Competitive Labor Market Lights a Fire Under Hospice Employers

Hospice providers now compete for new hires as fiercely as they do for market share. 

And with that competition heating up this year, the largest home health and hospice companies are streamlining their recruitment and onboarding processes to enable more clinicians to hit the ground running.

In tandem with those initiatives, hospice employers are enhancing their retention efforts with technology and redesigned staffing strategies, while also pursuing investments that could bolster their workforce.

“If we get the demand that seems to be there, if we get more nurses, we should be out of the woods,” Nick Westfall, CEO of VITAS Healthcare, a subsidiary of Chemed (NYSE: CHEM), said at the virtual Oppenheimer 32nd Annual Healthcare Conference.

Timing wise, the recruitment and retention investments are critical. As COVID-19 starts to abate and the normal business of health care resumes, providers expect admissions, upstream care and length of stay to once again tick upwards.

This means hospices have to scramble to ensure they have sufficient staff to meet that demand – or risk losing business to their competitors.

“It’s workforce, workforce, workforce,” Westfall continued. “We’ll manage the market dynamics as they continue to subside from patients accessing the benefit. Those that have the clinical workforce will be able to actually respond to the care needs.”

In hospice and other post-acute care settings, providers are reporting that pre-pandemic health care utilization is on the rebound.

In part, that’s because patients are no longer putting off elective procedures or declining in-person home visits from medical professionals. Similarly, referral sources are once again sending patients to skilled nursing facilities (SNFs) to recover, with assisted living operators also dropping visitation restrictions.

These reports are anecdotal, and real-time utilization data are scarce. Nevertheless, hospice providers are citing these upward trends with increasing frequency.

Evidence shows that across the board, people are resuming activities that they avoided during the height of the outbreak, according to the international market research firm Ipsos.

The data firm found that while people in the United States remain worried about COVID, they are less likely to change their behavior as a result. Behavioral trends among seniors were consistent with this pattern among the general population.

While not specific to the industry, this lends some credence to the perceived rebound in health care.

Case in point, Lafayette, Louisiana.-based LHC Group (NASDAQ: LHCG) saw average daily hospice census rise to 7,024 in Q4 2021, up 62% from 4,320 in the prior year’s period.

The average length of stay for LHC Group hospice patients also rose during Q4, nearing pre-pandemic levels.

Additionally, LHC Group saw just above 10% in organic admission growth thus far in Q1 2022, up from 8% the same quarter last year.

“I’m probably more fired up and bullish about the long-term growth prospects than I’ve ever been,” LHC Group President and COO Joshua Proffitt said at the Barclays Global Healthcare Conference. “The demand for the services in our industry right now are accelerating at a level that we’ve never experienced.”

To meet this demand, hospice providers need sufficient staff to care for that influx of patients, and they are competing with the entire health care sector to acquire those human resources. This includes hospitals, where most clinicians train, as well as staffing services that tend to offer more flexible scheduling and higher wages.

This is pushing providers to be more nimble in their recruitment and onboarding practices.

Baton Rouge, Louisiana-headquartered Amedisys Inc. (NASDAQ: AMED) has become laser-focused on recruitment and retention as well as optimizing the productivity of its existing workforce. This includes employee satisfaction surveys and focus groups, staffing-related incentive plans for management, and implementation of a predictive analytics system to reduce turnover.

Consequently, the company saw a 27% increase in recruitment headcount in Q4 2021 and reported a 9% decline in nurse turnover.

“We’re obsessive on retention. We feel like the most impactful lever in our organization is retaining our clinical staff … and you can leverage that capacity on organic growth and taking care of your patient,” President and COO Chris Gerard said at Barclays. “This is something that we live and breathe every single day to make sure that we have clinical capacity.”

Many of the larger hospice companies during the pandemic saw higher labor costs for contract nurses filling in for quarantined full-time staff. Though most of the publicly traded giants report those numbers are coming down, Amedisys is capitalizing on the growth in that adjacent industry and with leverage that to augment its ranks.

Amedisys in January invested an undisclosed amount in a Series F round for nurse staffing agency connectRN and is working with that team to develop its home health- and hospice-specific capabilities.

Another emerging strategy among a range of companies is to reduce the time between receiving a job application and putting boots on the ground.

Addus HomeCare Corp. (NASDAQ: ADUS) has reinforced its cadre of recruitment staff and is now implementing a new candidate tracking system to boost front-end communication with new talent.

“A lot of the individuals when they apply for a job, they’ve probably applied to four or five places at the same time, and it’s really the first to respond who wins in most cases,” Addus President and Chief Operating Officer Brad Bickham said at Oppenheimer. “Improving our response time and our ability to communicate with candidates is something that we’ve been working on. We’ve got a new system coming in that I think will even enhance that further.”

Taking a similar approach, Aveanna Healthcare Holdings (NASDAQ: AVAH) has reduced onboarding time by 80%, CEO Tony Strange said during a Barclays presentation. A component of this is offering virtual on-demand training classes for new hires, removing the necessity of two-day, in-person orientations.

The company has coupled this with flexible scheduling for its part-time clinicians, as well as offering same-day pay. This includes the roll out of a caregiver smartphone app designed to give employees more control over their own schedules.

But for all of the discussions taking place, rest assured that more is going on behind the scenes.

The symmetries among hospice executives’ comments on this issue reflect a need to reassure stakeholders that they are making progress on the workforce problem — without exposing every card in their hand.

“If anyone had found the three or four silver bullets that were really going to work effectively, they’re going to tend to execute those without sharing any of those publicly,” Westfall said. “We’re doing many of the similar things and hopefully just going to execute them better than everybody else in health care as it relates to elevating the total number of clinicians coming on board, being hyper focused on retention, and specifically in certain timeframes of establishing relationships starting before they come on board.”