As More Hospices Close Their Doors, Staffing Strains Are Becoming Crystalized

Staffing issues have increasingly been at the root of leading causes behind shuttered hospice programs nationwide.

Demographics are pushing up demand for end-of-life care amid long-standing staffing shortages in hospice. Some hospices have been unable to sufficiently fill their ranks to keep up with that demand for care, resulting in them either temporarily limiting new patients or completely ending services.

Hospices have also cited high staffing and care delivery costs such as rising travel expenses and compensation packages as leading reasons for closures.

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Financial and operational labor pressures challenge the ability for hospices of all walks to survive and thrive, with other concerns on the horizon as well, according to VITAS Healthcare COO and Executive Vice President Joel Wherley.

“All of us are facing the fact that we have now had to significantly increase labor expenses just to survive in today’s world, and we’re recognizing where we need to go in the future,” Wherley told Hospice News at the ELEVATE conference in Chicago. “That’s of extreme concern about where we ultimately end up in the next couple of years – to be able to move hospice forward and get a sustainable transitional care service put in place, while still recognizing the overall value of the hospice benefit.”

Like many providers, the Chemed Corporation (NYSE: CHE) subsidiary has felt the financial sting of staffing headwinds.

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The company recently reported positive momentum towards improvement on its number of workers, in part due to one-time hiring and retention bonuses it instituted earlier this year. Payments to employees ranged from $2,000 to $15,000. The program was largely financed through Provider Relief Fund dollars VITAS received.

Joel Wherley RoboToaster, SmugMug
Joel Wherley at the 2022 ELEVATE Conference.

Pricing pressures in the labor environment are bearing weight on hospice sustainability in a competitive wage market, according to Dexter Braff, president of M&A advisory firm The Braff Group.

Case in point: Hospitals and large health care systems are swallowing up the shallow pool of workers, with the ability to offer higher compensation. Some hospices have lost staff to these competitors poaching their employees with the lure of higher wages, more extensive benefit packages and larger sign-on bonuses.

Lagging reimbursement rates amid wage hikes, inflation surges and steep compensation competition have put hospice between a rock and hard place in the staffing battle.

The U.S. Centers for Medicare & Medicaid Services (CMS) recently proposed a 2.7% pay increase for hospice care for Fiscal Year 2023. But some industry stakeholders and providers have indicated that amount may be a drop in the bucket of what’s needed to support hospice workers.

The pandemic only exacerbated staffing shortages as health care workers left the field in record high numbers, citing burnout, high stress levels and lagging wages in a recent report from the Peterson-Kaiser Family Foundation Health System Tracker.

Staffing shortages amid COVID-19’s continued spread in part led Pennsylvania-based Crozer Health to temporarily halt inpatient services at its unit in Taylor Hospital earlier this year. The move sparked community outrage amid rising demand for end-of-life care in the area.

Alaska-based Hospice & Home Care of Juneau (HHCJ) recently halted services, citing high staffing costs and a lack of clinicians. Operated by Catholic Community Services, HHCJ had two hospice and 17 home health patients on its services when it closed on Oct. 19.

Staffing issues were a linchpin that locked in the University of Vermont (UVM) Health Network Home Health & Hospice’s decision to temporarily stop services effective Nov. 4. The hospice provider offered caregiving services to residents with mobile impairments at South Burlington Community Housing. The senior housing community offers 10 one-bedroom apartments, and it is owned and operated by Cathedral Square. Its residents are typically low-income patients.

A lacking workforce to provide care caused an Iowa hospice hospice to close last year. “Hospice” was the only organization with an inpatient facility across the two counties it served near the Missouri border, leaving patients in the area with limited access to this care.

These are just a few of other providers who have either temporarily or permanently closed their hospice programs in response to labor pressures during recent years.

At this rate, access to hospice services may be threatened if this trend continues.

Staffing shortages are not anticipated to abate anytime soon, making things in the hospice market “very unpredictable,” for providers and patients alike, according to Braff.

“Staffing has a remarkable impact on providers in the health care industry. There’s quite a bit of quandary as it relates to staffing,” Braff told Hospice News during ELEVATE. “Prior to the pandemic, the gap between open positions and new hires prior to the pandemic was about 500,000. At the peak of COVID that went up to 1.3 million. We’re not past the crisis.”

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