Technology and the Logistics of Home Care

The US faces a shortage of professional in-home care workers.  The Bureau of Labor Statistics has projected both the growing availability of home care jobs and the shortage of people to fill them. Some states will confront daunting shortages within the next few years: Minnesota will need to fill almost 60,000 direct-care and support positions by 2020, particularly as the state shifts funding toward care in the community rather than in nursing facilities.  The problem is worse in Alaska – where many care workers are nearing retirement age themselves.  Over time, as AARP has predicted, the care gap will widen as the boomer population ages – and their care needs catch up with them.  And finally, in nursing, the future has arrived. “Between 2006 and 2016, the U.S. Department of Labor (2007) projected that registered nurse job growth in the home healthcare sector (39.5%) will be larger than in the hospital sector (21.6%).” 

Organizations are challenged to find and retain workers.  A median pay of $10/hour for home health aides and few benefits may be contributors to the median turnover rate of 60-75% among private duty home care workers. The same survey showed “that 62.8 percent of home care agency administrators identified ‘caregiver shortages’ as one of the top three biggest "threats to the growth of [their] business in 2015." One of the country's biggest home-care employment agencies, ResCare, hires about 2,000 new workers nationwide each month—but most of that is to replace workers who have left, said Chief Executive Ralph Gronefeld Jr.

Oversight of the workforce is rudimentary, regulation is limited.  Most home care is private duty – with one worker providing care in the home to one recipient. The majority of workers are women with low wages, with 50% of the lowest tier of home care workers reportedly on food stamps. Furthermore, according to the LTC Commission Report, “paperwork burdens, the result of federal and state regulatory requirements, also have become particularly burdensome for nurses in nursing home and home health settings—detracting from their ability to supervise and mentor staff, oversee quality and introduce innovation to the workplace.”

Technology has yet to have a big impact on the efficiency of caregiver work.  McKinsey’s 2011 report “Spurring the market for high-tech home care” noted that “Misalignment between buyers and beneficiaries is an important brake on the penetration of home care technologies.” But the “spread of home care technology has an especially strong potential to accelerate under such a scenario because care pathways that rely on skilled labor—pharmacists, nurses, and doctors—are most vulnerable to labor shortages and to eventual augmentation by technology-driven approaches.”  It has taken a few years to see even the beginnings of tech-driven approaches, as evidenced in previous market research from 2012, The Future of Home Care Technology. But during 2015-2016, new companies and partnerships emerged that demonstrate interest, if not yet achievement, of the efficiencies that tech-enabled home care may bring.  And in 2016, a partnership between ComfortKeepers and GrandPad extended this trend.

In supply-challenged markets, care worker salary is low, commute is long.  According to the Census (PUMS) data, the average annual Home Care Aide salary is $15,587. San Francisco, notes Salary.com, has one of the highest home care pay rates of $26,734 $ (2228/month) – but the cost of rental housing within 10 miles of San Francisco averages $3770/month. In Washington, DC, home health aides are among those with the lowest pay/longest commute, typically by car, typically to DC. Many home care workers lack cars – for example, in this Boston Globe article: “Sixty-three-year-old Terrie Cherry, a primary care attendant, crisscrosses Worcester up to seven times a day on the local buses to reach her patients.”

Disruption ahead – managing logistics. Home care services have been concentrated in the past among small agency/franchise operations, but that seems likely to change – hospitals are pushing patients out more quickly, seeking partnerships with care provider organizations that will help prevent readmission. That will in turn drive consolidation among home care/home health organizations to gain economies of scale in order to compete. As other industries have demonstrated, consolidation, growing expectations of the customer/referring organizations, competition, turnover and a shortage of workers will boost interest in optimizing the work and the workforce.  

Considering further research on this topic, so thoughts and comments are welcome.