Wages, Caregiver Shortages Top List of Home Health Threats

Private duty home care providers are more concerned about caregiver shortages and wage pressures than ever before, according to a recent study. For the first time, wage pressures are being named as one of the top three threats of the home care industry, Home Care Pulse’s 2016 Benchmarking Study found.

Caregiver shortages remained the top industry threat for 2016, with 70% of respondents stating it was one of their top three concerns, according to the study. However, home care providers are more concerned about caregiver shortages than the previous two years. In 2015, 62.8% of participants said it was a top threat, and less than 50% said the same in 2014.

Caregiver turnover was also named as a threat, with 22.4% of participants naming it in their top three concerns. The response is similar to 2015, when 22.1% said this was a top concern, compared to 13.4% in 2014.

A new threat this year that participants listed was rising minimum wage rates, as the fight for a $15 minimum wage has gained significant momentum. While only a handful of states have enacted a $15 minimum wage, including California, Illinois and New York, more are slated to consider the limit and numerous cities have acted on the initiative, including Seattle.

More than a quarter—26.6% of participants—said increasing minimum wages was a top threat for the industry. This response wasn’t even measured the previous two years.

Following the Labor Department’s ruling that home care workers were eligible for minimum wage and overtime benefits last year,  home care providers have struggled to maintain profits with higher wage costs weighing more heavily on the bottom line. The Healthcare Association of New York (HANY) estimated the cost of a $15 minimum hourly wage to home care agencies would reach $1.7 billion annually.

While wages have some impact on caregiver turnover, the report also found that orientation and ongoing training hours make a difference. The median caregiver turnover rate for those providing more than five hours of orientation training was 61.1% in 2015, compared to 77.3% for those that provided less than five orientation training hours. Similarly, the median caregiver turnover rate for those providing more than eight hours of ongoing training was 63.8% in 2015, while those providing less than eight hours had a median turnover rate of 68.4%

The Affordable Care Act (ACA) and attracting referrals were also named as top concerns for the year.

Written by Amy Baxter

Photo Credit: “Raise the Minimum Wage” by Paul SablemanCC BY 2.0