Ohen Alexi Nazem was a doctor at the hospital, he faced a mountain of paperwork and bureaucratic hurdles every time he wanted to moonlight outside his hospital. For medical professionals, side gigs like these are common, so why should the process be so cumbersome? Inspired by the possibility of applying the concept of other online marketplaces like AirBnB to interim healthcare, he and four co-founders (including AlleyCorp founder Kevin Ryan) started Nomad Health in 2015.
During the Covid-19 pandemic, Nomad experienced explosive growth as hospitals, already facing nursing shortages, scrambled to fill positions in overcrowded intensive care units across the country. As the pandemic has (hopefully) peaked and pay rates for traveling nurses are receding from all-time highs, the underlying change of much of the healthcare workforce engaged in temporary roles rather than full-time should continue.
“One of the most important lessons we’ve learned from this pandemic is that clinical staff want to work this way,” says CEO Nazem, 40. “They don’t want to be bound by these very rigid constraints and kind of limited opportunities – in the same way that everything else in the workforce and everything else in the economy is changing.
Seeking to capitalize on this transformation, Nomad announced on Monday that it has raised $105 million in equity and debt financing led by Adams Street Partners and Icon Ventures, as the business expands beyond nurses to serve a much wider group of workers, including lab technicians, ultrasound technicians and physical therapists. HealthQuest Capital joined as a new equity investor, alongside existing investors Polaris Partners, .406 Ventures, AlleyCorp and RRE Ventures. JP Morgan and Trinity Capital provided debt financing. Nomad has raised over $200 million in equity and debt to date.
Prior to the onset of the pandemic, itinerant roles primarily appealed to early- and late-career healthcare workers. Now, this type of work appeals to a much larger segment of the market, Nazem says. First, there was a sense of moral obligation and urgency to go where help was needed when the pandemic began. Second, given the risk and demand, pay rates also tended to be much higher than permanent positions. Temporary roles have also proven to be an antidote to the burnout that plagues many positions. “Many people have sought refuge in this type of adventurous medical practice that has allowed them to continue using their skills and serving people,” Nazem explains.
Personnel industry analysts estimate that the market for temporary healthcare personnel, which includes nurses, doctors and the technician group and other roles known as allied health professionals, has grown from 18, $7 billion in 2019 to $39.8 billion in 2021. The fastest growing segment was traveling nursing, which saw an increase of nearly 250% from $6.5 billion to $22.6 billion over the same period. “It really is a one-time job market for the value of talent at any given time and right now, nurses are extremely valuable,” says Barry Asin, president of Staffing Industry Analysts.
“The key thing in healthcare staffing is that whoever can get the long-term candidate tends to win.”
AAfter peaking in 2021, some contraction is expected, which personnel industry analysts estimate a 14% year-over-year decline. It’s hard to say exactly how things will play out, but what is clear is that the baseline has changed. “We still believe the market will be much larger than it was before the pandemic for the foreseeable future,” Asin says. The rise of technology platforms is also causing traditional recruitment companies to try to compete and become more tech-savvy, he adds: “But the key thing in healthcare workforce is that the one who can get the long-term candidate tends to win.
This is where Nomad investors believe the company’s software is essential. It’s “about being nurse-centric rather than health-system-centric,” says HealthQuest founder and managing partner Garheng Kong, who joins Nomad’s board of directors. On the front-end, the user-friendly interface allows nurses and other healthcare workers to quickly register to start looking for jobs, with job descriptions that offer comparative information on people’s salaries and ratings. who held the positions. “As opposed to the placement agency that says, ‘Here’s a job for you. You qualify, you fit, take it. What you get is a list of all open requests and you as a nurse can choose and decide which one you want,” Kong says, adding that this has led to a reuse rate among users of over 70%. .
Approximately 250,000 clinicians use Nomad’s marketplace for free. While Nomad uses marketing and acquisition campaigns, Nazem says about half of new users come through word of mouth. The company has hired Maquel Shaw, previously acting chief marketing officer at Overstock.com, as CMO.
When a healthcare worker accepts a role, the person becomes a nomadic employee with healthcare benefits, malpractice insurance, and a 401(k) for the duration of the gig. Most roles tend to last around 13 weeks. “Unlike all these other gig economy companies you come across that are fighting so hard to be able to classify people as independent contractors, we’re saying no, we want them to be our employees,” Nazem says.
Nomad’s paying customers are approximately 4,000 healthcare organizations seeking to fill positions. On the back-end, Nomad’s software handles candidate sourcing, qualification screening, accreditation, and other tasks. There are no initial subscription fees. Nomad bills the hospital, takes a commission, and pays salaries and benefits to the healthcare worker. Nazem says the company, which is profitable, is on track to generate about $700 million in revenue this year.
At this time, Nomad is still aiming to expand the types of offerings it has for temporary roles, but Nazem isn’t ruling out helping to fill permanent positions in the future. Both Nazem and Asin agree that there is going to be consolidation in the temporary healthcare workforce industry as old players clash with tech-focused newcomers. “Staffing, manpower and staffing is the number one issue in every boardroom in every health system across the country,” Nazem says. “It’s going to cause a lot of movement over the next couple of years and we’re really excited to have a front row seat and a solution.”