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Nursing recruiters foresee rebound

By Charles Sheehan

Associated Press

PITTSBURGH -- There's good news about the nursing shortage: Some companies that supply nurses quickly for hospitals in need are diagnosing a healthier market after an 18-month shakeout.

Analysts see a consolidation under way in the industry, which had gone into overdrive in the 1990s, growing by as much as 20 percent annually in the later half of the decade with hospitals desperate for nurses.

As the economy worsened, hospitals clamped down on outsourcing. More nurses became primary wage earners and worked more hours as spouses were laid off. Hospital visits also dropped as people lost jobs and health insurance or took on bigger deductibles.

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Several companies, counting on an uptick in the economy, are moving forward with sizable acquisitions in anticipation of full hospital beds.

This month, World Health Alternatives, Inc., based in Pittsburgh, said it would acquire a Texas-based firm in a cash-and-stock deal in World Health's third acquisition in about a month.

In December, World Health completed an acquisition of its crosstown rival and expects current revenues of less than $15 million to triple if the most recent deals go through.

"It's a hot market," said Richard McDonald, president of World Health.

Other executives in the industry also say the market is due for a turnaround, though most stopped short of saying a recovery was under way.

Cross Country TravCorps in Boca Raton, Fla., reported its first bump in orders in two years, chief executive Joseph Boshart said.

The company also acquired Philadelphia-based MEDStaff in June, the company's largest deal ever.

"This market is still very fragmented, but we certainly have done a number of acquisitions which has accounted for about 40 percent of our growth," he said.

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Industry analysts are also hesitant to say there will be any significant recovery over the next two quarters, but believe it is only a matter of time.

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