Home care industry sees higher customer growth rate and lower caregiver growth rate


The home care industry is changing. Its role in the overall health care system is growing, but the question is whether home care providers are doing enough to keep up with this growth.

This is reflected in the contrast between the growth of clients and caregivers. This is reflected in the urgency to enter value-based models, despite few agencies tracking the data.

It’s also clear that while there are certainly clear industry trends that are telling, there are differences between each agency’s place in the space – and a difference in how each gets from the point A to point B.

All of this is summarized in the 2021 comparative study recently published by Home Care Pulse.

Home Care Pulse is an Idaho-based research and education company that reports on changing workforce and finances, marketing strategies, and other trends in the care industry non-medical home.

This year, the company’s benchmarking study included nearly 1,500 participating agencies.

Value and data

The home care industry is becoming increasingly self-aware. He realizes the value he can bring and that others — including healthcare systems, hospital-at-home programs and private equity investors — are also noticing.

But while vendors are eager to seize these opportunities, some of their value is still undemonstrable, primarily due to lack of tracking data.

Only 21.8% of agencies, for example, tracked readmission rates in 2021 – a critical data point to prove the value of home care. This number has actually decreased year on year.

“We just need to continuously work on improving the tracking of readmission rates, as this will keep us on the table in acute and post-acute spaces in the future,” said the president of Home Care Pulse, Todd Austin. Home Health Care News.

Source: Home Care Comparative Study

The next step will likely have to be with technology to make it happen, Austin noted. While tracking readmission rates can be a relatively simple process – some agencies use Microsoft Excel to do this – software capabilities are a safer way to get to the next level of data tracking.

“And I think a lot of that is about software usage,” Austin said. “And most major EMRs have this capability. So it’s probably more about training at this point.

home care staff

In 2018, caregiver turnover reached 81%. It was a staggering number that sounded alarm bells for everyone in the home care industry. By 2019, whether through supplier mitigation or labor trends beyond their control, it had been reduced to 64%.

It’s up about 1% in 2020, but after all the chaos COVID-19 has brought — including vaccine mandates — most of the industry assumed it would return to appallingly high numbers.

But that was not the case. In fact, it has remained practically stable – at 64% – in 2021.

Source: Home Care Comparative Study

“Revenue is relatively flat, and it’s flat no matter how we segment it,” Austin said. “Whether it was those who were doing $5 million in business, $4 million in business or whatever. It was flat, but you slice and dice it.

Given the environment, this looked like a win for the industry – the caveat being that this number can always improve and is still too high. Revenue, among other things, was also higher in the central US, but this tends to be in line with annual expectations.

But given each state’s different regulations and legislation as a result of COVID-19, some states are certainly doing better than others. Coastal states – namely New York – that funneled money into Home and Community Services (HCBS) – were starting to see benefits in terms of recruiting and retaining caregivers.

Regardless, when agencies were asked to name the three biggest threats to the industry, more than 80% consistently cited the shortage of caregivers as one – by far the highest number. Next is caregiver turnover, which nearly 40% of agencies cited as one of the top three threats.

“For 80% of the industry to say that the shortage of caregivers is the no. 1 threat and turnover being no. 2, I think we’re doing a good job with what we have,” Austin said. “And I think there are upsides in some specific regions, like New York, and the FMAP funding in particular, which has been shown to reduce revenue.”

These encouraging signs in states that have poured more money and support into HCBS are a reason to continue working with home care associations on lobbying efforts, Austin noted, but obviously that support isn’t helping. not necessarily providers that are primarily private.

For vendors not fortunate enough to be located in a state increasing industry funding, no single recruitment and retention strategy has consistently paid off.

“The question we’re always asked is if there’s a specific benefit that’s a silver bullet, and when you look at the combination of benefits offered in correlation to revenue, there’s no direct correlation,” Austin said. “With the exception of childcare and daycare services, which are [rarely offered].”

At the same time, orientation and training have helped agencies keep employees on board for longer periods.

“Initiatives around orientation training and career laddering are driving lower turnover, both in the 90-day period and annual turnover,” Austin said.

Source: Home Care Comparative Study

Purple (top) represents orientation training, while orange (bottom) represents “ongoing” training.

The way agencies find caregivers is also changing and, in turn, becoming more expensive. Hiring sites are increasingly popular – and no doubt help with hiring – but lead to more post-hire turnover and cost more than three times the amount it costs to hire a caregiver thanks to the word of mouth.

There is also evidence to suggest that the pool of carers could widen slightly this year as sidelined carers return to work.

Customer growth rate

While caregiver turnover has remained stable, client turnover has also increased. This metric hit a five-year high in 2021 at 76%, which is measured by Home Care Pulse by taking the total number of customers who have stopped services and dividing it by the average number of customers.

At the same time, more and more customers came into service. The customer growth rate increased for the first time in six years.

Source: Home Care Comparative Study

That alone is good news.

But what’s more interesting – and could be seen as good or bad – is that the rate of caregiver growth has simultaneously declined. In other words, more clients were coming into service, but fewer caregivers were joining home care agencies.

“We’re serving more clients and we’re doing it with fewer caregivers, which could make the problem worse, because one of the biggest complaints from caregivers is their schedule and the client-to-caregiver ratio,” Austin said. “So I think the important thing for industry agencies to continue to monitor is whether we’re trying to serve more customers than we have historically, while doing so with fewer caregivers.”

There are ways to supplement caregivers, for example. than telehealth. But in general, having an increase in client growth and a decrease in caregiver growth is probably an unfavorable and incongruous trend.

Pay for services and caregivers

Remuneration for caregivers increased in 2021, as expected.

Under pressure, many agencies have been forced to raise salaries to stay competitive. Government funding also certainly helped in some cases.

Below are only the 95th and 75th percentiles of earners, but this provides insight into how median salaries will increase in 2021.

Source: Home Care Comparative Study

At the same time, the cost of services has often increased. But so far, that hasn’t hurt many vendors across the country. Client growth has increased and, anecdotally, providers said people generally understand the increase in rates to account for higher caregiver salaries.

“In this upper class of agencies, they charge higher amounts, they increase their rates faster than the rest of the industry,” Austin said. “And it doesn’t affect their growth rate. From an income perspective, they are actually growing faster than those earning less than $5 million a year. So yes, we’re seeing the rates go up, and it’s not affecting our growth rate.


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