Dallas-based AMN Healthcare, already one of the nation’s largest health care firms, is expanding its reach with a $300 million deal to buy a company that specializes in recruiting and placing psychiatrists, anesthesiologists, radiologists and surgeons.
On Monday, AMN announced the purchase of MSDR, which is comprised of healthcare staffing firms Medical Search International and DRW Healthcare Staffing.
MSI, founded in 2002 with offices in Florsham Park, New Jersey, and Boca Raton, Florida, places psychiatrists, anesthesiologists, radiologists and surgeons in healthcare systems. Atlanta-based DRW, founded in 2011, also specializes in psychiatry, anesthesia and surgery.
DRW CEO Chris Wang will remain with AMN as president of MSDR.
AMN said the acquisition, which is expected to close by the end of the year, would be “modestly” accretive to earnings. In the first half of this year, AMN’s revenue totaled more than $2.1 billion – down 29% from the same period last year. Its revenue topped $4.6 billion last year.
MSDR brought in $104 million last year and is on pace for $155 million this year.
The acquisition will give AMN “a larger and more diverse candidate pool that includes healthcare professionals specializing in some of the most needed and sought-after services,” the company said.
“Now more than ever, it is critical that healthcare systems have streamlined access to the services, technology and healthcare professionals needed to support patients and the communities they serve,” AMN President and CEO Carrie Grace said in a statement.
In AMN’s most recent earnings announcement in August, Grace said healthcare clients had “responded to the post-pandemic environment by increasing permanent hiring and seeking change in how they manage labor flexibility.”
One of these changes is the increased use of what is known as lieutenant workers. Locum tenens is a Latin phrase for substitute. In health care, a locum tenens physician covers or fills in for another physician who is either absent or unable to fill a shift. It’s also a way for the hospital to bring in a doctor for a job interview.
AMN reported record quarterly revenue from its locum tenens business in the most recent quarter.
In June, one of the companies in the AMN acquisition, DRW, ranked 11th on a staffing industry analyst’s list of the nation’s largest staffing firms.
“With the staffing shortages that many healthcare facilities across the country are facing following the COVID-19 pandemic, locum providers are becoming an essential part of the healthcare landscape to keep physician positions filled,” DRW said at the time.
The healthcare industry faces a shortage of up to 124,000 doctors by 2033, according to the American Hospital Association.
Starting salaries rose 19 percent year-over-year for psychiatrists, 16 percent for dermatologists, 12.5 percent for anesthesiologists and 12 percent for orthopedic surgeons, AMN’s Medical Solutions Division reported in August. This division was formerly known as Merritt Hawkins.
Orthopedic surgeons earned the highest median starting salary at $633,000, according to the report, followed by urologists at $540,000, cardiologists at $517,000 and gastroenterologists at $506,000. Pediatricians earn the lowest median starting salary at $233,000.