With a 2% Medicare payment sequestration looming over hospice since 2013, news of a much needed raise comes with a sigh of relief. In a move that would repeat the 2021 suspension of hospice sequestration, Medicare recently proposed a 2.7% pay increase for hospice in 2023. Why can you not hear the jubilation in the streets? Unfortunately, many fear the raise will not be enough to preserve hospice as we have come to know it.
Hospice Raise Does Not Keep Up with Cost of Living
Every year, the Social Security Administration calculates COLA – the rise or fall in cost of living known as the cost of living adjustment. The 5.9% COLA increase in 2022 was the biggest annual increase in almost four decades! Hold your hats, though. The projections for 2023 COLA put the increase at 7.6%. Now, compare this to Medicare’s raises for hospice. For 2022, Medicare gave hospice a 2% raise – 34% of COLA. For 2023, Medicare’s recently proposed 2.7% raise for hospice again only amounts to 36% of COLA projections.
Hospice Staffing Demands Exceed COLA
While COLA serves as a standard benchmark for increasing costs and raises, it does not tell the whole story for demands on hospice lately. With the current pandemic causing healthcare labor shortages that are compounded by a general nursing shortage, hospice agencies in every corner of the nation have increasingly experienced unprecedented staffing challenges. Generally, lower reimbursement has always positioned hospice to pay nurses less than facilities receiving higher reimbursement. However, the nursing shortage has galvanized the nursing industry into more job hunting, moonlighting, and moving around. In the past two years, more than six out of ten hospice nurses have changed jobs. At present, a little more than one in four hospice nurses stay on the same job five years or longer.
How Might Underfunding and Staffing Challenges Affect America’s Experience of Hospice?
In palliative care and nursing professions, high staff turnover is associated with lower family satisfaction and generally lower quality of care.1,2 Increased staff attrition leads to a reduction in clinician expertise, intellectual capital, and a weakening of organizational culture.4 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.
Patient Choice and Ability to Meet Demand
Patient choice and the hospice industry’s ability to meet rising demand without affecting quality face strain. At the beginning of sequestration, the number of hospice agencies in the U.S. declined dramatically, 29% in just one year. Since then, from 2014 to 2019, the number of hospice agencies steadily climbed to within 16% of the 2013 high of 5,800 agencies nationwide. Meanwhile, America has aged and the preference for dying at home has been honored more now than at any time since at least 1970. Fewer hospice agencies are fielding higher demand during times of increasing staff turnover.
- Natan MB, Matthews P, Lowenstein A. Study of factors that affect abuse of older people in nursing homes. Nursing Management. 2010 Dec 8;17(8).
- Tilden VP, Thompson SA, Gajewski BJ, Bott MJ. End-of-life care in nursing homes: the high cost of staff turnover. Nursing Economics. 2012 May 1;30(3):163.
- Kirby EG. Patient centered care and turnover in hospice care organizations. Journal of Health and Human Services Administration. 2018 Jul 1;41(1):26-51.