Home Healthcare Is Not The Answer

Costs are rising everywhere, putting increased pressure on seniors’ choices.

So, what’s happening in the home healthcare world? On the one hand, you have CMS cutting Medicare payments, with MedPAC suggesting the cuts should be even higher. In addition, wages rates are rising, and home care workers in Washington state have won a $16 per hour wage in the future. On the other hand, new home healthcare startups are raising a lot of money, including $42 million earlier this month by California-based Honor, which is expanding into Texas. And then we read about a small home health provider in California who decided to get into the seniors housing business because home health has become too expensive for his customers. Come again? It really should not be a surprise. I have been saying for years that while most people prefer to stay in their homes, this concept that home healthcare is a cheaper option just is not the case, unless all you need is for someone to stop in twice a day for an hour or so. But with minimum wages starting to increase, not to mention all the costs of maintaining your own home, staying at home will be affordable only for the very wealthy if you really need supervision and care beyond a short visit or two.    

 

 

2 comments on “Home Healthcare Is Not The Answer

  1. Full disclosure I own and operate several home healthcare agencies on the East Cost and I could not disagree with your statements more. The community living model will be subject to the same wage increases facing home healthcare, which I assume will automatically be passed through to the resident in the form of rent increases. The more appropriate comparison, is not community living versus home health, but rather the individuals current housing situation and community living.

    Once an individual transitions from being independent to requiring intermittent or consistent care the community model fails as 1:1 care would be required. Not only is that individual spending 40-50% more on room and board than living in their own residence they will now require healthcare services.

    Community living works for a portion of the population at a fixed point in time. Clients and their families should evaluate not just today’s cost but the inevitable increase in costs over the next 5 years.

    1. But very, very few people require 24 hours of care a day, but if you need someone to just be available on site, you will be paying for someone in your home for 24 hours, whether the care is needed or used. In a senior living community, that staffing is spread over other residents and used when needed. One has to determine what the total cost of living at home is, which includes an implied rental cost for the real estate, utilities, maintenance and repairs, food, etc., and then add in a certain number of hours for care to determine what the true break even is for a senior living option. If a basic assisted living community costs $3,600, and all the costs of living at home equal $1,500 per month, that leaves you $70 per day for home care, or maybe 2 1/2 hours. That’s not much.

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