In this review of Trusted Health, we discuss how Trusted Health has transformed the nurse recruitment business in the Healthcare industry. We go in-depth about its business model, addressable market, and its scalability going forward
What Does Trusted Health do?
Trusted Health is a healthcare employment platform specifically for nurses. It basically helps the nurses around the country in getting contractual and full-time opportunities based on their preferences related to location and skill-sets. Further, Trusted Health extends the complete W2 benefits by handling all the paperwork, Payment mechanism, Insurance Benefits, etc.
What Problem does Trusted Health Solve?
Problems faced by Hospitals
According to the US Bureau of Labor Statistics, there will be an expected shortfall of around 203,700 registered nurses each year until 2026. This is because of the higher demand on the back of increasing want for preventive care, aging demography, higher chronic diseases, and alternative employment options such as nurse staffing and traveler agencies.
There are many supply-side constraints as well. According to a survey conducted by AACN on 2019-2020 Enrollment and Graduations in Baccalaureate and Graduate Programs in Nursing, US nursing schools rejected more than 80,000 qualified candidates because of insufficient faculty, classroom space, and other budget constraints. Even the age of the workforce has increased significantly thus leading to a higher churn rate in the workforce. According to a 2018 National Sample Survey of Registered Nurses conducted by the Health Resources and Services Administration, the average age of the Nursing workforce is 50 years. This indicates a large churn in the next 10-15 years. Dr. Peter Buerhaus project more than 1 million healthcare nurses to leave the workforce by 2030.
According to Moody’s, Southern and Western U.S. will experience the worst of this Demand-Supply gap, with Georgia, Florida, Texas, and California experiencing the highest shortfalls.
The COVID-19 pandemic further exacerbated this shortfall. States like New York experienced a massive shortfall in the number of Registered Nurses as it was one of the worst-hit states. US Hospitals badly needed the services of Travel Nurses to fill their capacities. And they needed it in large numbers.
Problems Faced by Nurses
According to the US Bureau of Labor Statistics, there were around 3.1 million Nurse jobs in 2019. This number is expected to increase by more than 220,000 by 2029. This shows the increasing demand for nurses in the entire country. But in spite of that, many nurses are not able to get the best opportunities matching their skillsets.
The Nursing industry has a very high attrition rate. According to NCBI, the national average turnover is anywhere between 8.8% and 37%. Also, the job has a heavy emotional burnout with long hours of around 12 hours per day as well.
In spite of that, there is immense uncertainty and lack of transparency in the entire hiring process. The third-party recruiters hired by Hospitals are not transparent enough in the entire hiring and onboarding process. This leads to further dissatisfaction that in-turn leads to a higher turnover rate
How Trusted Health Solves this?
Trusted Health acts as an employment platform that facilitates end to end hiring process of the nurses. They specialize in recording and matching the needs, preferences, and skillsets of the nurses and accordingly match them with daily active nurse job openings. Trusted Health has eased the entire process of applying and interviewing. Nurses’ profiles are viewed directly by job posters and interviews are scheduled correspondingly.
Trusted Health is not just a platform for employers and nurses. Their role extends beyond that as well. It offers full fledged W2 benefits to the nurses who get employed through their portal. They handle all the paperwork, payslips, health benefits, etc which bodes really well in cases of temporary gigs.
It also has a dedicated Nurse advocate comprising of the nurses who do a lot of hand-holding and guide them accordingly. They are responsible for personalizing the entire experience that helps the nurses deal with burnouts and ease them in their orientation and integrating process. The company ensures that their interests are aligned with the members by not linking the team’s commission with the number of Job acceptances by the members.
Trusted Health’s Business Model
Trusted Health has 2 separate client-facing interfaces- Nurse Facing and Employer Facing. The RNs, traveling Nurses and Nurse graduates access the 1st part while potential employers access the latter. Trusted Health acts as an interlink between both of them.
For Nurses, Trusted Health acts as an enhanced job platform. Instead of displaying all the job openings, it only displays those job openings which match the preferences, skillset, and other needs of the RN. In this way, a lot of administrative work of the employer is reduced as they will get applications from only those who are genuinely interested in the role.
Nurses get more than just relevant job openings. Each user is assigned to a Nurse Advocate who personalizes the entire process. The Nurse Advocate has the relevant experience and responds to all the queries of the user. Once the user accepts a job, Trusted Health acts as the employer. They handle all the payments, overtime, benefits, paperwork, sick leaves, etc. In this way, the nurses are able to have complete transparency in the entire process.
Understanding the Addressable Market
As per the Bureau of Labor Statistics, the total job openings in the registered nurses space are set to increase significantly. In fact, the job outlook seems to be growing faster than the industry average. With pandemic exacerbating the grave shortage in the RN requirements, we believe the demand will only increase going forward. AACN has also reported an overall increase of 5.1% in the total number of nurse graduate enrollments.
Currently, around 3.09 million Nurses are working across the country. This number will increase significantly going forward. Since the journey of an RN involves multiple stints instead of a single permanent role, we believe that the number of footfalls will also increase at a much higher pace. On average, the contractual gigs lasts for 13-14 weeks for an RN. Therefore, we can expect the same user looking for contractual / full-time opportunities once again with Trusted Health.
This was evidently visible during the COVID Pandemic. The RN requirements in NYC and other COVID affected states increased dramatically. According to the Professional Association for Nurse Travelers, there are more than 25,000 Traveling Nurses in the country. We believe that this number will only increase going forward. Pandemic has resulted in an abrupt upswing in RN demand in different states. This increases the demand for Traveling Nurses. Trusted Health has been the go-to app or platform for both the healthcare facilities as well as nurses to cater to these demands.
Trusted Health was established in 2017. It started out as a platform that changes the information imbalance between nurses and the recruiter. It wanted to get rid of unfair third party commissions. Therefore it had a vision and business model of putting nurses at the forefront.
This helped gain traction among the nursing community. They were able to get job interviews on the basis of their preferences. This was a huge bonus for Trusted Health and that helped them add more users. Even recruiters had significant administrative cost savings. They received relevant applications and hence did not spend a lot of their time and effort on reviewing and shortlisting candidates.
Similarly, post-acceptance, Trusted Health managed all the paperwork which benefited both the nurse and the employer. Especially in cases of traveling nurses, Trusted Health provided them with insurance and benefits which a conventional hospital would never agree to pay. Therefore they gained a lot of employers as well.
The situation completely changed once COVID hit the country. The demand for traveling nurses increased significantly. Many healthcare facilities needed immediate access to Nurses. The employer usage increased significantly and many nurses started actively using the platform to cater to the increased demand.
Currently, it operates in all 50 states plus the State of Columbia as well. Trusted Health users get daily updates regarding new job openings as well as notifications related to pending documents. This demonstrates the acceleration in the scaling of the business.
Trusted Health did a revenue of $28 million in 2019. The guidance for 2020 has since been shattered because of COVID.
Future Growth Opportunities and Potential
- Assisting Foreign Nurses: Trusted Health can extend its offerings to foreign healthcare professionals coming into the country as well. With the evident gap in demand and supply of domestic nurses going forward, Foreign nurses are a very good alternative. Therefore, extending the services to immigrants will further boost the current business model.
- Integrate Services beyond Nurses: Trusted Health right now is exclusively for Nurses. With the network of its relationship with employers, it can create a similar portal for other healthcare professionals as well. We believe this will help them diversify the business with multiple revenue streams. The dynamics for healthcare professionals like Surgeons, Emergency Care, etc are pretty similar to that of a Nurse. Therefore, Trusted Health can extend the offerings within its current business model.
- Exclusive Relationship with Hospitals: Trusted Health can be the only way in which nurses and other healthcare professionals get hired. Adding more users will definitely help the company achieve this proposition in the future. It can scale its B2B business significantly as it has access to a large database of nurses, their preferences, and performances over time. This can be crucial for a healthcare company looking to hire. Even the administrative duties reduce significantly as Trusted Health takes care of this. Therefore, we believe that such a relationship is possible in the future and it’s a win-win situation for all of them.
- Bigger Job Platforms: Bigger Job Portals such as Linkedin are prime candidates for acquiring Trusted Health. Trusted Health has a distinguished database of needs and preferences of Nurses and Healthcare Employers. We believe immense synergies can arise from this acquisition. Also, Trusted Health is eating into the user base of Linkedin, mainly nurses. Therefore it makes all the more sense for them.
- Other Tech Giants: Tech giants such as Google, Amazon, Apple, etc can be interested as well. Since Microsoft acquired Linkedin in 2016, the other biggies in the software industry can counter the same by acquiring Trusted Health. The AI currently used by Trusted Health can further be modified by them. They can conveniently extend the current offerings beyond healthcare to other contractual gigs as well. This will help them compete on multiple fronts.
- Traditional IPO Route: With $28 million in revenues and a significant increase in 2020, IPO looks a possibility. Craft Ventures, the current VC invested in the company, commented positively about the efficiency of capital allocation. This can also be another point of attraction for institutional investors and Mutual Funds to participate in the IPO.
Financial Snapshot and Funding History
Trusted Health did $28 million in revenues in 2019. The financials for 2020 has scaled significantly with COVID affecting the industry. It has so far raised $25.5 Million since 2017.
- The company raised $1.5 Million on Aug 21 2017 from Founders Collective and Juney Ham.
- Trusted Health raised $4 Million on Aug 21, 2018. Felicis Ventures was the Lead Investors. Other investors include Abstract Ventures, 1984 Ventures, Wavemaker 360, and Texas Medical Centre.
- The company raised $20 million in its Series A round on May 6, 2019. Craft Ventures was the lead investor. 5 other investors participated including Felicis Ventures, Founder Collective, Abstract Ventures, and Healthbox.
Trusted Health has a total of 9 investors invested in the company.
Mr. Matt Pierce is the founder and CEO of Trusted Health. Prior to founding Trusted Health, he was the GM of Hired Inc. He has multiple start-up experience. Matt founded companies like Pierce Consulting LLC, VitaminBeer, and William Paid LLC. He has diverse work experience as Sales Consultant at Ford Motors and as a Consultant at First Site Ltd.
He completed his BBM in Marketing and Sales from Illinois State University and is a Certified Contingent Workforce Professional.
Mr, Lennie Sliwinski is the Co-Founder of Trusted Health. He has start-up experience as well as co-founded CabMe, a location-based phone application connecting passengers to taxi drivers. Lennie previously worked as the Director of Marketing at Hired Inc., a two-way marketplace that connects Job Seekers and Companies. He also has a work experience at Adlucent, a full-service marketing technology & analytics company.
Lennie completed his business administration degree from Bowling Green State University. Later he completed his J.D. from Cornell Law School with a concentration in Business Law and Regulation.
Trusted Health: Investment Risks
Data Protection Risks
Trusted Health has a huge database of nurses and their preferences as well as data related to payments and other related paperwork. This is extremely confidential and can be susceptible to external hack attacks. The company has repeatedly stated on its website how it’s not in the business of selling user database to employers. This shows how important data privacy is for the company.
Bigger Fishes Entering the Fray
Currently, Trusted Health does not have any direct competition. Few competitors like Nomad Health and Jackson & Coker compete in the same space but specialize in Doctors and not nurses. But looking at the current demand, especially due to COVID Pandemic, the industry can be an attractive proposition for bigger players to enter. The company does not have any barriers to entry as of now which can further exacerbate this risk.
Demand Tapering down Post-COVID
Currently, some of the travel nurses that were initially hired in NYC via Trusted Health had their contracts canceled. This was due to demand tapering off as the number of COVID cases went down. This created a lot of discomfort among the nurses as some of them left their full-time jobs to travel. Therefore, we believe if the demand tapers significantly and Trusted Health does not anticipate it accordingly, a lot of negative attraction may build up that can be detrimental to the company.
Therefore, we believe that healthcare as an industry is at a critical juncture. COVID Pandemic has pointed out the pain points in the traditional Healthcare Industry. Trusted Health has disrupted the industry with its blue ocean strategy. Going Forward, we do believe that Trusted Health will be a big player in the Nurse Recruitment Process and establish itself as a key stakeholder in the entire industry.
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