn't it go back to pre-pandemic levels? Wage inflation is 1 factor. We're already seeing significant wage inflation across health care. Randy, of course, can always speak far better to that than me. So maybe at the end, if we have a moment, he can talk about some of the statistics that support that. But even just anecdotally, we are hearing from clients about wage increases in the 8%, 10%, 12% range. And that's not even making a difference. It's what they need to do to even try to retain and compete, but they're adding in premiums on top of that. So we would expect wage inflation continue to be very strong, probably above mid-single digits. Remember previously, we talked about it being 2%, 3%, 4%. I think those days are gone, at least for the foreseeable future. And then also that underlying imbalance between the the demand for clinicians as we're getting older, along with that very short supply. The other factor I'll just throw in there, and it's going to affect the staffing paradigm of so many health care organizations is affecting our organization as well, and that's the preference of the younger workers. There's absolutely amongst the millennials, and even, of course, the new Gen Zers is a preference for more flexible work. And I actually think the pandemic illuminated that opportunity for them and showed them that it was actually possible to work 3 months and then take a month off and then work another 3 months and areas don't have to -- areas can come down and they'll still have that opportunity and can still have the kind of career lifestyle that they want. And so I think many organizations are kind of waking up to the fact that worker preferences are going to mandate that they have a different mix of core staff and flexible staff.

Right. And that was something I wanted to ask you about. So traditionally, if you think about the workforce at the average hospital, what would you say, 90% is people that work at that hospital all the time, maybe even a little higher? And the temporary per diem local guys versus the travel when you think about that mix, you're sort of at the very marginal top of that, maybe 3% or 4% of the workforce. Has that permanently jumped you think, in your mind? So now it's 5%, 7% of the workforce. What are your thoughts on that?

So you're roughly right about the sort of the 90-10, sometimes it could be 85-15. It depends on whether you bring per diem and float pool and other things into that. But yes, we do believe, and more importantly, our clients are telling us that they think that, that mix is permanently changed. Now they're not quite ready to say what it's going to be in sort of after life, but because right now, they just need want a nurse from anywhere. So there's somewhat indifference about whether it comes from perm or travel or per diem. But going forward, I've certainly had clients share that they think that staffing paradigm and mix has changed, partly because of the shortage and partially because of worker preferences. I mentioned the millennials is interesting. The millennial and Gen Zers are our fastest-growing population amongst our new starts in travelers. Of course, it's always been skewed a little bit to the younger professional. We have had growth across all age categories, by the way, but the fastest-growing by far has been that younger worker. And that's really important because once they get introduced to this flexible work style, it shows them that they have more alternatives than they might have previously thought.

Yes. And 1 other thing I think is important when we talk about what may happen to bill rates over the next year, in a lot of provider segments of the government cuts reimbursement, that just falls straight through to the bottom line. You're dealing with a bill pay spread. So the amount you pay is going to come down with that premium rates, so you don't just take it all off the top. Can you comment on -- it sounds like in some cases, you sort of helped the hospitals by taking a little bit of pressure on your bill pay spread maybe that goes back to a normal. How do you think that dynamic plays out as bill rates adjust back to more longer-term trajectory?

Yes. So we have had compression in our bill pay spread on the margin over the last 18 months because as the pay rates go up and the bill rates go up, we pass along a greater portion of that incremental bill rate in the form of compensation, primarily pay rates to the clinician. We should. That's why the rates are going up so that we can pay more and we can attract people. And so as the bill rates come down, we would expect that we will be -- that we reduce the corresponding pay rate. And I mean this has been our industry for years. There's a pretty tight correlation between the pay rate and the bill rate. And so as they go up, we -- you see our margins like might compress a little bit, and that's by design so that we can recruit more people. But then likewise, as they come down, we kind of go back to a normal margin. Now we're making less dollars, which is why it flows through to our bottom line, and we're saying, look, we're not going to be at 16% EBITDA margins, we would expect our EBITDA margins to come down, but actual kind of underlying gross margin should actually expand a little bit back to the pre-pandemic levels.

Okay. One of the other interesting phenomenon has been the growth of MSPs, managed services provider programs. Talk about the dynamics of that in this tight supply environment, do you end up having to favor those MSP accounts, I'm assuming you would. Do you see fill rates moderate a little bit on those so that, that could also be something if we see some pressure on seated demand lessen a little bit on your forecasting that. But if you did. And then the other dynamics do you think it's pushing people that have been reluctant or health systems that have been reluctant to join an MSP or to do an MSP to maybe say, "Hey, I need to do that to meet some of the staffing, sort of a broad question on MSPs.

Yes. Lots of great questions in there. So first, we absolutely have seen the demand for MSPs go up over the last 18 months from kind of the reasons you've described that they didn't have something in place. Perhaps they have a smaller partner who couldn't deliver, they realize that they really needed a more robust either staffing-led MSP who had a stronger recruitment team behind them or a stronger affiliate network or they needed a stronger technology platform. We just happen to have both options for clients. So in this market, we had to be very choosy about which new staffing-led MSPs that we have added to our portfolio because, of course, we don't want to detract too much from our existing MSP clients, which is where our primary focus is. And so we have an opportunity to put them on our open talent marketplace or our VMS platform, which gives them a great vendor-neutral tool that they can use to get their orders out to hundreds of firms across the industry, including us, but also many, many of the other players within the industry. And so we've seen tremendous growth in the number of new clients and the demand that's on our technology platforms in that vendor-neutral environment. So while we'll see that bill rate headwind, we'll have the benefit of having these new clients and the traction. Now back to your question on fill rates, everybody's fill rates are pressured. Our fill rates are pressured even with our largest MSP clients who were very strategic with. It's just the demand is more than the industry can possibly fill. And that's why we are laser-focused on our MSP clients. We deep prioritize other orders. So if you think about our orders, we have our strategic MSP clients, then we have our direct clients, we maybe we don't have an exclusive, but we have a very strong relationship, and then we have our third parties, where we are working through another MSP. So we've deemphasized the third-party demand that we have and to some degree, even deemphasize some of those direct orders and have focused our supply and our recruitment team on those MSP strategic relationships. We also, of course, have the largest affiliate vendor network and we're relying heavily on them as well to try to get those fill rates to a better place for our clients. So in this environment, everybody is feeling that pressure. But when demand comes down, the number of orders come down, it will still be higher, I think, than it was pre-pandemic. But it will come down off of these extremely high points that can't be filled. And when it does come down, we will have the opportunity to directly fill more of them ourselves. I actually think we're a long way away from that because I do think while demand will come down, it will still be at such high levels that our affiliate vendor network will still be needed to help fill a lot of those jobs.

Okay. Okay. And another topic of discussion, and it's probably been challenged to expand too much here. But traditionally, we think of Nurse and Allied Staffing is mainly a hospital-focused business health system, but there's all these other areas that are emerging clients for our ambulatory surgery centers, home health, schools, clinical labs and [indiscernible]. How -- I know you talked some about each one of those. Are any of those meaningful in the percentage of your total business yet? Or there's still to come? I know hospitals are such a huge part of the system. They may always just dominate. But I'm trying to understand how significant these other areas are and as the pandemic sort of made it hard to continue to penetrate because you're struggling to get the current customer satisfied. So where are we at in capturing those other opportunities?

You're right that the acute care setting probably now more than ever is really dominating the demand, but we continue to add more clients in the home health space. In fact, we just signed a really nice MSP with a large home health provider, even signed with a global cruise line, which is not going to be a primary market for us, but it just shows how the need has branched out into so many areas. And you know, A.J., we've been doing this a long time in terms of planting seeds into these other settings. But I wouldn't say they're material enough now or probably ever will be that they dominate, they take over and we flip over from acute care into these other settings. But we want to make sure we are there in lockstep. And many times, with our acute care clients, if we have a large system, they're often needing us to help staff in clinics and home health and ambulatory surgery centers. So we need to make sure that even in these very vertically integrated systems that we can bring all of those services. But Allied is probably the space for Allied Staffing is probably the space where we have the greatest nonacute demand and really always have starting to see the therapy demand come back. Well, actually have been seen it all year and really robust therapy demand, which is great because in the early days, that was really our only discipline. Now of course, we have imaging respiratory, lab, medical assistance, of course, the schools business, et cetera. But our Allied business is far more diversified today. So there a die down a bit, as you know. And as it's come back, that actually just gives that team that much more opportunity to grow at a fast clip, which they've been doing.

I think there is a perception because the results have been so strong that all of your businesses are doing really well, but there were some segments like therapy that got hit in the pandemic. It sounds like some of those. I don't think anesthesia in the Locum Tenens business was another one, hospitalists and even some of your vendor management services slowed down. Can you just comment on some of those businesses that didn't do as well in the early part of the pandemic and how they've come back and how much maybe more is in front of you on that?

Sure. Physician and Leadership Solutions is a good example of that. The Locums, which is a temporary placement of physicians got hit hard in the first couple of quarters that the pandemic were down as much as 35% year-over-year very quickly, but it's rebounded much faster than we expected. Early in the pandemic, we were helping with some max vaccination centers as well as some state centers, but a lot of that very COVID-specific project work is getting behind us. And really now it's driven more by the core business, the underlying demand. I mentioned that demand across our Locums business is almost 1.5 pre-pandemic levels. So that's a really good news story as we go into 2022. Some of the areas like CRNA, anesthesia, we're doing more telehealth within our physician business, surgery, radiology, across the board. Radiology is an interesting one. That's been more up and down. It's actually not recovered as fast as some of the other specialties. So we've got, I think, a lot more runway in some of those areas. Leadership business, our interim leaders, where we place an interim leader, ranging from a ops manager to a CEO has very strong demand, a bit stronger at the lower levels, nurse managers, directors of the OR, et cetera, which has created a little bit of pricing headwinds because of mix, a little bit true in Locums where the CRNA margins are a little bit lower, but the volumes are very strong and the outlook is very positive across those businesses. And then in our technology businesses, we acquired the Stratus Remote Video interpretation business at the beginning of 2020, right before the pandemic. It's been a huge home run for us more like a grand slam it been performing exceptionally well. It did get hit a little bit that first quarter of the pandemic and then came back strong and has continued on a very good double-digit growth trajectory and very good growth prospects going forward as we continue to see greater adoption and need because of English not necessarily being the primary language spoken at home. You think about language interpretation. It's so exciting one, because we help patients often their most vulnerable state and time, not just the patient, but their family, but it can be extended into so many areas into the home, where if you imagine, if you go into the home, language interpretation becomes perhaps even more important than even in a patient care kind of clinical settings. We've also been able to start to integrate it into other telehealth platforms. So if you dial into a telehealth platform and you need an interpreter is not in the best interest of that telehealth company to invest in thousands of interpreters like we do. And so it's a great way for them to just sort of pay as they go. So those businesses have performed very well, but even probably more importantly, we think, have a great road ahead. In our technology businesses, remember, we've got predictive analytics and scheduling, which is very strong. I'd argue more important than ever. our RPO business, which helps with permanent placement. That hit very, very hard that became the pandemic. And now permanent hiring is the #1 priority for our clients. And so we see more demand than we can possibly fill and even take on there. So it's really across the board. It's not been often in my 30-plus years with this industry and organization that I can say that really all of our businesses are performing extremely well, executing extremely well and have great growth prospects going forward.

Interesting. On the -- I hadn't heard you talk about Stratus getting involved in the home before that makes a lot of sense. Do you do a contract with a telehealth provider so that they have the option to call on you or how does that actually happen in practice?

Yes. So we would have a contract with the telehealth provider, and we would integrate into their software. We have many, many integrations into software used by our clients by EMR systems, by telehealth providers. We've even integrated into our own school teletherapy platform. Remember, where we're delivering speech therapy remotely. Imagine some of the students and the their parents need that interpretation. So we have interoperability and interface with them. And then if you go to the screen, there would be a button that says, do you need an interpreter? Yes. And either the provider or the patient can make that choice. And then they're paying by the minute, like just like our acute care clients do. Now we also remember, acquired Synzi earlier this year, which is a home health and clinic telehealth platform. So it can bring a care team into the home and can be used by a home health agency or could use by -- or acute clients that want to interface with patients in the home. And of course, we're integrating our Stratus platform in Synzi, so that language interpretation piece is there. But it's why he acquired Synzi, so that we would have this ability to serve a virtual care experience for our clients, but also maybe even combine the people element with the technology part. Now they can just use the technology and use their own people or we could provide a care team.

Right. Interesting. You're finding areas where we wouldn't think of to go into and those are always interesting. One area, when I sit back and look at the totality of temporary health care staffing that you haven't pursued, which is a big area is the branch or per diem, you have some presence there. But relative to that subsector, that's probably bigger than travel nursing based on everything I've seen statistically. What has been the company's thinking? And is the way this has played out, make you think differently about whether to be more involved in that space?

We will be more involved in that part of our business continues to grow. It is very important for our clients, I'd say, particularly our large MSP clients where they want a partner who can provide travel nursing, for diem, Allied, perhaps Locums and the multiple services that we can bring to the table. So we will, I think, always be in the per diem business is a very important part of how we ensure staffing is at appropriate level. So -- why don't we go into it in a bigger way, it is a very locally driven business historically had been driven by having branch offices. A few years ago, we closed our branch offices and went to a centralized model and went more digital. And thank goodness, we made that move. It was for us about driving efficiency in the digital experience for our clinicians and speed and, of course, trying to make that business a bit more profitable on the bottom line, which is hard to do in per diem, but it worked out fabulously during the pandemic because -- of course, the demand has been enormous, and we've had that digital presence and capability, and it's really more of a hub model. We've got 2 primary locations. Of course, everyone is pretty much working home now, which made it even better that we have gone digital and gone to this model previously. So that will be our growth strategy with that business is to continue to do it out of a more centralized operation as opposed to going back to any sort of branch office where you're showing up with and trying to maintain that presence. We found it to be very successful. I guess I probably won't go into it in a bigger way that makes it a more overweighted part of our business. We find that we excel probably the most at the kind of travel type of assignments and the longer-term assignments.

Yes. Those are clearly the more value-added aspects of the business. It's just a lot of dollars out there is when raise that. One of the things that came up on the call and certainly gets discussed every once in a while, but it sounds like you're thinking it might get discussed quite a bit, is the labor disruption aspect and the fact that that's a component of your business. Talk a little bit about what you're seeing out there. It does seem to us following the hospital industry that we're going to have more strike activity rather than less in the next few years. What are you seeing? And maybe how do you participate in that when it occurs?

That's exactly what we're seeing, not just now, but as we look out over the next couple of years, A.J., the number of contracts that are coming up for renewal and the expectation that they will likely go to strike and not settle has certainly increased. You're seeing it today with some strikes that we through their hand to participate in, but some that we have, we had a strike in the third quarter. We mentioned we had fees in the fourth quarter. And as we look at that pipeline going forward, we'll expect that to continue. And it's not surprising in this environment where the -- not just the unions, but the nurses, are feeling very frustrated and burned out and empowered, and they see this as their opportunity to really make a step change in some of the areas where maybe they haven't made as much progress as before. Wages, benefits, staffing ratios so that they don't have to take on more patients than they expect. So we are one of the leading providers of labor disruption management services. So we'll be busy with that. We are busy now and we'll continue to be busy. I realize for our investors, it creates a little bit of lumpiness in our results. And it's just something we need to do. It's strategically important for our clients, when we do have unexpected revenue due to a strike actually going into play then we'll have to explain it in future quarters. But we see it as a differentiator for us in being able to say to our MSP clients. Look, we're here for you in a holistic way. We provide short-term staffing. We provide long-term staffing. We provide permanent placement. We provide technology solutions that help you optimize and if you're in that challenging situation of a labor disruption we're here to help you as well.

Right. And I think it is sort of an interesting business to think about giving everything else you do. Because on the one hand, the nurses want to feel like you're on their side. So as you provide workers to do the strike, you might -- that might create some questions there. But alternatively, your real ultimate customer is the health system and they need somebody to help them. And is that the right way to think about it, I guess?

It might be surprised. The nurses on to work at a strike care very much about their nursing colleagues. That might be on strike. And they also care very much about the patients and the communities. So they see it as really almost an obligation and an opportunity to support a profession, but not necessarily be the ones that are in that strike situation, right? And so it's -- there's a loyalty factor there that actually caused them to come, not stay away necessarily. It may not be everybody, but in the minds of many clinicians, they see that they're coming to support their profession and certainly ultimately the patients.

Yes. No, and we talked about premium rates in other areas, you do get paid a fairly substantial premium rate when you provide people to come into in support health system in a strike situation.

Well, it's because of the pay rate. The pay rate drives our bill rates and our fees, right? If you're going to ask a nurse to be at the ready and come in with very short notice and get their credentials done and maybe drop what they're doing or maybe they've even sat on the sidelines waiting for the strike to happen, you need to be willing to pay them more than the average in order to ensure that they're actually going to follow through. So the pay rates that drives the bill rates. And then of course, our team has go into action. We have to hire. We hired hundreds of people to support strike situations that might occur and they might not occur. So when there's fees related to preparing for potential labor disruption, there are underlying expenses, too. And so it's not just of falling to the bottom line.

Right, right, of course. And as you said, that's been called out in the last few years because you might have 1 quarter in a year where it's meaningful. If we enter an environment, it will be interesting to see how people react. If it's every quarter because there's so much strike activity, which is a possibility, it seems like to me that every quarter, you're putting up some level of this activity. So I guess whether it could become more of a recurring thing, at least for the next 3 or 4 years. I have to ask you because the people that are following it closely are aware of the situation out of California, where one of your frankly largest health system that you work with is press talking about the potential strike there. And I've seen estimates of maybe 32,000 workers could go out on strike, which would be way off the charts needless to say, versus anything we've ever seen. Any update on that situation that you can share? And where does that stand at this point?

Well, first, we can't comment on any particular labor disruption that we might be involved with. So I apologize for that. The client that you're referring to is a fabulous strategic partner. And yes, we do provide labor disruption services to them. I will say the media numbers you're seeing around 32,000 are all inclusive of all kinds of health care workers. If we were supporting them, then nursing would be a smaller portion of that. So that's kind of how I have to share with you on that.

No problem. I do want to take a second here as we wind down and talk about capital structure, capital priorities. You guys have been active in acquisitions and you seem to be able to find ones that are accretive pretty nicely right out of the box, which is always helpful. But -- can you talk about the landscape for deals that you're seeing now coming out of the pandemic? Has that created a bigger pipeline? Or -- and also probably should comment on the company's financial wherewithal at this point.

Yes. So starting with the balance sheet and our financial position, as you know, exceptionally strong due to our strong performance, but also I have to give great credit to our finance accounting team who've done a wonderful job of really securing a strong balance sheet, and we've got plenty of capacity there to continue to make acquisitions. We prioritize technology and technology-enabled workforce solutions. So things like Stratus was a great example of where you're combining technology and people and creating a much more efficient solution for clients. Synzi is another great example, much smaller, but it's the kind of investment we need to be making into the future. We will look at staffing opportunities, and I'd say more inclined to do that now than I would have been 2 to 3 years ago because of the changed landscape and the imbalance of the demand and the supply of clinicians pretty much across the board. We could certainly use additional capabilities, different -- additional trained recruiters, account manager, supply of clinicians. So it's probably come up. I wouldn't say it's at the tippy-top probably still technology, technology-enabled workforce solutions. But staffing solutions would be a pretty close second. So what's out there? Well, valuations are high across the board, particularly on the tech-related stuff. And you want to make sure that we've got a pretty clear path to how it's going to be value added for our clients and how we are going to add value, not just a good business to be in, but we're going to add value by being able to combine it with our other strategic solutions. And then for the staffing-related business, it's really about the quality of the team and the people, everyone is doing well in this environment. So I think we're certainly capable of sifting through the bill rates and the volumes and making sure we understand what we're paying for. But what's most valuable to us is the team itself, trained recruiters, account managers, the supply. We do a really good job of measuring the overlap in their database versus our database and how much we think we can increase the productivity of their recruiters. You might recall the last staffing acquisition we did was in 2019 with Advanced, which I think goodness brought additional capabilities in Allied as well as Nursing. That advanced team has done fabulously. Their productivity has increased as we've gotten them onto our systems, gotten them into our MSPs. And then, of course, we have the schools business which we just love and we were able to add that to our school business and get a little bit more scale there. So those are the kinds of things that we'd be interested in. We've been disciplined, as you know. So we'll just continue to look to the right thing comes along.

And interesting on the staffing ones, do you feel like you're able to really understand going in what the cannibalization rate will be. So if you're call on the same nurses that they're calling on, are you able to sort of get a sense of that early on as to how much there might be an overlap in their revenue stream? Have you gotten pretty good at that?

Yes. I'd say it's a huge strength of our team, actually, our ability to assess but then execute on getting the synergies and understanding where they exist. We've done so many staffing acquisitions and integration. So we've got a really strong playbook and more importantly, a really strong team that knows how to do this and has done it dozens of times.

Okay. All right. I think that's a good place to end. I really appreciate you guys participating once again in our health care conference. It's always great to have AMN Healthcare with us. Susan, Randy, Santhi and Jeff, thanks so much for your time. And hopefully, next year, we'll be doing this in person instead of virtually, and I wish you all a great Thanksgiving in the meantime.

Likewise, A.J. Thank you for everything you do. Appreciate you.

Thank you, A.J.