Home health and hospice agencies are steadily paying higher labor costs to deliver quality care and retain skilled nursing staff as the COVID-19 pandemic heads into another year with ongoing labor shortages.
Figures from The SimiTree Financial Monitor, SimiTree’s industry-leading data analytics and benchmarking tool, show skilled nursing costs rose quarter over quarter throughout 2021, entering the fourth quarter of the year at a direct cost per visit averaging $6 higher than during the final quarter of 2020.
Labor costs for physical therapy also rose quarter over quarter, although not as significantly as for skilled nursing. SimiTree’s Financial Monitor indicates the direct cost per visit for physical therapy averaged $4 higher by the end of the third quarter of 2021 than during the final quarter of 2020.
SimiTree has not yet released its fourth quarter reports for 2021 to the public.
Higher salaries and benefits
Increasing labor costs throughout 2021 appear to be salary and benefit related rather than due to increasing numbers of visits, according to Brian Martin, SimiTree’s Vice-President of the Financial Monitor.
“If we measure productivity in the number of visits per day, it looks like productivity remained steady over the first three quarters of 2021,” Martin said. “That’s telling us the increase in skilled nursing costs last year occurred in salaries and benefits, and was most likely due to new hires at a higher rate of pay, hiring bonuses, paying staff to stay and other costs related to retention and recruiting measures.”