Doctor placing money in his pocket

Inflation is worsening the labor situation for home health agencies, according to a Home Health Labor Cost Survey released Tuesday. As a result, agencies are forced to deny more referrals and increase costs in the form of competitive compensation incentives to recruit and retain staff.

The Partnership for Quality Home Healthcare (PQHH) commissioned Dobson DaVanzo & Associates LLC to provide an update to the August 2021 home health wage trends. The new report served as an appendix to comments on the home health proposed rule from the National Association for Home Care & Hospice.

Six PQHH member organizations responded at least in part to the 2022 survey, and five industry leaders participated in the interviews. Responding members represented home health agencies in the vast majority of states and regions in the country.

Rising costs continue in the sector. Inflation in home health hourly wages increased from 4.8% in the second quarter of 2021 to 5.2% in the first quarter of 2022, according to the Bureau of Labor Statistics. Hospital wage inflation, which was 7.4% in the first quarter of 2022, will put additional pressure on home health, the report said.  

Hourly wages reached a three-year high of 6.5% in the fourth quarter of 2020. They totaled 5.2% in the first quarter of 2022, according to the Bureau of Labor Statistics. Credit: Dobson DaVanzo & Associates LLC

“These results suggest there will be upward pressures on home health industry labor wages in 2022, if not beyond, as hospitals and home health agencies compete for the same staff,” the report said.

The updated 2022 survey found clinician-specific inflation rates ranging from 3.8% for home health therapists to 5.1% for nurses in the first quarter of 2022. Wage inflation for clinical supervisors rose from 3.4% in the fourth quarter of 2021 to 4.5% in the first quarter of 2022. Certified nursing assistants and home health aides saw 4.2% growth year-over-year for the first quarter of 2022.

Inflation in home health positions ranged from 3.8% to 5.1% in the first quarter of 2022. Credit: Dobson DaVanzo & Associates LLC

Two factors are challenging home health agencies to meet increasing demand for services: insufficient supply of clinicians, and home health staff turnover from employer competition, the report said. Home health agencies had an average of 59% filled positions during the first quarter of 2022, the survey found. Reasons cited for exiting the industry included retirement, burnout, vaccine mandates and the risk of developing COVID-19. Fueling turnover within home health is recruiting efforts of facility-based providers, which can offer higher compensation, the report said.