Enhabit Inc., (NYSE: EHAB) is seeing forward momentum on the workforce front as health care labor shortages persist nationwide.
The Dallas-based home health and hospice provider is starting to see some payoff from the groundwork the company began laying last year following its spinoff from Encompass Health (NYSE: EHC).
This includes the addition of Chief Human Resources Officer Tanya Marion to the company’s leadership team, more sophisticated data analytics for its labor pool and the introduction of a hospice-specific care management model.
“Our chief human resources officer has worked with our data and analytics team to develop a robust human capital dataset,” CEO Barb Jacobsmeyer said in an earnings call. “This is allowing us to drill down much further than we could historically on understanding what’s happening with our workforce and what we need to do to recruit and retain our staff so that we can meet the demands for our care.”
Enhabit saw its pool of full-time nursing candidates rise 19% during the fourth quarter of 2022 as well as hiring 101 new nurses, 41 of whom work in the company’s hospice segment. Nevertheless, Enhabit remains aggressive on recruitment, particularly for full-time nurses. Currently, about 39% of the providers’ nursing staff are pro re nata (PRN).
The company’s new hospice case management system contributed to the hiring increases for that segment, including the re-hiring of nurses who “enjoyed [Enhabit’s] culture, but not [its] previous staffing model,” according to Jacobsmeyer.
Prior to the introduction of this model last year, the company’s hospice processes were designed to be symmetrical with those in its home health business. But agencies in its hospice segment experienced some difficulties with those transitions, which contributed to a spike in turnover.
Enhabit is implementing the system in phases. The first was completed by the end of 2022, Jacobsmeyer told Hospice News at the Home Care 100 conference in Orlando earlier this year.
“The first phase was really to roll out the whole concept of the model, and so that was literally calls and meetings with individual branches to say, ‘This is what it’s going to look like,’” Jacobsmeyer said. “Then what they needed to do was a gap analysis from their current staffing so that they could determine what they had in place and what they needed before they could truly implement the model.”
Despite the gains, the company relied more heavily on contract nurses during Q4 as its new hires were onboarded. Currently, 30 of its 41 new hospice nurses are in orientation.
This factored into a 12.1% year-over-year increase in cost-per-day, as did reduced clinical productivity and rising expenses for fleet and mileage reimbursement employee group medical claims, CFO Chrissy Carlisle said in the earnings call.
Labor pressures continue to limit capacity in some markets, including seven for its hospice business and 62 for home health.
A second recruitment priority is bolstering the company’s sales force. Enhabit saw its headcount for direct sales staff drop by 83 employees between December 2021 and the end of 2022, though it reported 60 new hires as of January.
“Our regional leadership worked diligently over the past four months on a new organizational structure. We announced phase one at the end of the year and the final phase mid-January,” Jacobsmeyer said. “Historically, our sales and operations team had a very different reporting matrix with little to no alignment. With the new structure now in place, complete alignment now exists. We are confident this sales and operational alignment will drive success clinically and operationally.”
Enhabit saw its consolidated Q4 net service revenue fall to $271.1 million, down 0.4% from the prior year’s period. However, the company’s hospice segment yielded a 4.8% gain, reaching $54.6 million in last year’s fourth quarter. This is up from $52.1 million in Q4 2021. The company’s average daily hospice census also rose by 2.9% last quarter.
The company continues to emphasize hospice growth to co-locate more of those operations with its home health locations. This includes plans to spend $2 million to $4 million on de novos this year.
Enhabit also remains on the hunt for acquisitions in 2023, after completing three in Q4 2022.
“We continue to believe growth is an important part of our long term strategy, and we’ll continue to evaluate acquisition opportunities in our pipeline carefully,” Carlisle said.