The Home Health Nursing Problem That Isn’t Going Away

The home-based care staffing environment will always be a challenge for providers, but things look far better now than they did two years ago in the wake of the pandemic. However, one area that remains a lingering problem for providers is nurses, and specifically nurses who are leveraging a worker shortage to maximize earning power. 

A confluence of factors made recruiting and retaining home-based care workers from 2020 to the beginning of 2023 a major headache.

Increased government aid kept a large amount of workers on the sidelines, for extended periods of time. Meanwhile, many clinical professionals either retired or exited the industry after being burnt out by pandemic-related pressure.

Most of that has abated, but home health providers have told me that one issue definitively remains, and that’s bringing on – and hanging onto – nurses.

“If I had 200 nurses show up in my parking lot, I would hire them all without interviewing them,” Bill English, president and CEO of Accurate Home Care, told me in jest at the Continuum conference last year.

English’s joke was layered with some truth, however. Home health providers are desperate for nurses, and affordable ones. Without them, it’s tough to grow – or in some cases, to even survive.

In May of 2023, Adam Holton – then the chief people officer at Amedisys (Nasdaq: AMED) – told me that nurses jumping ship to collect sign-on bonuses was one of the company’s gravest concerns.

He and many other leaders hoped that particular issue would subside as the public health emergency was put further into the rearview, but recent conversations I’ve had suggest that it hasn’t.

In this week’s exclusive, members-only HHCN+ Update, I take a closer look at one of the most pressing issues facing the home health industry, which is a widespread inability to sustainably hang onto a vital workforce.

Home health care’s nursing problem

In May 2023, when I chatted with Holton, Amedisys had some of the best data on home-based care workers in the industry. Its applicant tracking system, specifically, was one of the company tools he was touting.

And that’s also why he was so sure of this problem with home health nurses, or nurses in general.

“When there’s a severe shortage, you expect some of this,” Holton said. “But there’s ample evidence that there is still a contingent of nurses who are really taking advantage of going from one sign-on bonus to another.”

Jeff Knapp, the chief people officer at Bayada, was also a part of that conversation. He agreed, and called Bayada’s nursing woes not a sourcing issue, but a retention issue.

For certain, there are ways to keep the less financially inclined nurses onboard. Those include good company culture, solid training, proper recognition, bonuses and, in general, competitive compensation.

But the average home health provider doesn’t have time to waste and money to blow. And when they are hiring nurses who then turn around and leave in short order, that amounts to a significant financial loss. The recruiting and training costs add up, with little return on investment.

In April 2022, an analysis in Health Affairs showed that the total supply of registered nurses decreased by more than 100,000 from 2020 to 2021, which was the largest decrease in supply in the last 40 years.

Another analysis, published by the Health Resources and Services Administration in November 2022, projected a U.S. shortage of close to 80,000 nurses in 2025, a problem that’s expected to continue – and even exacerbate – throughout the decade.

Specifically within home health care, a study published in the National Library of Medicine in 2021 found over 30% of full-time registered nurses and about 25% of licensed practical nurses left their position in a large home health care agency “over the course of a year.”

To make matters worse, health systems – which compete with home health agencies for nurses – often have more financial resources. At the same time, skilled nursing facilities (SNFs) are soon to be subject to a minimum staffing mandate, which could also increase competition over a small pool of nurses.

And the issue Holton brought to my attention nearly a year and a half ago hasn’t gone away.

For instance, in Care Advantage’s case, nurses are actually declining sign-on bonuses that may tie them to the company for a longer period of time. They’re doing that, in many cases, so they can eventually jump ship for other offers.

“All the big companies are paying high retention bonuses and sign-on bonuses,” Joe Navarro, the chief people officer at Care Advantage, told me this week during Home Health Care News’ Staffing Summit. “It’s to the point that, when I’m interviewing and hiring nurses, when I offer a sign-on bonus, they say they don’t need one. Because they want to be able to jump three months from now, four months from now, for better compensation.”

For large home health providers, that’s an issue. For smaller providers, it’s hard to even enter the competition.

Care Advantage has a large regional presence. Still, nurses jumping ship has become one of its biggest challenges.

“It’s very hard to attract and retain nurses at this point,” Navarro said. “And I think that’s one of the biggest challenges that there is in the industry.”

A costly turnover problem is also magnified in light of the current payment environment in home health care.

It costs far more now to hire and retain a nurse, but all the while, the Centers for Medicare & Medicaid Services (CMS) is reducing home health payment. The agency has cut core payments the past two years, and proposed a third straight cut for 2025.

On the other side of payment, Medicare Advantage (MA) plans are often paying rates for home health care that fall below the cost of care.

Navarro suggested one solution, which was to ensure nurses fall in love with the company culture shortly after joining.

Home health providers could also employ strategies to get a better sense of which nurses are more likely to stay for the long haul.

Having a nurse on staff is better than not having him or her on staff. But if that nurse is set to leave fewer than 90 days in, the economics on that hire could turn upside down.