Between 2016 and 2026, at-home care providers in the U.S. will need to find a projected 2.9 million more home health aides and personal care aides to keep up with skyrocketing demand, according to the Bureau of Labor Statistics. Doing so won’t be easy, as many — if not most — providers already face severe recruitment and retention challenges magnified by hiring competition from retail giants like Walmart and Amazon.
The topic was most recently highlighted by the Washington Post, which reported on the “catastrophic” shortage of caregivers in Maine last week, prompting Democratic presidential candidate Bernie Sanders to weigh in.
Despite these and other widespread reports, at least one industry insider believes home health and home care’s labor problems may be overblown — and self-inflicted.
In this latest installment of the Confessions series, HHCN spoke with a long-time home care veteran to hear a candid take on ongoing industry labor trends. During the conversation, the source also touched on consolidation and highlighted an emerging threat to home care agencies that he believes isn’t being discussed nearly enough: the self-directed care model.
The home care veteran’s responses are below, edited for length and clarity. The subject of this interview — a person with several decades of home care experience, including time serving as a top executive at a large diversified home-based care provider — is kept anonymous so he or she can speak without fear of retribution.
You can find HHCN’s previous Confessions conversation here.
HHCN: Right now, there’s about 11,500 home health agencies and even more home care agencies. Those figures are shrinking due to rampant consolidation. What do you think this ultimately means for home-based care?
Home care executive: I think consolidation was inevitable. As home care over the years has been more subject to market influences, the forces of capitalism start to take over. By that, I mean the larger, stronger, more innovative and more diversified businesses with more resources are starting to win out.
The truth is that we don’t need 11,500 of anything in this country — except for maybe police stations or fire stations. We certainly don’t need 11,500 CEOs and owners. We don’t need 30,000 vice presidents.
That kind of fragmentation doesn’t take advantage of the economic benefits of scale. Payers will also take advantage of those that are scaling their businesses so that they’re in a better position to lower prices.
The payers benefit when they are doing business with larger organizations because they can put price pressure on them.
Along these lines, I’ve heard that the days of the mom-and-pop home health provider are nearing an end, partially because of Patient-Driven Groupings Model (PDGM) changes and the Request for Anticipated Payment (RAP) proposal from the Centers for Medicare & Medicaid Services (CMS). Do you agree?
I do. But they were over even before PDGM. They were over regardless of what happens with RAPs. They’ve been over for 10 years.
Larger organizations benefit from any pressure put on the system. They can absorb the pressure. The smaller, less stable, weaker organizations drop out. Fewer enter.
When we decided to change the health care paradigm from one where you work, you retire, you get sick, you go into a nursing home to something that’s focused on aging in place, … we started to see more capital and spending — billions and billions of dollars — coming into the home health space.
Why is that important? With that influx in capital, we’ve seen more people looking to get a piece of the home health pie. And those people aren’t interested in the smaller agencies. They’re looking for larger, innovative, technology-driven companies.
Mom-and-pop agencies can’t get a meeting with the big spenders. They can’t get a meeting with managed care or the major health systems.
With that being said, I do think there is still somewhat of a role for smaller agencies if they can specialize in something. If you’re small but really good at language-based, cultural-based care, for example, you can still be relevant. If you’re really good at a specialty, you still have a chance — especially under PDGM.
Bernie Sanders recently Tweeted out a message about how home care should be a guaranteed right, also sharing a story from the Washington Post highlighting the caregiver crisis in Maine. Is the labor market as tough as it seems?
Frankly, I would argue that the worker shortage is a myth and an excuse.
Are there pockets where there is a shortage of specialties? Of course. But overall, there are enough persons to cover the need. What we do have is an environment of providing too much care and of protecting our silos. There’s also been a failure to harness the opportunity of technology and there are — like we just talked about — too many employers.
In particular, there are too many employers who do not focus on their real customer: the care professional. One day, home-based care providers will learn the care professional is the most important person in the entire system. If you do that, you’ll retain at a much higher rate and recruit better.
Just become a great employer. Don’t make it better for somebody to go work at Walmart than with you. Make and market the home health experience as more rewarding than being in a hospital setting for workers.
But we provide too much care, and we do not continuously modulate care based on changing need. We shouldn’t do that. We need to address utilization. We need to be more efficient. If you can be in the home for, you know, two hours instead of four, you free up the precious human resource.
Sounds like you think the worker shortage is largely self-inflicted?
I think that’s true. I think it’s insulting when somebody says they’d rather work at Walmart, Amazon or a clinic, hospital or wherever. Why do we concede potential employees to other employers or industries? Ours is the more rewarding work. We should be able to compete with all those other employers.
Shifting gears, in preparing for this conversation, you mentioned you wanted to talk about the consumer-directed or self-directed care model. You have some concerns and believe providers should as well. Why?
I think there’s an appropriate time and place for self-directed care.
But in its most perverse application, self-directed care is nothing more than unregulated care provided to the most vulnerable — the at-risk elderly. Self-directed care works well for the disabled who are functioning, contributing in the community [but] require more hours of care. The disabled are able to self-direct and self-advocate.
The frail and isolated elderly are the most vulnerable and, as they age, are less and less able to self-direct. The lack of regulation, lack of accountability, lack of a real employer, lack of worker engagement and protections all combine to lower the apparent cost of care making it an attractive option to short-sighted, politically manipulated, cash strapped states.
In California, as the glaring example, over 400,000 at-risk persons in the State’s multi-billion dollar in-home support service program can not use a home care agency. Consumers have no choice but to “self-direct” — whether they are capable of doing so or not — and employees have no opportunity to work with a real employer with real rights, protections and opportunities. Other states have similar to identical programs.
The matter of self-directed care is a complicated one involving a broad array of well-intentioned constituents. As it’s currently set up, though, I think it’s a bigger threat to home care agencies than most people realize, just because of the siphoning of resources. Home care shouldn’t allow billions and billions of dollars to go to this mode of care, especially when it doesn’t have to meet the same standards required of agencies.
There’s also the risk of creep. If a licensed home care worker can be self-directed, why can’t a nurse?
Regardless of the reasons or causes behind the caregiver crisis, it’s getting more difficult to provide one-to-one care. It’s not uncommon for some agencies to turn away clients. Sometimes one-to-one care is just too expensive for consumers. What’s your take on that?
The cost of one-to-one care is increasing tremendously. Minimum wage increases around the country is one of the reasons why. And that’s something that’s rightfully happening because personal care workers have historically been exploited.
As we compensate workers more fairly, the unit cost goes up and the hourly cost goes up. One-to-one care is getting expensive and — given the number of elderly living longer and longer — that math isn’t adding up.
We need to start using technology to increase the number of touches we can have without actually going into the home. Additionally, I think we’re going to see much more group care or community shared-aide services. Anything to touch people at a lower cost.
You’ve had your irons in a lot of different fires over the years. We have a sister site, Hospice News, that covers the hospice industry. A lot of our HHCN readers do home health and hospice. Anything you want to talk about related to end-of-life care?
I think hospice is a critical benefit. It has wonderful origins and history. But I think hospice providers need to be very careful. Length of stay is an issue. Reported earnings are an issue. At some point, regulators and policymakers are actually going to address this — I know they say they already are.
I think as managed care moves into the hospice space over time, that will begin to apply pressure and reasonableness to the benefit. It’s a critical benefit, so let’s not spoil it with excesses. Let’s go back to the basics.