Hospices Face ‘Astronomical’ Costs to Attract and Keep Staff

Hospices are allocating more financial and operational resources on staffing initiatives than ever before to remain afloat and grow.

Recruitment and retention have been top of mind for hospice providers amid ongoing workforce shortages that have only worsened with the pandemic. More than 67% of the 203 hospice care professionals surveyed indicated that staffing would be their greatest non-COVID related challenge this year, according to the 2022 Hospice News Outlook Survey and Report. This is a rise from 33% the prior year.

Staffing issues are chipping away at hospice revenues from all sides, according to Kathleen Benton, president and CEO of Hospice Savannah.

Advertisement

“It’s killing me financially, between direct labor costs like retention efforts, raises, and incentive pay in sign-on and retention bonuses,” Benton told Hospice News. “Indirectly, it’s anything from human resources ensuring great employee benefits to their input in recruitment. We’re doing all we can to make sure that our people feel very well taken care of, and that requires time and effort.”

For some providers, the situation has been dire, leading some to either temporarily or permanently close their programs. Recent leading reasons cited for hospice closures have included rising costs for travel expenses and compensation packages.

Offering competitive compensation has been a financial pain point for many hospices, rooted in wage hikes, inflation, and competition from larger health systems.

Advertisement

For Hospice Savannah, recruitment and retention costs represent an estimated 30% of their budget, or roughly $.5 million, Benton said. However, associated indirect costs are difficult to estimate, she added.

Hospices need to strike a “very delicate balance” when establishing programs like sign-on bonuses, according to Benton. At some point it becomes a “dangerous” line to walk what a hospice can afford and where they might “max out,” she stated.

Georgia-based Hospice Savannah is among five nonprofit hospice providers that formed the Southern Care Collaborative, which includes providers in Georgia and South Carolina. Strategic collaboratives like this can allow nonprofit hospices to pool their financial and operational resources, including some associated with recruitment and retention.

Case in point, membership in the collaborative allows Hospice Savannah to lease a recruiter on a month-to-month basis during times when staffing needs are higher, Benton said.

The costs of attracting and retaining new staff can run high for providers of all walks.

A new retention bonus program represented a $44 million investment for Chemed Corp. (NYSE CHE) subsidiary VITAS Healthcare. The company offered $2,000 to $15,000 per licensed health care professional for 12-months of continuous employment. These one-time retention bonuses were funded through unspent Provider Relief Funds, and were designed to increase VITAS’ clinical staff teams of licensed nurses, nurse managers, home health aides and social workers.

The initiative has allowed VITAS to continue “building back” its clinical capacity to pre-pandemic levels, according to CEO Nick Westfall. Since the initiative’s launch in July, the company has hired 172 clinicians during the third quarter and has significantly reduced turnover.

““[The bonus program] added fuel to the fire in terms of our ability, not only to continue retaining more of our clinicians, but attracting more to come into the workplace,” Westfall said at the Credit Suisse Healthcare Conference.

Creating a supportive workplace for staff is also a large key to retention for hospices.

Engaging employees for their feedback on areas of improvement can go a long way in showing them they’re valued, according to April Wilson, vice president of hospice operations at Silverado Hospice.

The California-headquartered organization has instilled a listen-and-take-action culture, holding conversations with employees to gauge areas of dissatisfaction. This has led some staff who had left Silverado Hospice due to return, said Wilson.

“Although we’re competitive, some of our associates have left, tempted by higher pay or more vacation time. But they leave and come back because they didn’t have the same level of values lived,” Wilson told Hospice News. “We call it the ‘Silverado Boomerang Effect.’ It really comes down to our values and the way we treat our associates. It’s a mix of our culture and us taking actions after listening to staff feedback.”

One of the key successes in creating a positive work environment is having a nimble approach to providing end-of-life care, according to Dr. Balu Natarajan, chief medical officer for hospice at Dallas-headquartered AccentCare.

This includes hospice leaders having direct interactions not only with staff, but also engaging with patients, families and referral sources, Natarajan indicated.

“Get to the bedside every now and then. Go out and ride with a hospice aide or clinician. Take a service recovery call. Call someone who complained – get lambasted for doing it wrong. That’s all a big part of how we keep things front and center,” Natarajan told Hospice News at the ELEVATE conference in Chicago.

But developing a supportive workplace culture can also include expensive building blocks for hospices, such as the costs of employee appreciation programs.

“One of the things that is costing me heavily are our exhaustive appreciation efforts and making sure people who stay with us are well cared for,” Benton said. “It’s things like buying season tickets to both our local hockey and baseball teams, or having regular drawings for staff car detailing. We also not extend our virtual reality therapy program beyond our patients to staff and caregivers feeling burnout. All of these things add up to astronomical amounts.”

Companies featured in this article:

, , , , , ,