Tuesday, July 20, 2010

Wage deflation in home care

This is a very preliminary thought and observation. Hopefully I can further develop this in an upcoming thesis.

A relative of mine happens to have worked on and off as a home health care provider over the past 15 years. Considering her experience, I've noticed a few things about the home health care labor market that have changed since the late 1990s.

As a homecare provider with certifications (like CPR, home health certificate, etc.) this person was earning, as a new hire, roughly $10.75 an hour as a home health provider in 1999. She worked through a fairly large healthcare provider company. Travel was fairly reimbursed, such that it offset wear and tear on vehicles, gas, and the time spent driving from client to client (in a suburban area of Massachusetts).

Fast forward to 2010. This person now, after being re-certified and going back into care work, now is earning about $10 an hour without fair travel reimbursement. The company also does not recognize holidays (as to not provide overtime pay) and requires employees to spend significantly more time on training through reading/test packets and courses, which is unpaid.

By a quick calculation via Google, an entry level care provide was making $13.71 in 1999 (in today's dollars), yet now makes only $10.00. That's a 27% decrease in the starting wage. Although this is an isolated situation, I am very interested in finding a way to look at actual data regarding this. Was this a unique situation or an ongoing trend?

Why am I concerned? Besides the fact that this person is a family member and is having their labor exploited, I am interested in knowing more about this since I think homecare should be a viable and healthy option for the aging. However, with wage deflation, one can only assume that this "cost" is being reflected in quality of care, worker satisfaction (or dissatisfaction in this case), high turnover in care workers, and ultimately ends up effecting people's health and well-being, presumably for both patients and caregivers. Not to mention a declining wage also undermines the best option, care giving by a family member, by making market home health care providers comparatively less expensive when considering the opportunity cost of keeping care in the family.

In this particular situation, I believe the main reason for wage deflation has to do with the homecare company's contracts for those patients on state aid and possibly also rising administrative costs (which could easily be brought down, mind you, this particular company does not even use electronic timesheets.) But, there are other costs, particularly to the worker. This act as barriers to entry into a field of work that can be potentially very rewarding. Workers must have reliable transportation, flexible schedule, and in many cases fund their own training and certifications.

Basically, there's a lot going on here. I suspect that in an effort to cut costs and receive bids from the ever expanding state health system, wages and quality have been sacrificed. I'm interested in going way more in depth with this as a possible thesis topic for my upcoming academicyear. Should you read this and know of resources where I can find more information or data, it would be very appreciated.

Update: I dug around the BLS website and found some good data. At a glance, I've confirmed that there is indeed a decrease in the real wage for home health care workers. More on this to come.

1 comment:

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