Help Wanted - Labor Shortage Worsens

Labor Shortage Gets Worse

An acute labor shortage among home care workers across the country is threatening care for disabled and elderly individuals. Many agencies are struggling to retain employees. Scheduling is also difficult, as as agencies move around a shrinking pool of workers to cover open positions.

The labor shortage endangers a vulnerable population. In Minnesota and Wisconsin, nursing homes denied admission to thousands of patients because they lack essential staff. Patients living in rural ares of New York have injured, soiled, and starved themselves because paid caregivers aren’t available. In Illinois, the independence of developmentally disabled people is being compromised, as agencies experience staff shortages of up to 30 percent.

The emerging crisis has several causes. First, state Medicaid programs are unable fund higher wages. Second, the pool of workers willing to perform this physically and emotionally demanding work is shrinking. These problems portend even worse difficulties to come. Experts warn that America’s senior population will swell to 88 million people in 2050, up from 48 million currently. They will also require more assistance with chronic health conditions and disabilities.

“If we don’t turn this around, things are only going to get worse,” said Dr. David Gifford, senior vice president of quality and regulatory affairs for the American Health Care Association.

Rising Demand, Stagnant Wages Contribute to Labor Shortage

For years, experts have been predicting that demand from a rapidly aging population will outstrip the capacity of the direct care workforce. The U.S. Bureau of Labor Statistics estimates an additional 1.1 million workers of this kind will be needed by 2024 — a 26 percent increase over 2014.

Yet, the population of workers who tend to fill these jobs, overwhelmingly women ages 25-64, will increase much more slowly. After the recession of 2008-2009, Medicaid-funded agencies filled positions rather easily. Now, however, the improving economy has led these workers to pursue other higher-paying alternatives. In response, turnover rates are soaring. Falling immigration and refugee rates may make the situation even worse in the future.

At the same time, wages for nursing assistants, home health aides, and personal care aides are stagnant, making recruitment difficult. The average hourly rate nationally is $10.11. This rate is a few cents lower than it was a decade ago, according to the Paraprofessional Healthcare Institute. Workers in a handful of states are pushing to raise the minimum to $15 an hour.

Hardest to cover are people with disabilities or older adults who live at some distance from a city center and need only one to two hours of help a day. Workers prefer longer shifts and less time traveling between clients, so they gravitate to other opportunities.

Hard Times in Wisconsin

Some of the best data available on the labor shortage comes from Wisconsin. Here, several long-term care facilities and agencies serving disabled and elderly individuals surveyed their members over the past year.

One of seven caregiving positions in Wisconsin nursing homes and group homes remain unfilled, one survey discovered; 70 percent of administrators reported a lack of qualified job applicants. As a result, 18 percent of long-term facilities in Wisconsin have had to limit resident admissions, declining care for more than 5,300 vulnerable residents.

The situation is equally grim for Wisconsin agencies that send personal care workers into people’s homes. According to a separate survey in 2016, 85 percent of agencies said they didn’t have enough staff to cover all shifts, and 43 percent reported not filling shifts at least seven times a month.

“The words ‘unprecedented’ and ‘desperate’ come to mind,” said John Sauer, president and chief executive of LeadingAge Wisconsin, which represents not-for-profit long-term care institutions. “In my 28 years in the business, this is the most challenging workforce situation I’ve seen.”

Reaching a Breaking Point

Sauer and others blame inadequate payments from Medicaid, which funds about two-thirds of nursing homes’ business. In rural areas, especially, operators are at the breaking point.

“We are very seriously considering closing our nursing facility so it doesn’t drive the whole corporation out of business,” said Greg Loeser, chief executive of Iola Living Assistance. Iola offers skilled nursing, assisted living, and independent living services about 70 miles west of Green Bay.

Like other short-staffed operators, he’s had to ask employees to work overtime, increasing labor costs substantially. A nearby state veterans home, the largest in Wisconsin, pays higher wages, making it hard for him to find employees. Last year, Iola’s losses on Medicaid-funded residents skyrocketed to $631,000 — an “unsustainable amount,” Loeser said.

Wisconsin Gov. Scott Walker proposed a 2 percent Medicaid increase for long-term care facilities and personal care agencies for each of the next two years. However, that won’t be enough to make a substantial difference, Loeser and other experts say.

Due to the labor shortage, it is increasingly important for agencies to have the right workforce management tools to help retain employees and manage the changing schedules of a shrinking workforce. To learn more about how workforce management can help your agencies minimize turnover and improve retention rates, contact MITC.