Biggering

By Rich Smith, 02-21-2018

A few days ago, Steve reminded me about story of The Lorax by Dr Seuss. Having four daughters, he's read this book many times. This time was different though. As he was reading it to his daughter this time, it made him think about our industry. Then we talked the next morning, like we always do, at my desk over coffee before the day starts. And it made me think of our industry too.

"I, the Once-ler, felt sad as I watched them all go. BUT... business is business! And business must grow regardless of crummies in tummies, you know."

The simplicity of Dr. Seuss still resonates today. We've seen larger companies in our industry buy up smaller companies, mid-sized companies merge with like sized companies, or some regardless of size sell outright to private equity firms. Business is business, right? (Regardless of crummies in the tummies.) You need to look no further than the most recent quarterly earnings from the biggest companies in our space to see just how true this is. While it all looks good to their shareholders, how does it look from ground level? How do the nurses in the hospitals feel about rising margins and big profits? Search those company names in your favorite social media travel nurse groups, you'll get a very candid response. A response companies don't talk about in quarterly earnings calls.

"But I had to grow bigger. So bigger I got. I biggered my factory. I biggered my roads. I biggered my wagons. I biggered the loads of the Thneeds I shipped out. I was shipping them forth to the South! To the East! To the West! To the North! I went right on biggering... selling more Thneeds."

I've said this before, and I'll say it again. I'm not anti-business. It'd be silly for me to be part of a business while harboring a secret hatred for what we are doing. But I want to be very clear about one thing. Industry moves like this are not good for the nurse. Big moves like this eliminate choice, and choice is what drives the market. Choice means competition and better pay. When you have fewer companies, you have fewer choices. Merger, buyout, whatever you call it, it's still the same. Money goes out the door that the new company has to recoup somewhere along the way. In most cases, fueled by investors, that is sooner rather than later. A lot of times, these private equity firms aren't looking for a long-term investment. They are only interested in more purchases, repackaging, then selling after three years for a profit. When this process is repeated over and over again, the end user has fewer and fewer choices. That's biggering at it's finest.

So what was the moral to the story of The Lorax? The biggering continued until the forest was gone and the Once-ler was all alone. All the animals left, and his business was gone. What can you do to fight the biggering? Ask more questions. Be more informed. Read the quarterly earnings reports from the publicly traded companies. Consume as much content about the industry as you can. The more informed you are, the better off you'll be. A growing business is a very good thing. But growing the wrong way or for the wrong reasons hurts the end users.