Imagine being a caregiver working for a private duty home care company today. You’re out there in the ocean as three major storms come together and the waves are crashing over you. (Did you see the movie The Perfect Storm with George Clooney?)
The first storm is Health Care Reform or “Obamacare”. Effective yesterday, October 1, 2013, caregivers could begin signing up to buy health insurance for their state health insurance exchange. They must purchase health insurance by January 1, 2014 or pay a penalty.
The second storm is the US Department of Labor ruling that wipes out the federal companionship exemption for minimum wage and overtime. That means that caregivers who were working more than 40 hours a week at straight time will be cut back to 40 hours because neither private payers or Medicaid will pay the overtime rate, so home care companies will limit their workers’ hours.
The third storm is again part of “Obamacare”. The employer mandate which goes into effect on January 1, 2015 requires that employers with over 50 FTE employees must provide a health insurance plan for every employee who works 30 hours a week or more. While there is much discussion about how companies will deal with this requirement, 20% of private duty companies said they will keep the majority of their employees under 30 hours per week.
It’s Hard Enough to be a Caregiver without all this!
You know how hard it is to be a caregiver. Well, maybe you don’t really know unless you’ve actually worked as a caregiver for three months or more. My wife and I were the primary caregivers for our son, Jason, from the time he was born until he went off to college 17 years later. But I can’t say I really know what it’s like to live the life of a private duty caregiver who works for $10.00 per hour with few benefits, no vacation, and no insurance. But I can imagine. So can you.
While you’re struggling to figure out how these three storms will affect your home care business, I believe you also need to begin focusing some attention on the future of recruiting, selecting, training, and retaining caregivers. As the economy gradually improves we will find that the caregiver shortage we saw in 2006 and 2007 will return. Already, I’m hearing from owners who are finding that the biggest barrier to growing their business is finding enough high quality caregivers to meet the growing demand. And caregiver turnover peaked last year at 52.6% according to the 2013 Private Duty Benchmarking Study.
Caregiver Quality is your Number One Source of Competitive Advantage
While our caregivers are going through their own perfect storm, and you’re beginning to see a shortage of caregivers affecting our ability to grow, the benchmarking study shows that the number one source of differentiation in home care is “Caregiver Quality”. More owners see this as their number one way to distinguish their company from their competitors.
That means you have a huge opportunity to refocus your process for recruiting, selecting, training, and retaining caregivers for the future.
Last week, I was at the Home Care Association of America conference in Scottsdale, Arizona and I had three significant conversations with company owners that will change the face of Caregiver Quality Assurance®. One was a new process for recruiting large numbers of high quality CNAs to serve as personal caregivers in your agency. The second is a wonderful process for providing online training for caregivers that can help you create unique specialty programs in your agency. The third was some new ideas for providing tangible recognition and reward to your caregivers for doing the right thing, and this can be huge in improving retention and reducing turnover.
Stay tuned for more new developments in finding the caregivers you need to grow. We will get through the perfect storm and when the weather clears we hope you will be ready to take advantage of the huge opportunities out there to grow your business and get ready for the future.