Aveanna CEO Tony Strange offered a brutal assessment of the home health and hospice hiring environment Thursday, telling Wall Street analysts that caregivers are now more concerned about wages than company culture.
“Two years ago I thought mission was equally important. I think nurses migrated to the places where they felt connected to a mission,” Strange told analysts during an earnings call. “However, with this new inflation trend we have, I think mission has taken more of a backseat and folks are chasing wages. Until we can be in the same place with wages as hospitals, surgery centers and skilled nursing facilities, I think we are going to be operating at a disadvantage.”
Like some of its competitors, Aveanna reported a disappointing first quarter on Wednesday due to rising labor costs complicated by the COVID-19 pandemic. The company reported $0.04 adjusted per-share earnings on profits of $25.3 million for the quarter compared to $0.08 per-share earnings on profits of $5.8 million during the same period a year ago. The firm estimated it lost approximately $15 million in revenues for the quarter because of staff quarantines due to the pandemic.
Atlanta-based Aveanna offers a suite of services, including home health, hospice and private duty care. While Strange said staffing has returned to near pre-pandemic levels, the company is struggling to recruit and retain staff in an increasingly competitive marketplace.
Chief Operating Officer Jeff Shaner told analysts during the call the company is having better luck recruiting workers in states where Medicaid reimbursement rates have improved. He said the company is also actively discussing the staffing crisis with private payers, including Medicare Advantage plans, as it negotiates better rates.
“We continue to have very positive rate discussions with our payors and our legislatures, but we are held to the times that they make their decisions and they make their decisions through their annual budgeting process,” Shaner explained.
Both executives anticipate more states will increase Medicaid reimbursement rates in their 2023 fiscal year budgets because they believe states better understand the importance of home-based care. Strange applauded Arizona for passing its Arizona’s Family Licensed Health Aide Program last year. That program lets home care and home health providers train family members to care for loved ones at home for pay. Strange said that kind of innovative thinking should be replicated in other states.
“The overall thesis is that home care is a value added in the equation and additional resources are needed to expand access to care,” Strange said.
