Home Health & Hospice Week

2 key strategies can salvage staff morale during a fuel crunch.

Damage control is the name of the game this summer as fuel costs threaten to drive skilled staffers away from your agency.

"The price of gas is definitely affecting the ability of home health agencies to recruit and retain qualified staffers," says Wendy Cort of the Ohio Council for Home Care.

The average U.S. gas price hovers just over $3.20 for regular unleaded, reports the American Automobile Association. That's high enough to nudge some staffers out of home health and into health care jobs that are less travel-intensive, such as inpatient care.

Obstacle: In Ohio and many other states, Medicaid's stagnant reimbursement rates for home health care add to the challenge of compensating employees for the high prices at the gas pumps.

"Fuel costs are rising weekly, but some payors haven't increased their rates in years," notes Cort.

Foster Staff Loyalty

Keep gas prices from driving your staff away with these strategies:

• Take your mileage rate up a notch. The standard per mile rate for business travel in 2007 is 48.5 cents, according to the Internal Revenue Service. Consultants advise taking one of two routes in response to the IRS advisory:

1. If your profit margin is slim, you may not have to fork over the whole 48.5 cents to make a difference in the minds of your employees.

The IRS rate is used as a benchmark by the federal government and many businesses to reimburse their employees for mileage--but the rate accounts for more than the cost of fuel, explains the IRS. For example, it also allows for maintenance costs and general depreciation of the vehicle.

Try this: Explain that your rate is designed to help cover the cost of fuel for business miles traveled and inform workers that they can deduct other business travel expenses on their federal tax return if they itemize deductions.

Resource: For travel-related deduction basics, refer employees to www.irs.gov/taxtopics/tc511.html.

2. The second approach--which is likely to pay off for most agencies in the long run--is to reimburse mileage at the full IRS rate, advises Tom Boyd of Rohnert, CA-based Boyd & Nicholas. Paying the full rate is a wise investment, given the dwindling supply of qualified and committed home health aides and nurses, note Boyd and other consultants.

"It's the bare minimum agencies should be doing for their employees," says Boyd. "It really helps with morale."

• Recognize employees' concerns. Rural agencies have long struggled when gas prices rise, but the current record-breaking prices are a wake-up call for urban agencies as well, says Pat West of Pioneer Home Health Care in Bishop, CA.

In your quest to prevent mass staff exodus, be sure to acknowledge employee complaints about gas prices--an approach that can go a long way in improving employee relations.

Try this: One Ohio agency gives employees gas gift cards when prices spike as a good faith measure that helps offset travel costs, Cort reports.