Boosting Wages Is Not The Only Answer To The Caregiver Crisis

Across the industry, home health agencies are struggling with high turnover rates among caregivers and dealing with rising labor costs. While boosting caregiver wages can aid in caregiver retention, it isn’t the only mechanism to deal with turnover, according to Caitlin Connolly, home care fair pay campaign coordinator at the National Employment Law Project.

Agencies must be willing to try new things to deal with the caregiver shortage and high turnover rates, and focus on advocating for better government support. All of these pieces need to work together to turn the caregiver crisis around, Connolly told Home Health Care News.

“It is helpful if agencies raise wages and look at other factors,” she said. “Agencies need to take a close look at turnover and how they are working with caregivers in a way that would want them to stay.”

Minimum Wage Is Not Enough

There’s no doubt about it—wage levels matter, and many industry advocates would argue that low wages are at the core of the caregiver crisis. With such low wages, fewer workers are less likely to stay in the field long term, Connolly said. High turnover rates are not only costly to home health agencies, but also impact care to patients.

Yet, providers that boost hourly wages may not be doing much to help caregivers live above the poverty line, Connolly explained.

“Depending on which state someone is working in, even if agencies are saying they are paying above minimum wage, it could still be a poverty wage,” she said. “In addition to paying workers above a poverty wage, it’s also about looking at making investments in our home care system.”

One way agencies may be able to give more value to caregiver pay is by providing more than just higher hourly wages, such as categorizing caregivers as full-time workers with W-2 status, rather than on a 1099 contract basis. Full-time workers may be eligible for other optional benefits and have more stability.

“It’s very hard to stay in this field as a caregiver because of the wages, but turnover plagues the entire industry,” she said. “It not only hurts the consumers, but also is extremely expensive for agencies. We know that it costs at least $2,500 per person who quits at an agency, and that’s old data. We need to look at benefits like giving caregivers access to consistent schedules, flexibility and continuing education, as well as consistent pay.”

New York-based home health care provider Alliance Homecare says they have not been affected by wage hikes throughout the country, such as minimum wage increasing to $15 per hour in some states.

This may be because Alliance is one of the few agencies that has always had their caregivers use W-2s instead of compensating them as contract workers, in addition to offering other benefits.

“We’ve always been a leader in pay when it comes to caregivers and haven’t been affected by wage increases, but we do understand there are huge implications for the industry,” Greg Solometo, co-founder and CEO of Alliance Homecare, told HHCN. “We believe we will see rising rates throughout the industry [due to wage increases] or agencies will be forced to go out of business.”

Alliance Homecare aims to provide more comprehensive benefits by offering workers continuing education workshops as well as perks, such as staff events and employee of the month recognition to show caregivers they are valued.

National Investment

In addition to agencies making drastic changes to keep turnover down by raising wages, changes on state and federal levels to support these efforts are necessary, said Connolly.

“We need to see increased investments in our long-term services and support structure,” she explained. “Public investments that help to allow people to stay at home are smart investments. That can mean expanding upon existing public programs to meet the needs of older adults because we still have people who fall above Medicaid eligibility for home care services but still cannot financially afford to pay for home care.”

Support from the government also could come in the form of continuing to oversee the industry to ensure caregivers are being protected from fraudulent activities, such as being paid under minimum wage.

Louisville-Based Almost Family (Nasdaq: AFAM), one of the nation’s largest home health care providers, is one example of a provider that is taking its struggle with caregiver turnover into its own hands by performing state-level advocacy.

“We are certainly concerned with wage compression in some states and we do have challenges, but have to scale to manage it better because of the size of the company,” Denis Fleming, Jr., vice president of government relations at Almost Family, explained to HHCN. “Our efforts are directed at advocacy in some states. We try to take a policy-oriented, data-driven approach to inform health cabinet members in our states and advise them about the impact on families, care and caregivers in the industry and how improving wages can help.”

There has been recent news of certain states proposing wage rules that could work in home health caregivers’ favor, but at this time, it still varies greatly from state to state how caregivers will be viewed in the eyes of the government.

Written by Alana Stramowski