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Turning the Caregiver Crisis Around Requires More Than Increasing Wages

Posted on Thursday, April 20, 2017 1:10 PM

Home health agencies continue the struggle of high turnover rates for caregivers, while facing rising labor costs. According to Caitlin Connolly, Home Care Fair Pay Campaign Coordinator at the National Employment Law Project, “While boosting caregiver wages can aid in caregiver retention, it isn’t the only mechanism to deal with turnover.”

In order to deal with the caregiver shortage and high turnover rages, agencies must be open to trying new things and focus on encouraging 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 not helpful if only the agencies raise wages,” 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.”

With such low wages, fewer workers are less likely to stay in the field long term, Connolly said. The high turnover rates are not only costly to home health agencies, but they 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.”

Agencies need to add more value to caregiver pay by offering more caregivers to work as full-time workers with W-2 status, instead of a 1099 contract basis. Full-time workers have the potential for 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 explains that they haven’t been affected by wage hikes throughout the country. This is because Alliance is one of the few agencies that give their caregivers with W-2s and don’t compensate them as contract workers.

“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 offers perks for workers, such as continuing education workshops, staff events and employee of the month recognition to show caregivers they are appreciated.

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.”

Government support could potentially help the caregiver crisis by making sure they’re protected from fraudulent activities, such as being paid under minimum wage.

Louisville-Based Almost Family (Nasdaq: AFAM) is taking the caregiver turnover crisis 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.”

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