In-Home Care Costs Rising Faster Than Any Other Long-Term Care Setting

Home-based care is often lauded as an affordable — and preferable — alternative to skilled nursing care. But that characterization could be changing, as in-home care costs are skyrocketing to become more expensive than ever.

That’s according to the latest annual Genworth Cost of Care Survey released Wednesday. The survey tracks the cost of various forms of long-term care nationwide, including home care, home health, adult day services, assisted living and skilled nursing.

Specifically, the cost of nonmedical home care spiked more than 7.1% in 2019 compared to 2018, while the cost of medical home health services increased more than 4.5%. That brings the median monthly cost of full-time home care up to $4,290 and the median monthly cost of full-time home health care up to $4,385.

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It’s worth noting that few seniors require full-time home-based care, which equates to 44 hours per week, based on Genworth’s calculations.

Regardless, the cost of nursing home care rose far less dramatically.

It saw an increase of just over 1.8%. That equates to a median monthly rent of $7,513 for a semi-private nursing home room and $8,517 for a private room, according to the 2019 survey.

To compile 2019 findings, researchers contacted nearly 54,000 long-term care providers, 15,178 of whom completed surveys with information on their pricing.

While full-time home care still remains just half as pricey as nursing home care, the concern is that costs will continue to increase unsustainably, ultimately pricing seniors out of aging at home — the setting they’d most prefer.

Why the spike?

Genworth identified the caregiver shortage as a major catalyst behind the rising cost of home-based care.

That should come as no surprise to those who know the industry well. In 2018, turnover in the home care industry specifically reached an all-time high of 82%.

Increase in demand is part of the problem, with the senior population growing at an unprecedented rate. In fact, the U.S. Department of Labor estimates the need for home health aides and caregivers will increase 36% in the next 10 years.

On top of that, in-home care providers are grappling with a tight labor market, rising minimum wage and the discharge of patients from hospitals sooner and sicker than ever before, among other pain points.

“Non-medical agencies are now competing with hospitals, assisted living facilities and other service-based industries by offering higher pay and benefits, which ultimately drives up the cost of providing in-home care services,” Tafa Jefferson, founder and CEO of Amada Senior Care, said in a press release announcing the news.

Orange County, California-based Amada is home care provider with corporate and franchise locations in 39 states. Like others in the industry, the provider is experiencing fierce competition for home care workers.

“Thanks to advancements in mobile technology and recruitment techniques, these highly sought-after care professionals have instant access and exposure to job offers, in many cases, up to three new opportunities a week,” Jefferson said. “As a result, these mostly part-time workers may be working with multiple agencies, accepting jobs that best meet their schedules.”

Less expensive alternative

Adult day centers were the least expensive care sites included in Genworth’s 2019 survey.

They posted a much lower median monthly costs than their home-based counterparts, with adult day services coming in at $1,625. However, much like home-based care, adult day services also saw a dramatic year-over-year price spike in 2019 of just under 4.2%.

Still, with their competitive price tag, adult day services are often considered home care’s biggest competitor. Similar to day car for children, the service allows several seniors to spend the day socializing with each other while being cared for by one or few caregivers.

Not only does adult day care give seniors access to more affordable care, but the model also allows for staffing efficiencies, which are becoming increasingly important as the caregiver crisis worsens.

To boot, it delivers some of the same great outcomes home-based care is often lauded for, according to SarahCare CEO Merle Griff.

Canton, Ohio-based SarahCare is one of the biggest adult day services providers in the country, with nearly 40 centers in 13 states.
“The benefits of [adult day services] are great,” Griff said earlier this year at a conference. “We have decreased hospital readmissions, less emergency room visits, and improved physical and emotional care for [patients].”

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