Question-and-Answer Session
Operator
(Operator Instructions). Your first question comes from the line of Tobey Sommer with Suntrust Robinson Humphrey. Please go ahead.
Tobey Sommer – Suntrust Robinson Humphrey
I was wondering if you could give us a little bit more color on the moderating pricing that you described, perhaps talking about it on a customer size basis or geographic basis if that’s helpful and then maybe how long ago it started, and you said you don’t expect pricing erosions, so maybe comment on that as well.
Susan Nowakowski
First, I’ll address nurse staffing. I’d say there’s not a particular region or client size, although certainly the larger clients have more of an impact if they are not willing to increase rates or even more so desiring to keep rates solid or flat, so I don’t think there’s a big distinction there that you can make. We do have standard cost of living increases built in to our contracts, so there is a certain amount of somewhat natural pricing increases that will occur across the board and then for those clients that do have orders, they still want to make sure that they are competitive in their bill rate which translates through to the pay raise, but with that said, in the past year we have been experiencing about a 3% increase in our revenue per traveler per day. We expect that to moderate to kind of flat to just maybe slightly up. We are pretty confident as we sit here today that the pricing increases that we expect to receive will offset the pricing decreases, and there will be some. There will be some clients out there that will want to bring their rates down because they just don’t have the quantity of needs that they’ve had the in past.
Turning to locum, we’ve continued to see some pretty strong pricing across all of the divisions with the exception of radiology. With the softness in demand in volumes has come a need to also reduce the pricing, so going forward, we expect that to continue, so it somewhat offsets the increases that we expect to continue to see in our other areas.
Within physician permanent placement, we expect pricing to be relatively stable. We are the high-priced solution out there. We provide a premium service, and for that, charged probably a higher price than your typical contingency type of firm, so we hope that in this environment, we will be able to maintain that pricing, but there could of course be some opportunity there for softness. Does that help?
- To read the full transcript on Seeking Alpha, click here »
