October 5, 2022

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Travelling Tomorrow

Home-Based Care Providers See Staffing Tailwinds from Inflation, Travel Nursing Decrease

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The staffing situation has been dire in home-based care for a long time, but there could finally be tailwinds slowly gaining momentum at providers’ backs.

There is an increasing amount of evidence suggesting that the home health and home care labor markets could get a boost from two somewhat unexpected types of workers: sidelined ones returning to their respective fields and travel or contract nurses finally looking to find a home.

That evidence is both data-driven and anecdotal.

For instance, after a long and hard stretch during the pandemic, the Atlanta-based Visiting Nurse Health System (VNHS) has seen its best 90-day recruiting stretch in over three years.

“I have 20 nurses in orientation right now,” VNHS CEO Dorothy Davis told Home Health Care News. “We’re a small- to mid-sized home health and hospice business, so that’s a lot of capacity we have in motion in our business right now. I’ve never had 20 nurses in orientation before.”

Specifically, there is a zip code that VNHS serves where the company has been leaving $15,000 in business on the table on a weekly basis due to capacity constraints. It could never gain ground in that area from a hiring standpoint.

Until now. In just one week recently, it was able to hire three workers in that area.

There are likely a large amount of factors contributing to this encouraging stretch for VNHS. The company has a strong enough culture that word of mouth between in-house clinicians and others is still a strong recruiting source. It has also raised pay and incentives.

But it has to be more than that, Davis said.

“I don’t know if it’s 100% attributable to inflation, but I think that’s probably a component of it. I regularly hear from our staff about the inflation pressure,” she said. “We did make a pay adjustment in February that’s probably attributable to some of our success, too, but there’s just a lot more activity going on from [a labor standpoint] right now. I am also hearing from contractors who are tired of doing travel and contract work, just wanting a place to belong.”

Many home health providers have been hurt by inflation pressures. But at the same time, those pressures are also hurting the workers. Those that are employed are picking up more shifts to compensate, and others that have been sidelined due to a variety of COVID-related factors are returning to their fields.

Reactivation of formerly employed caregivers grew as a recruiting source in 2021, according to Home Care Pulse’s annual Benchmarking Study. It was one of the only recruitment sources that saw growth, and also likely ticked up more in the beginning of 2022.

“There’s people coming back to the industry that maybe were hesitant due to either regulatory issues, [personal] issues or COVID-19 that had removed themselves from the workforce,” Home Care Pulse President Todd Austin recently told Home Health Care News. “And so as we continue to see normalization from the pandemic, I believe we’ll see more employees. There are also agencies actively recruiting previous employees to come back.”

A recent analyst note from the investment group Jefferies also noted this phenomenon.

Multiple health care providers told Jefferies last month that the labor market had showed signs of improving due to an uptick in inflation, which had caused caregivers and others to launch themselves back into the labor market or take on more hours.

Undeniable data points

Todd Walrath, the CEO of the post-acute care staffing company ShiftMed, noticed something peculiar recently on his company’s platform.

A large group of workers that had downloaded ShiftMed’s app in 2019 just recently began using it for the first time.

If he had been told this – without seeing specific numbers – he would have guessed that “large group” would have meant 10 or 15 workers with that usage pattern on the app. Even then, it would have been a bit odd.

But it was far more than that. There were about 350 workers who fit that profile.

“I find it strange that not just a handful of workers, but 350, have done this,” Walrath told HHCN. “It just supports the idea that people are thinking, ‘Hey, I‘ve got to get more earnings here.’”

Home health care jobs have not only reached pre-pandemic levels, but even increased by about 0.7% since February of 2020, according to nonprofit research and consulting firm Altarum.

Even if the number of workers taking on more shifts or returning to the labor force altogether is relatively small, it’ll mean more business for home-based care agencies, and thus, less pressure on the health system overall and better care for seniors.

It could also reduce the costly contract labor that home health agencies have largely had to rely on, especially during the Omicron spike, which put more caregivers out on quarantine than any other previous phase of the COVID-19 pandemic.

Travel nursing phase out

Travel nursing has been a staple in health care during the public health emergency, and sometimes been a hindrance to certain providers that couldn’t match the pay for it.

The Dallas-based AMN Healthcare Services Inc. (NYSE: AMN), one of the largest staffing companies in the country, highlighted just how much travel nursing has taken a hold on the health care industry on its recent earnings call. 

“Our travel nurse business grew revenue 95% over prior year and 27% sequentially,” AMN Healthcare CFO Jeff Knudson said on the call. “Travelers on assignment grew 42% year-over-year. Demand for travel nurses hit a record high level in January. As a result, travel nurse volume grew 20% sequentially.”

But that is not likely to last in the long term.

As government funds to hospitals for COVID-19 relief dry up, and as hospitalization rates for the virus stabilize, the need for traveling nurses will also decrease.

“The offset to that would be some lower volume in the second quarter for our crisis placements,” Landry Seedig, group president and COO at AMN Healthcare, also said on the call. “So, of course, the first quarter saw quite a bit of that. And those are not continuing into the second quarter.”

The travel nurse decline is evident for other companies that help staff home-based care agencies.

But the major caveat when it comes to being part of the solution to filling needs for home-based care agencies is the pay disparity, Matthew Mawby, the co-founder of the full-service health care staffing company StaffHealth, told HHCN.

“The real big kicker is the pay,” Mawby said. “I think the average median salary for a home health care worker is right around $14 an hour. And then some of these health care workers are getting $20 or more working at facilities. It is even more for travel nurses.”

Pay of course matters – and it especially matters during a time where inflation is hitting 40-year highs.

Aveanna Healthcare Holdings Inc. (Nasdaq: AVAH) even mentioned on a recent earnings call that, unfortunately, pay was becoming the no.1 priority for caregivers – even over mission – due to inflation.

But a contrasting view is that if the pay is reasonable enough, home-based care workers may be looking to find permanent homes.

As they do so, providers such as VNHS are trying to position themselves to be a place where people want to work.

“I think we’re getting smarter on what our message is, too, because people are tired and we want to be the employer of choice,” Davis said. “That resonates for traveling nurses that have been working in the ICU – and getting six figures for it – but are exhausted. It’s enticing to see an end to it all, and to have an employer really want to be a place that becomes a home for them – a real career home for them.”

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