It recently became 15% harder to access hospice care. This stems from a combination of Medicare compensation policies and the labor market. What are the challenges? Does the visible horizon hold hope or threats?

It’s Now Harder to Find a Hospice that Will Take Your Family Member

In April, CarePort released a study showing that hospital discharge planners had to call 15% more hospice agencies per patient to place a referral, in year-over-year comparison. This difficulty proves indicative of a larger trend of care becoming more difficult to access. In that same study, hospital discharge planners needed to call 32% more skilled nursing facilities per person and 42% more home health agencies per patient to find a provider. Staffing challenges and the disproportionate compensation between provider types are to blame.

Hospice Faces a Nursing Shortage

Like many employers, hospice agencies are struggling to find staff, but the problems in post-acute and home healthcare are somewhat different than with the general labor market. Hospice agencies must hire from a given pool of people with the right degrees and credentials, especially nurses. On-the-job training is not an option. The median baby boomer has reached retirement age. Resultantly, demand for healthcare, especially healthcare at home, is at an all-time high and growing. Unfortunately, experts have warned for years that we would not have enough nurses to meet the demand. We did not prepare adequately. America is in a nursing shortage. Consequently, nurses are seeing rapidly climbing wages.  

Hospice Faces a Trend of Increasing Employee Turnover

Understaffed workplaces leads to burnout. Well publicized climbing wages encourage job searches. It should come as no surprise that employee turnover in hospice is on the rise. The 2022 report from BerryDunn finds that nurse turnover rates increased 28% from 2016 to 2020 (14.6% to 18.7%). One out of five hospice agencies experience a nurse turnover rate exceeding 30%. From 2019 to 2021, more than six out of ten hospice nurses changed jobs!

In palliative care and nursing professions, high staff turnover is associated with lower family satisfaction and generally lower quality of care. Increased staff attrition leads to a reduction in clinician expertise, intellectual capital, and a weakening of organizational culture. Additionally, the situation puts significant financial strain on hospice agencies. The cost of a nurse switching jobs reaches $88,000 per nurse. This cost stems from productivity loss, recruitment, screening, training, and other factors. In the recent BerryDunn survey, hospice agencies reported that a nurse had to be on the job more than six weeks to reach full productivity. Six weeks is not the number. The survey had 6+ weeks as the longest option, and 73% of respondents checked it. It is likely that the actual time to reach full, new-nurse productivity is a good deal higher than six weeks.

What Are the Barriers to Hospice Agencies Building Their Staff of Nurses?

The BerryDunn survey asked hospice agencies. When it comes to recruiting new nurses, the most common barrier cited was compensation being higher at hospitals and clinics. The second and third most common answers were other types of healthcare providers paying more and other providers offering better benefits. The most common answer that did not involve the financial disparities was a misconception of hospice among nurses.

The challenge in hospice is that they cannot simply raise prices to meet labor-market demands. The vast majority of people who need hospice are covered by Medicare. Medicare sets the price. It’s a take-it-or-leave-it offer. However, when Medicare pays other providers in a way that leads to greater nurse compensation, Medicare makes the decision about which providers will be better able to hire and retain nurses. It’s not up to the hospice agencies.

What Do Hospice Nurses Make?

This is not to say that hospice nurses are poorly compensated. Zip Recruiter shows hospice nurses making 186% to 240% of the median per capita income for their respective territories. BerryDunn finds that the majority of full-time hospice employees get health insurance, more than four weeks paid time off, dental, flexible work schedules, and retirement. But it’s still not enough to attract and retain nurses at a rate that would maintain past levels of hospice availability to your family.

What Does the Future Hold?

The number of licensed nurses increased 6.7% in 2019. At the baccalaureate level, enrollment in nursing programs increased by 5.6% in 2020. That being said, nursing schools are turning away 2/3 of applicants, due largely to the fact that they simply don’t have the capacity. They are turning away high school graduates with 3.5 GPAs. America graduates about 160,000 nurses per year. Nevertheless, The American Association of Colleges of Nursing suggests this may not be enough given that today’s nurses average 50 years of age, and a great nursing retirement may be looming. We may be in for a rocky road in America’s healthcare availability and quality of care.