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KEY CALL OUT
AMN continues to be a Best Idea Short. Labor pricing continues to ease along with falling Hospital COVID ICU occupancy. Hospitals reporting critical staffing shortages has fallen from 20% to 10% even as we've seen BA2 trend higher in recent weeks. The same HHS data that contains critical staffing shortages data also shows that COVID inpatient occupancy in New York looks like its rolling over AND COVID ICU occupancy has remained flat since 4/18/2022, well past the point in prior waves where rising cases and hospitalizations had resulted in rising ICU occupancy. Without rising ICU occupancy there won't be the public health actions that we are all so ready to be behind us.
In addition to the Quad-Factor analysis, AMN has a long enough history that allow us to measure the stock's performance across all prior Macro Quads. Quad 4 is clearly the weak point. Now if the counter to the short is "nursing shortage," that's been a feature of staffing for many of the prior Quads measured in the chart. Looking ahead, the upcoming labor report for May could be a problem if "nursing shortage" is your fundamental anchor. JOLTS data comes from provider surveys and as the crisis abates, it seems likely that the some of those postings come down. If JOLTS levels drop while Health Care hiring slows, which is a possible scenario, rates will be set to fall further, and "nursing shortage" won't be so important.
POSITION MONITOR
CLICK HERE for the updated workbook.
ESTIMATE MONITOR
The cuts to discretionary health care look interesting with COO, EYE, XRAY, PDCO all weakening. OSH and ONEM up on the initiation.
PERFORMANCE MONITOR
Is ATIP making the turn? We're optimistic about a broader recovery in utilization 2H22 and that should be a tailwind for PT.
FACTOR MONITOR
Factors reverting to Quad 4 expected performance, high short interest under-performing, large cap out performing.
NEWS & TRanscripts
BDX Medical Distributor Interview
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Hospitals beginning to search for lower cost alternatives while overall device/product prices are rising as a result of ongoing supply chain challenges.
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Disruption in plastic manufacturing, polyurethane, and PVC, but upward trend in inflation is tied to all products through elevated water freight costs from manufacturing in Asia.
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BDX's most important selling tools as their size (reputation) and existing relationships; many products in the portfolio are commoditized but hospitals don't often switch, so having the catalog in their hands makes his work easier on a regular day.
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The most common way to displace a competitor is when they have an open RFP where it becomes a price- to- price comparison; availability and customer service can also be strong aspects for incremental price.
TFX Urologist Interview
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Interventional urology doc, operates a center for excellence for UroLift, and has completed over 500 implants of the device; currently using 80%/20% TFX's UroLift/BSX's Rezum.
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Limitations for UroLift are solely based on proper patient selection in terms of size of the prostate and presence of a median lobe; overall good clinical outcomes and patients prefer due to the shorter catheter time and faster clinical improvement.
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Believes the number of implants (anywhere from 2-7) is likely the only reason holding back adoption; reduction in physician's profits if all 7 implants are not properly reimbursed.
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UroLift completely replaced transurethral microwave thermotherapy (TUMT) in his practice.
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Sees that TFX is using Facebook ads and cable ads, but would like to see them do more to increase awareness; volume of BPH overall has been strong.
AMN Travel Nurse Interview
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Left medical sales rep job to become a travel nurse during the pandemic; still working as a travel nurse and planning to continue for another year or 2.
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Working next to full-times that are making $1k per week compared to $3-5k for travel; expects rates to fall in the summer due to historical seasonality, not demand. said that rates typically go back up in the fall, "it will depend."
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Prior to COVID, 20-40% of nurses on the floor were travel; in her current placement, 90% of the facility is from travel nursing.
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works with 6 agencies, including AMN, to make sure she has the best offers, line of sight into the next job.
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Has seen retention bonuses for full time employees, but they often require a three year commitment to the hospital; employers pushing for nurses with bachelor's degrees, but will sign an associates degree as long as you're working toward BA.
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Shortage extends to CNA's as well.
CVS, TDOC: CVS Health to launch new virtual primary care solution on single digital platform (Company News): "CVS Health Virtual Primary Care will feature a member-selected physician-led Care Team that can consist of nurse practitioners, registered nurses, and licensed vocational nurses who can easily be accessed through the platform." TDOC not mentioned.
ME: 23andMe Reports FY2022 Fourth Quarter and Full Year Financial Results (Company News). It's good that the D2C genetic testing company has $550M in cash on its balance sheet, but disappointing revenue and high burn in Quad 4 is not a good place to be.
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Revenue $260-280M; FactSet's revenue consensus is $344.8M [2 est, $335.7-354.0M]
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Adjusted EBITDA ($195M)-($215M); FactSet's adjusted EBITDA consensus is ($237.1M) [2 est, ($348.8)-(125.3M)]
TDOC: Senate Finance Committee details telehealth 'Bill of Rights' for mental health care services (Fierce Healthcare). "Removing Medicare’s requirements for in-person visits in order to qualify for telehealth reimbursement from Medicare. Instead, providers would attest to certain quality and program integrity standards for mental health services via telehealth."
Hospitals, Health Systems: MedCity Pivot podcast: Premier CEO believes more provider consolidation is necessary to achieve parity with payers (MedCityNews).
CALENDAR
All data available upon request. Please reach out to with any feedback or inquiries.
Have a great day out there!
Thomas Tobin
Managing Director
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Justin Venneri
Director, Primary Research
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William McMahon
Associate
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*Please note, not all Position Monitor names make it into the MicroQuad output - most likely due to a lack of sufficient historical trading and estimate data.
