By Robert Holly | October 16, 2018
A shortage of skilled workers, higher minimum
wages, confusing regulations and a greater incidence of Alzheimer’s disease and
dementia are all causing the cost of in-home care to rise, though not as fast
as those in other long-term care sectors.
Between 2017 and 2018, the annual median cost
for a home health aide increased 2.33% to about $50,336, according to the most
recent Cost of Care Survey from Richmond, Virginia-based insurer
Genworth Financial (NYSE: GNW). The per-year median cost for homemaker services
also saw a slight increase, rising 0.24% to $48,048.
Broken down on a monthly basis, median costs
for home health and homemaker services in 2018 each checked in at a little more
than $4,000.
Long-term care support services outpaced the
U.S. inflation rate over the past year. Over the past 15 years, all care
settings have seen noticeable increases in costs.
The survey — the 15th overall — is based on
more than 15,000 surveys of nursing homes, assisted living facilities, adult
day health facilities and home care providers. The survey collects information
from more than 440 Metropolitical statistical areas, as defined by the Office
of Management and Budget.
Of the care settings that Genworth reviewed,
adult day care services had the lowest annual median cost of care in 2018 at
$18,720. The highest was the per-year cost for a private room in a nursing home
at $100,375.
“The year-over-year cost of any kind of
long-term care is rising quickly, with no sign of slowing down,” Gordon
Saunders, senior brand marketing manager at Genworth, said in a statement.
“Increasingly, people and their loved ones are finding that the cost of
long-term care services is staggering and often they are unaware of it in
advance.”
Saunders also manages the Cost of Care Survey.
While facility costs have climbed, the annual
cost of in-home care had remained steady until recent years. Since 2004, costs
for home aides and homemaker services have increased 19% and 26%, respectively.
Several factors are driving up costs,
according to the Genworth study. For example, a shortage of skilled workers
means demand for long-term care services is far outpacing supply. Higher
minimum wages — whether through statewide policy efforts or wage pressure from
competing industries — has also led to higher costs.
In this respect, home care providers are
competing not just with each other for talent, but other large employers.
Earlier in October, online retail giant Amazon (Nasdaq: AMZN) increased its
minimum wage to $15 an hour for all full-time, part-time, temporary and seasonal
employees. A home care provider paying less than that may find itself battling
Amazon for workers who value their paychecks more than their vocations.
“As the costs of labor and facilities rise,
finding affordable care options becomes much harder for caregivers and families
nationwide,” Jennifer Johnson, clinical director of CareScout, the organization
that conducts the Cost of Care Survey, said in a statement. “Most people prefer
to receive care in their homes, which poses the unique challenge of finding
enough caregivers to meet those needs.”
Another factor driving up cost is the
increasing prevalence of Alzheimer’s disease and dementia, a trend that’s
prompting home-based care agencies to design and launch specialized care
programs that often come with a higher price tag.
About 5.7 million Americans are living with
Alzheimer’s disease, according to Alzheimer’s Association statistics. By 2050,
that number is projected to rise to nearly 14 million individuals.
Home health aides are most expensive in
Hawaii, Minnesota and Washington, and least expensive in Louisiana, Alabama and
Mississippi, the Genworth survey found.
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