Why Home Health Care’s Growth Will Falter

As the desire to age in place increases alongside the aging population, the home health care sector will create nearly a million new jobs by 2022, far outpacing the growth of other major occupations in the U.S., The Wall Street Journal writes in a recent article. 

The U.S. Department of Labor predicts the profession will grow by nearly 50% in the next eight years, the equivalent of close to a million new jobs. In contrast, other fastest-growing occupations — health care support, health practitioners and construction/extraction, among the top five — will grow by less than 30%. 

Though the projected growth may be a positive sign for the senior living industry, which is increasingly looking to tap into home health care, the sector may struggle to maintain a solid foothold, as high turnover and low wages plague the workforce. 

Turnover for home health aides is around 40% to 65% each year, and their paychecks hover around $20,000, more than $5,000 below the other health care support occupations the Department of Labor tracks. 

Starting next year, home health care workers employed by agencies or other third parties will be covered under the Fair Labor Standards Act, which guarantees the national minimum wage, currently at $7.25 an hour, and overtime protections. But even then, the sector may struggle. The average workweek for home health aides is 34 hours, so at minimum wage — and assuming the aides work 52 weeks per year — they would make less than $13,000 per year. 

The bulk of funding for the home health care industry — roughly 73%, or $44.3 billion — comes from government programs, primarily Medicaid and Medicare. But those programs may not be able to keep up with the influx in home care workers in the coming years. 

Karen Kulp, president of Philadelphia-based HomeCare Associates, tells the WSJ that the industry is constrained by the state and federal Medicaid reimbursement system, which allows little wiggle room for pay. States determine rates for care, whether it is per visit or by the hour. But the payments must also cover an agency’s administrative staff, overhead costs and benefits.

So while the home health industry may experience positive growth within the decade, this growth will not be met without significant challenges. 

Read the full Wall Street Journal article here. 

Written by Emily Study