Palliative care providers, like much of the healthcare community, have turned to contract staffing services to supplement their workforce during the pandemic. Hospices have said they intend to reduce this trend as infection rates drop, but evidence suggests contract labor use is unlikely to return to pre-pandemic levels . Hospices may continue to find themselves competing with staffing departments for new hires.

Hospice operators have relied on contract nursing to stay afloat during a time of worsening workforce pressures, high turnover and growing demand for care. A key factor has also been the virus itself, as COVID infections and exposures have pushed full-time staff into quarantine.

Although staffing services enabled providers to maintain continuity of care, labor costs increased significantly as a result.

“When you have more than 3% or 4% of your entire frontline workforce in quarantine, you now have to supplement that with contract labor and with sources of labor. ‘much more expensive work’, LHC Group (NASDAQ: LHCG) Chairman Joshua Proffitt at the Bank of America Securities Virtual Home Care Conference.

Proffitt said the company would save $1.4 million per quarter for every 100 basis points it can reduce its reliance on contract nurse labor, and that reducing reliance with respect to contract labor would be a priority in 2022.

Other vendors are also feeling the sting.

Home health and palliative care giant Amedisys (NASDAQ: AMED) saw palliative care revenue in the third quarter of 2021 drop by $2 million, which the company largely attributed in part to higher utilization than the normal for contract nurses, the company said in an earnings call. Hospice segment revenue in the third quarter totaled $198 million.

Amid rising costs, some players in the healthcare industry, as well as some lawmakers, have accused recruitment services of price gouging. This view is not universal, however, with some executives noting it as the simple result of rising demand versus falling supply.

Staffing Services has seen a steady stream of increased customer base over the past two years, especially among well-capitalized national companies like LHC Group and Amedisys. This includes the staffing services business operated by Interim HealthCare, a subsidiary of Caring Brands International, according to Bobby Conlon, the company’s senior national personnel manager.

“We have seen a sustained increase in our personal side of the business since the pandemic began,” Conlon told Hospice News. “Early on, we sent additional staff to hospital systems and nursing homes experiencing outbreaks that were under-resourced, and more recently we have assisted with the administration of the COVID-19 vaccine by tapping into our network. nationally to reach more communities.

A number of palliative care companies have signaled that they intend to recall contract nursing services as recent surges caused by the variants begin to recede, as new infections are already trending down, according to the US Centers for Disease Control & Infection (CDC). The CDC reported that the 7-day rolling average of daily new cases through Feb. 9 fell 42.8% from the previous week.

But even as contract nursing declines, demand is returning to pre-2020 use, industry watchers say.

“The fundamental drivers of demand for nurses that existed even before COVID (i.e. the demographics of the nursing population) have been boosted by the lingering effects of the pandemic on the profession and are likely to drive the demand for temporary staff after 2022 and keep billing rates significantly high. versus pre-COVID going forward,” Brian Tanquilut, equity analyst for Jeffries Financial Group, said in a Feb. 8 research report.

This means that hospices can not only continue to use these services, but continue to compete with them in the labor market. A prospect that can prove difficult as recruitment companies in many cases offer nurses higher pay and more flexible hours than many full-time healthcare employers.

Travel and local contract nurses have seen their pay rates double and sometimes triple pre-pandemic amounts, according to Conlon, due to growing demand and the higher workplace risks they face due to the pandemic. COVID.

Similarly, schedule flexibility and improved work/life balance are becoming increasingly crucial for recruitment and retention in the palliative care industry, in which 62% of clinicians said they had suffered from burnout even before the pandemic.

Many hospices have reassessed their employee policies over the past two years to give workers more opportunities to avoid burnout and remain effective in their jobs. But it also comes with its own set of costs, including increased spending on paid vacation and time off, as well as the need to ensure patient care doesn’t fall behind while employees are absent.

“One of the biggest draws of working for a staffing agency is the ability for individuals to set their own hours and schedules,” Conlon said. “This has become particularly important over the past two years, when family obligations such as childcare and distance learning have become priorities for many people.”