Efforts to mitigate the health care workforce shortage are starting to pay off for LHC Group (NASDAQ: LHCG), though the company is still experiencing higher labor costs due to the current need to employ more contracted personnel. LHC Group took steps to enhance their recruitment and retention strategies early in the year that are seeing positive results to date.
LHC Group has been taking a regional approach to recruitment across each of its service lines. Each service, such as home health or hospice, has dedicated hiring teams that are focused on specific geographic areas. The home health and hospice provider began piloting the strategy during the last two quarters of 2020.
Also giving LHC Group a leg up is a reduction of their full-time staff coming out of quarantine due to COVID exposure, enabling them to start reducing utilization of contracted labor. The higher levels of contracted labor added substantially to the company’s costs per visit during 2021.
“There are definitely labor pressures going on throughout the whole health care industry. I’m pleased with what we’re starting to experience and see as far as our number of employees coming back down off of quarantine, which is a nice trend,” said LHC Group Chairman and CEO Keith Myers at the Credit Suisse Healthcare Virtual Conference. “I’m also pleased with all of our recruiting and retention efforts and what that has turned into both from a hiring perspective and the net hiring growth that we’ve experienced.”
LHC Group hired close to 1,000 more employees during the third quarter of the year that it did in Q1, the company reported in an earnings call.
More patients than ever are seeking hospice and palliative care, and the industry may not have enough trained clinicians to take care of them. More than 35% of hospice leaders surveyed by Hospice News and Homecare Homebase earlier this year cited staffing shortages as a top concern for their organizations, along with regaining access to patients in facilities.
Currently the United States has 13.35 hospice and palliative care specialists for every 100,000 adults 65 and older. An April 2018 study estimated that by 2040 the patient population will need 10,640 to 24,000 specialists; supply is expected to range between 8,100 and 19,000.
Hospice and palliative care providers are already seeing shortages in other disciplines, including chaplains, nurses, and social workers. As far back as 2008, the U.S. Centers for Medicare & Medicaid Service (CMS) began allowing hospice providers to use contracted nursing staff because not enough nurses were available to fill permanent positions.
In addition to the regional strategy, LHC Group has reinforced its talent acquisition team during the past year. The number of staff in that area is up 65% to 56 employees, from 34 in 2020. These recruiters are focused on markets in which the labor shortage is at its worst, where they are seeing capacity issues, or where they see the most growth potential that could be accelerated by adding staff, according to Myers.
“The results of today are due to the efforts of 12 months ago. You can’t jump on a staffing shortage, labor issue, and move the needle immediately,” Myers said. “We’ve had a better net hiring momentum behind [recruitment velocity], because in a market right now where you’ve got everyone out there trying to get nurses, if you’re not quick enough to get them, that’ll have an effect.”
The company also rolled out an employee referral program in January that is expected to generate more than 2,000 new hires by the end of the year.
In March, LHC Group agreed to provide $20 million in funding during the next 10 years to the University of Louisiana at Lafayette College of Nursing and Allied Health Professions. The investment is expected to finance in-person and virtual degree programs beginning in the nursing school. In time these dollars will be used to support more than 55 degree programs in each of the university’s schools. This will include post-acute care certifications at the graduate level.
A national hospice, home health and facility- and community-based care provider, LHC Group has locations across 37 states and the District of Columbia, reaching 60% of the country’s 65 and older population. The company anticipates a total revenue of roughly $2.2 billion in 2021.
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