Is New York home healthcare a viable industry in 2022?
Home healthcare has never been an easy business, but it’s gotten more challenging than ever in the past two years. COVID, staffing shortages, and new government regulations are only some of the issues that agencies face.
It’s getting harder and harder to retain aides, stay compliant, and turn a profit.
So, is New York home healthcare viable? How do you run and grow a successful agency?
We posed the question to Pinny Faska, CEO of Rockaway Home Care (RHC). If anyone would know the answer, it’s Pinny.
He started working in RHC’s billing department twelve years ago. Now, he runs the company and has overseen tremendous growth in the past five years.
Pinny acknowledges the challenges that NY agencies face:
- Profit margins are slimmer – Expenses are going up, and payor reimbursements aren’t keeping pace. For example, beginning October 2022, the minimum wage for home healthcare workers is rising. But the state legislature passed the law without explaining how your organization would would fund that raise.
- Government oversight – Keeping up with the paperwork and changing regulations is a full-time job in and of itself. In the past year alone, the LHCSA RFO and the new Annual Compliance Statements have made huge waves in the industry. And the threat of audits, penalties, and criminal charges hangs over agencies’ heads.
- Recruitment and retention – Recruitment and retention isn’t a new challenge, but the Great Resignation has only made it worse. According to the 2022 HCP Benchmarking Report, 85% of home care providers surveyed had to turn down client cases due to a lack of staff.
Even with all the problems, the home healthcare business isn’t going away. Aging baby boomers now make up almost a quarter of the U.S. population. And post-COVID, seniors and their families want to stay out of nursing homes as long as possible.
Successful agencies learn to run leanly and efficiently. They monitor their spending, their billing, and the gaps between the two. They look for ways to cut costs.
Top agencies aren’t satisfied with the status quo. They grow by investing in online and print marketing. They create a social media presence. And they know the importance of cultivating positive reviews and neutralizing negative ones.
Profitable agencies fight employee churn with thoughtful onboarding, training, and engagement. They treat their talent as a resource, not a commodity.
Above all, the best agencies think creatively. “You need to be innovative,” says Pinny. “The old solutions and processes won’t necessarily work anymore.”
Pinny shared three practices he sees as secrets to RHC’s success.
1. Hire smart
Be smart about how and when you hire. Overstaffed offices used to be standard. Now, agencies realize they can be equally productive with less staff and more efficient, automated systems.
At RHC, they started outsourcing some administrative work in 2018. It took time to find a reliable company, but now there’s a considerable cost saving for RHC.
“When we first started, people were skeptical, but now everyone is more open to the concept of working out of the office,” says Pinny. “We found that the system was as successful as we made it. We treat the off-site team as regular staff, not as vendors. We’re in constant communication, calling each other if any problem comes up.”
2. Same-day pay
It’s no secret that many home healthcare aides live at or below the poverty line, barely making it from paycheck to paycheck. If a sudden expense comes due mid-month, they don’t have money put away to cover it. Aides may turn to family for loans, overdraw their accounts, or take out expensive payday loans.
“Two years ago, we started working with a ‘same day pay’ company,” Pinny says. “Our aides love it.”
Same-day pay is a relatively new idea that’s gaining traction, especially in industries with shift workers. Walmart, Dollar Tree, and Taco Bell, for example, are megacompanies that offer this benefit to their employees.
Employees download the same-day pay app to immediately access any money they’ve earned but not yet been paid. It allows them to cover bills without being bound to a bi-weekly payroll schedule.
From RHC’s perspective, the system is automated and seamless.
- Daily, RHC shares the files showing who worked how many hours.
- The same-day pay system then lays out any money that aides request.
- Once a month, RHC’s payroll company settles with the same-day pay company.
Aides join and stay with RHC for many reasons, but same-day pay is one of the big draws. “We brought this concept to the home healthcare world,” says Pinny. “It seemed groundbreaking at the time, but now other agencies do it, too.”
3. Diversified wage parity benefits
While giving wage parity benefits isn’t optional, companies can choose HOW they provide those benefits. And that choice can significantly impact how aides view your agency.
Allowable wage parity benefits include:
- Dependent care
- Medical and pharmacy
- Supplemental insurance
- Life insurance
Some agencies default to cash in lieu of benefits. It seems simpler, but a closer look shows that it costs you more money and is less beneficial to your aides.
Other agencies default to health benefits since they’re already worked into the system. But that may not be the best option for your aides if they qualify for Medicaid.
“Don’t force them to take health benefits,” says Pinny. “Not all aides want it! You have to get creative to give them what they want.”
“Our data shows that the most popular benefits are transit, cell phone, and health,” says Shaya Sternhill, Melody Benefits Head Of Business Development & Sales. “Melody offers your aides the entire list of allowable benefits so they can pick for themselves. If you can keep your aides happy, you can keep them on your team.”
Yes, it’s a tough business, but with the right strategies and mindset your can grow your agency. “Keep thinking, be creative, and set yourself apart,” says Pinny.
Wage parity benefits from Melody Benefits are here to help.