The following is a guest article by Lee Hudson Teslik, Founder & CEO and Scott Erwin, Dynamic Staffing Expert at Reverence.
In the coming decade, all 76M baby boomers will join the elderly population. And, naturally, such a significant generation will demand significant care as they age—with a resounding preference for support in the comfort of their own homes. Indeed, 90% of adults 65+ say they would prefer to age in place.
But will high-quality in-home care be an option? Sadly, unless the industry’s economic model changes, all but the wealthiest Americans could find this type of support out of reach. A combination of severe staffing challenges, rising costs, and tightening reimbursement spell a perfect storm for the industry.
Despite the challenging moment, we see cause for optimism, on multiple fronts. First, “value-based” payment models, which better align the incentives of providers, payers, and patients, are already showing promise opening up new forms of reimbursement. And simultaneously, technology supporting advanced scheduling practices and more effective care models is making value-based care in the home more feasible than ever before – helping agencies drive more impact while also shoring up costs.
Our goal in this essay is presenting a roadmap for evolving operational best practices that make this evolution both possible and highly profitable.
* * *
First, let’s understand the magnitude of the challenge.
To meet the coming wave of demand, provider groups will need to fill 8.2 million job openings for care aides alone – let alone nurses, physical therapists, and other clinical practitioners. Meanwhile, demand for lower-cost labor from elsewhere in the economy – the likes of Amazon and Wal-Mart in particular – has created an active drag on the industry’s pre-existing workforce.
“The healthcare industry is understaffed and my colleagues and I are sick of it,” said Michael Bradford, in-home care aide based in Spokane, Washington, who has worked in the industry for just shy of 10 years.
And Bradford isn’t alone in this sentiment. Industry-wide, reported turnover rates sit at 64%, a figure that likely understates due to measurement challenges. This dynamic leaves the industry with a herculean task. Without a stable workforce, those seeking in-home care will not be able to access it. Already, home care agencies report turning down 50% of potential patients due to lack of available staffing – and the wave of demand is still in its early stages.
Meanwhile, even as agencies face greater pressures than ever in securing practitioners, both their revenues and their cost structures have been actively squeezed. On the revenue side, the Centers for Medicare & Medicaid Services (CMS) have indicated plans to cut reimbursements for home-based healthcare services by 4.2% in 2023, a move the president of one major industry group said puts “the stability of home health care…at risk.” And on the cost side, inflation across a variety of dimensions – including, importantly, gasoline and transport – has emerged as a meaningful drag on industry profits.
* * *
So where’s the silver lining?
Despite the gravity of the industry’s challenges, there are actually several reasons for cautious optimism, as well as tactics innovative provider groups can utilize to secure their business models.
The first is value-based care models emerging into the mainstream. More squarely aligning incentives of provider groups, health plans, and families is a critical step in stabilizing the industry. Doing so will lead to more financially sustainable operating models – as well as more consistent care quality. Many of the nation’s larger provider groups, and a handful of enterprising, venture-backed startups, have shown promise over the past decade with value-based experiments. Now is the time for a broader set of provider groups to start building value-based reimbursement into their strategies.
Our perspective is that carefully defining care model objectives, and then deploying a combination of technology and human-centric operating models that support those objectives, will be necessary – driving consistency of quality across a fragmented industry, and ensuring that the right practitioners are deployed at the right time, and always at the “top of their license”.
The right value-based care models will, in turn, demonstrate more value – and enable higher reimbursement rates for practitioners, creating a virtuous cycle with patient wellbeing and care sustainability at its core.
Secondly, in navigating this course, the industry has a secret weapon – albeit one that requires ongoing care and attention.
The home-health and home-care industries are blessed with a uniquely mission-driven and motivated workforce. “Personally for me, I stay because of my patient Tom,” says Brandford, who is one example. “He keeps me here. I have worked in a nursing home facility before and I personally understand how hard it is to make that transition. I don’t want to see that happen to Tom, or any of my future clients. I feel a sense of accomplishment being able to keep my patients out of the hospital and away from full-time care facilities.”
Much more can be done to harness this passion and goodwill while making home caregiving more operationally palatable from the practitioner perspective. Paid caregiver work will always be taxing, physically and emotionally, but it need not be nearly as operationally hectic and stressful as it currently is.
At Reverence, we believe one of the biggest opportunities to improve practitioner retention, and ultimately staffing dynamics, lies in giving workers what they want: flexibility.
Now more than ever, employees want greater control of when and where they work––and home care is no exception. Caregivers are regularly overscheduled—especially since the pandemic. And the current scheduling process is rife with inefficiencies and frustrations for everyone involved: care aides themselves, provider groups struggling with the challenges posed by dropped shifts and high outsourcing costs, and families working hard to support loved ones. Creating a more streamlined process for shift management is a critical first step to solving the staffing crisis. And tapping technology is key.
As a starting point, AI-powered dynamic scheduling solutions, like the one we developed at Reverence, hold the power to automatically fill shifts, without human intervention, and to do so in ways that feel better for practitioners and families alike. Dynamic scheduling engines take into account thousands of data points typically juggled in a scheduling manager’s head — including caregiver background, language, expertise, and reliability ratings. They also factor a key data point all too often ignored: practitioner preferences. And giving practitioners a more consistent voice in when, where and with whom they work is a major first step in driving retention.
For all these reasons – and particularly because we see, first hand, the required innovations working in the market – we remain optimistic in the face of the current challenge. Adjusting to an acute staffing crisis and increasing financial sustainability will not happen overnight, but the tactics and technologies required to make change already exist – and failing to adjust won’t be an option, given the human impact at stake and the magnitude of market demand.
