Employee hiring practices: For providers, 'it's not the economy, stupid,' it's the industry

YARMOUTH, Maine - Whether providers are hiring or firing, it's clear that reimbursement pressures and industry regulations factor heavily into personnel decisions.

In the June HME NewsPoll, 42% of respondents said they had increased the number of employees they have  hired in the past year; three quarters said they had hired five or less; 27% hired from 6 to 10 employees; and 31% had hired 11 or more.

"The more clients we admit, the more people I need to serve them," said Patricio Garza, owner of Key Med in Edinburg, Texas. "We also need people to stay on top of our accreditation compliance and to audit patient charts."

Indeed, the changing industry landscape has created a Catch-22 for many providers.

"Reduction in reimbursement has created the need for us to decrease fixed costs," said Paul Reses, co-owner of Lincoln Medical Supply, in Pleasantville, N.J. "But the increase in documentation requirements makes that an impossible task."

In response to the unfavorable (reduced reimbursement), and the unknown (competitive biding), providers are trying to move away from Medicare.

"We've tried to look at where we could diversify and grow," said Missy Kaylor, office manager/owner of WellCare Pharmacy & Home Infusion in Shreveport, La. "We're recently hired a pharmacy tech to help us with that and have plans to hire another part time biller within the month."

Other providers are taking a wait-and-see approach.

"We were planning on a slight increase (in staff) and working toward an expansion, but there is too much uncertainty in both healthcare and the overall economy," said Lori Sears, owner of Active Home Medical Supply in Lapeer, Mich. "I think after the next election the dust will begin to settle so we can make a plan."

With national unemployment rates still hovering near 10%, according the Bureau of Labor Statistics, providers refuse to waste precious time or money on subpar hires, they say.

"They must be computer literate and must be qualified for a particular position," said Jim Clark, president of Clark Respiratory Supply, who has a 90-day probation period for new hires. "Troublemakers, people who do not show up on time, and clock watchers are terminated quickly."

While the national recession has led to a downturn in business across a wide swath of industries, for HME providers the main problem is not that they have less business. The problem, they say, is that they are getting paid less to do more.

Nearly a third of poll respondents said they have reduced staff, with the majority, 81%, saying they laid off five or fewer employees.

"We have laid off one employee and are looking at laying off one more," said Fred Jackson, president of Salida Medical in Salida, Col. "In-network contracts and state Medicaid reimbursement simply pay less than what it takes to provide service."

It's not a decision any boss takes lightly.

Ron Zepp, manager of HealthStat 02 in Largo, Fla., laid off two employees.

"One was with us for seven-plus years, the other for three-plus years," he said. "They were like family."