Home Health & Hospice Week

Labor shortage will resolve as COVID recedes, execs predict.

For small and medium home health and hospice companies, it may be a comfort to know the critical labor shortage is hitting deep-pocketed chains hard as well.

In their most recent earnings calls, CEOs and other top execs recounted their staffing difficulties during the COVID-19 Public Health Emergency, outlined their impact, predicted where the shortage will go, and divulged their secrets for recruiting and retaining elusive nurses, aides, and other staff.

“The notion of nursing shortages isn’t new and didn’t arise just because of the pandemic,” noted LHC Group Inc. COO Josh Proffitt in the company’s Feb. 24 earnings call. “I think the pandemic exacerbated it and really shined a light on it,” he said.

“We’ve seen the continuation of the PHE, significant workforce issues, continued growing demand and lack of capacity for home health,” noted David Kemmerly, Amedisys

Inc.’s Chief Legal and Government Affairs Officer, in the chain’s Feb. 24 earnings call.

For Amedisys’ home health and hospice lines as well as its acute-care-in-the-home Contessa unit, “registered nurses are typically the ones that are initiating the care that we’re providing, and that’s the gating factor of whether or not we can admit the patient, is whether or not we have the clinical staff to be able to take care of them, but it starts with having the nurse to be able to do the admission,” related Amedisys COO Chris Gerard in the call. “So for us, that is why workforce optimization is critical,” Gerard said.

A number of companies referenced their use of contracted staff to stem shortages, but that’s not an option on the hospice side, which has regulatory contracting limitations.

“For VITAS, the most important issue we are managing is labor,” said Chemed Corp. CEO Kevin McNamara in the company’s Feb. 25 earnings call. (Chemed is VITAS Health Corp.’s parent company.) “Staffing of licensed professionals has been exceptionally challenging to ensure an adequate mix of licensed health care workers on a market-by-market basis. There has been an exodus of qualified workers industry-wide. VITAS has not been spared the effects of the labor market dynamics affecting the broader health services industry,” McNamara relayed.

“Turnover within our licensed staff remains well above our pre-pandemic rates,” McNamara added. “VITAS continues to expand hiring and retention initiatives in all markets. The decline in supply of health care workers continues to increase pressure on salaries and wages,” he continued.

McNamara offered some stats. “VITAS had a recent month where referrals … were up 8 percent and admits were down 11 percent,” he illustrated. “You can’t send an admitting nurse out … because you’re down in admitting nurses and/or you’ve had clinical shortages, so the admitting nurses had to go out in the field to serve patients, which is the highest priority to us,” he related. “It tells you that things are out of whack.”

In the call, VITAS CEO Nick Westfall referenced “travel nurse pricing and extreme price gouging that then has a ripple effect through the rest of the health care system.” (Trade groups including the American Hospital Association and hundreds of legislators have requested the Federal Trade Commission, the White House, and other regulators investigate the issue.)

Encompass Health Corp. estimates it lost “at least” 1,700 admissions in the fourth quarter of 2021 due to staffing constraints, CEO Mark Tarr said in the company’s Feb. 2 earnings call.

Encompass added 133 nursing Full Time Equivalent employees in Q4 on top of the 127 new nursing FTEs who joined it in Q3, Tarr reported. “These recent hires … have served primarily to backfill for quarantined employees,” he said.

Quarantine during Omicron hit everyone hard. “The issue of labor, particularly around quarantined staff, has impacted home health much more significantly than it has the hospitals,” observed Tarr. Encompass operates both home health agencies and inpatient rehab hospitals. “We know the demand is there for both segments,” he noted. “It’s been much more difficult to treat that demand [in] home health than it has been [for] the hospitals. Hospitals have a much easier time covering for quarantine staff. There is a much greater means of flexibility for covering, so it doesn’t impact volume near as much,” he said.

“The Home Health segment had as many as 1,300 staff members out one week in quarantine in the month of January, which surpassed the previous year high under Delta,” Tarr said.

For Amedisys, “at our peak in mid-January, we had the highest percentage of clinicians on quarantine since the beginning of pandemic at approximately 7 percent, whereas today, the percentage is closer to 2 percent,” Amedisys CFO Scott Ginn revealed in the Feb. 24 earnings call. “We had volume misses of 2,300 admits and recerts in Home Health, and misses of 200 admits in Hospice,” Ginn said.

At LHC Group, “we saw a large spike in the percentage of our clinicians on quarantine in late Q4 and early Q1 due to COVID variants, compounded by lower availability of labor overall as the industry struggled to fill open positions,” CEO Keith Myers said in its earnings call.

“The percentage of Home Health clinicians on quarantine due to COVID-19 went from a high of 6.5 percent in January 2022 down to 0.6 percent today, which is the lowest quarantine level since July 2021,” LHC said in its earnings released issued Feb. 23.

Lowered capacity isn’t the only downside of the staffing shortage. Labor costs are going way up.

For example: Encompass Health paid $21.3 million in sign-on and shift bonuses in Q4 2021, compared to $9.1 million in the year-ago quarter, Coltharp noted.

Despite the rough December-January period, home health and hospice execs are optimistic the labor situation will get improve.

“Assuming there’s no … new variants and things that are going to be driving different types of demand, we feel like this migration of the nurse to the traveling nurse role and the wages that they’re able to get for doing that, I think that settles out,” predicted Amedisys’ Gerard. When hospitals have lower demand “and nurses want to get back to where they have a stable job and they know what they’re going to be expected to do, and know where they’re going to be staying and living, I think that’s going to create better … stability for us,” Gerard said in the call.