The cost of home health care and home care increased more than it did in any other provider setting in 2021.
That’s according to Genworth Financial Inc.’s (NYSE: GNW) annual cost of care survey, which showed that while the cost of all long-term care services increased in the last year, home-based care was especially impacted by the turbulent labor environment.
While the demand for home-based care services is growing, both because of the country’s demographics and the increased awareness of at-home care options, the supply of workers is not adequate to meet that demand. Those factors are resulting in higher wages and operating costs.
Pricing variance does exist, however, from state to state and from urban to rural areas.
The states with the highest cost of care for home health aide services were Minnesota, Washington, Colorado, New Hampshire and California, according to the survey. On the other end of the spectrum, West Virginia, Louisiana, Mississippi, Alabama and Arkansas were the states with the lowest cost of care.
“Wages are rising for care professionals, through legislative measures in some regions and because of competition for workers across industries,” Genworth’s survey report read. “COVID-19 is also a contributing factor to cost increases, given increased usage of personal protective equipment, enhanced safety training and additional management of regulatory compliance; however, those costs are expected to dissipate over time.”
The cost of a home health aide — which Genworth describes as a “hands-on” employee — has increased by 12.5% to an annual median cost of $61,776. Meanwhile, the cost of a home-maker services worker – or a “hands-off” employee that may provide cooking, cleaning and errand support – has increased by 10.4% to an annual median cost of $59,488.
The competition for employees, though sometimes between home-based care agencies, generally comes from outside of health care.
Roles that pay more in fast food and retail tend to be the most alluring to former or future potential home-based care workers.
In New York, advocates are trying to pass the Fair Pay for Home Care Act, which would raise wages for home care workers to avoid this issue, and in tandem, raise wages for Medicaid-based providers.
“Over half of [providers] have indicated that their workers left because of low wages, and that number actually doesn’t count the workers who didn’t provide reasons, so it’s presumably higher,” Bryan O’Malley, the executive director of the Consumer Directed Personal Assistance Association of New York State, recently told HHCN. “If you raise the wage, … it is very likely that they will come do the work because the work is much more fulfilling than working at a fast food restaurant, at Target, or at an Amazon warehouse.”
Raising wages for home-based care workers – whether through legislation or supply-and-demand pressure – is undoubtedly hard on providers.
At the same time, many insiders have argued that raising wages could help change the perception of the jobs, leading to easier recruitment.
“The pandemic has shown us that home is the safest place to care for people,” Home Instead CEO Jeff Huber told Genworth. “We are working to enhance the perception of professional caregiving and elevate it as a vocation of the future, with increased training and education standards to ensure consistency and accountability across the industry.”
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