Curing the Home Health Care Blues

This post is an entry for our $25,000 scholarship contest. The post was created by Kathleen Anderson and may not always reflect the views of JW Surety Bonds.


It is estimated that every day more than 10,000 Baby Boomers are turning 65 which is causing some experts to predict booms for the home health care agency. According to the National Association of Home Care & Hospice Basic Statistics report for 2009, they found that approximately 12 million individuals currently receive care from more than 33,000 Medicare certified home health agencies, certified hospices or non-Medicare agencies providing care in the home.  The Bureau of Labor Statistics confirms this prediction in their Job Outlook Handbook for Home Health Aides by predicting a 48% increase in the job outlook for this career from 2012 – 2022.  They characterize this growth as “much faster than average”. (Farnham, 2013) (National Association for Home Care & Hospice, 2010) (Bureau of Labor Statistics)

Although there is an expectation of need and growth in this sector, median pay for this job is relatively low ($20,820 per year or $10.01 per hour) and there is relatively no education or experience needed. (Bureau of Labor Statistics)  With this in mind it is easy to figure out why turnover rates in this sector are extremely high.  A USA Today story published in 2012 quoted the Institute for the Future of Aging Services as reporting, “From state to state, that annual turnover rate can vary from 60% to 100%”. (Kennedy, 2012)

It’s quite a conundrum for the home health care businesses.  High turnover can be directly related to low wages and the cost of retraining individuals can run as high as $4000.  Higher wages will also result in higher costs for seniors who desperately need this type of care and are often times without the means to pay for such care.  It seems to be a vicious cycle as high turnover rates directly affect the seniors who rely on this care. Patients must deal with a multitude of caregivers, rather than the same person.  Employers must continually incur the costs of hiring new employees and employees find obstacles trying to advance their careers.

Across Pennsylvania the annual cost of training due to turnover in 2000 was at least $35 million.  Most recently in Hershey, PA approximately 260 home healthcare jobs were eliminated when Country Meadows Retirement Communities of Hershey announced that it would conclude services for clients residing outside its retirement communities by September 2014 due to diminishing staffing resources.  (Stone & Wiener, 2001) (Healey, 2014)

According to the CEO of Country Meadows, Michael Leader said that although the organization increased their recruiting efforts, bolstered training and adjusted benefit packages none of the actions produced the necessary results.  “The success of home-based services is driven by positive relationships built over time by dedicated, trusted co-workers. Turnover affects client care. Period.” (Healey, 2014)

Wouldn’t it be better to pay higher wages and provide better benefits for a service that seems so desperately needed?

Of course the simple answer is a resounding yes.  Except that according to an article by, home care business owners say that increasing wages is difficult because of “cutbacks in Medicaid and Medicare reimbursements, both of which are the main sources of operators’ revenue.”  In 2009 Medicare accounted for approximately 41% of home health expenditures. (Oliva, 2013) (National Association for Home Care & Hospice, 2010)

But low wages aren’t the only reason for high turnover rates in this sector.  According to the U.S. Department of Health and Human Services, regulatory policy on long term care also had a direct impact on the high turnover rates in this service industry.

“Regulatory policy on long-term care focuses primarily on protecting consumers, rather than on responding to workers’ concerns. Regulation tends to emphasize entry training, with limited attention to continued career growth or development. One major policy issue for workforce development is the extent to which states allow nursing assistants to perform certain tasks currently performed by nurses (e.g., administering medications or providing wound care). Giving frontline workers added responsibility and autonomy may motivate them to remain in the job or encourage others to seek these positions.” (Stone & Wiener, 2001)

Providing quality jobs to a quality workforce is most obviously the best way to solve this workforce dilemma.  Cooperative Home Care Associates (CHCA), an employee-owned company, aims to do just that.  The company is staffed primarily by former welfare recipients who after three months of employment can purchase shares in the company.  Wages are higher than average for home care aides and workers receive benefits as well as guaranteed hours.  (Cooperative Home Care Associates)

Are worker cooperative business models the answer?

CHCA was started in 1985 with only 12 home health aides but now employs more than 2000.  In 1992 CHCA founded the Paraprofessional Healthcare Institute (PHI).  PHI, a national non-profit, began as the training provider for CHCA’s workforce but has since grown to a leader in the industry, working with various agents in the long-term care industry including employers, unions, policy makers and advocates.  Collectively, both CHCA and PHI now provide care to more than 6,000 individuals, employment to more than 2,200 and directly trains 600 annual for careers in the long-term care industry. (The Aspen Institute)

PHI looks not only to train the direct care workers in the industry, they have also implemented many other training programs for all other levels of the industry – including consumers and agencies who hire direct care workers with programs that focus on everything from communication skills and mentorship programs to train-the-trainer programs for staff educators.  Family caregivers are offered opportunities to build problem solving skills to help build stronger relationships with health care workers.  Building these skills has had a significant impact on reducing the turnover rate.  CHCA boasts a turnover rate of just 20 percent annually and 70 percent of their employees are employed full-time. (The Aspen Institute) (University of Wisconsin Center for Cooperatives)

Clearly these ideas are what will be needed to spur the positive changes required for a service sector that shows such growth and necessity in today’s society. This promising business model has even spurred the New York City Council to allocate $1.2 million to support a Worker Cooperative Business Development Initiative.  This program aims to provide financial and technical assistance to worker cooperative businesses.  Services provided include worker buyout programs, succession planning, financial and tax advice.  (NYC NOWC)

Worker cooperative businesses have been shown to successfully deal with issues such as poverty, long-term unemployment and the growing isolation of low-wage workers, a profile that many home health care workers fit into.  The Federation of Protestant Welfare Agencies recently released a report titled “Worker Cooperatives for New York City: A Vision for Addressing Income Inequality” which emphatically stated that although worker cooperatives have the ability to solve all of these problems, it cannot be done without a strong embrace of public policies and support of individuals and businesses. (Federation of Protestant Welfare Agencies , 2014)

Hopefully more initiatives like the one recently implemented in New York City will follow and we will see this important sector of our economy become more stable and perhaps thrive.

Works Cited:

Bureau of Labor Statistics. (n.d.). Home Health Aides. Retrieved from Bureau of Labor Statistics:

Cooperative Home Care Associates. (n.d.). Retrieved from Cooperative Home Care Associates:

Farnham, A. (2013, April 23). Boom Predicted for At-Home Care Industry. Retrieved from AbcNews:

Federation of Protestant Welfare Agencies . (2014, January). Worker Cooperatives for New York City. Retrieved from Democracy at Work Institute:

Healey, M. (2014, July 16). Country Meadows to eliminate hundreds of home-care jobs. Retrieved from

Kennedy, K. (2012, February 15). High turnover affects home health care quality. Retrieved from

National Association for Home Care & Hospice. (2010). Basic Statistics. Retrieved from National Associate for Home Care & Hospice:

NYC NOWC. (n.d.). Retrieved from New York City Network for Worker Cooperatives:

Oliva, J. (2013, April 15). WSJ: Turnover Rates, Wages “worsen” Labor Shortage for Nursing Aides. Retrieved from

Stone, R. I., & Wiener, J. M. (2001, May). Who Will Care For Us? Addressing the Long-Term Care Workforce Crisis. Retrieved from U.S. Department of Health and Human Services:

The Aspen Institute. (n.d.). Profiles of the Direct-Care Workforce and PHI. Retrieved from Workforce Strategies Initiative at the Aspen Institue:

University of Wisconsin Center for Cooperatives. (n.d.). Cooperative Home Care Associates. Retrieved from


Sandy is an in-house author and surety bond expert at JW Surety bonds, the largest bond agency in the U.S.

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