Taking care of our elderly loved ones in the comfort of their own homes is becoming increasingly costly. In April 2024, the expense for in-home care of the elderly, invalids, and convalescents surged by 13.9% compared to the previous year, as per the Bureau of Labor Statistics. This figure is alarmingly close to the March 2024 record-high increase of 14.2%. To put this in perspective, since December 2005, the average annual increase in these costs was only 2.6%. The sharp rise in 2024 marked the largest monthly increase on record with a 5.9% spike from February to March.
At-home care involves a range of services, from administering medication and preparing meals to assisting with bathing and other daily tasks. This sector is critical as it often represents a more affordable alternative to nursing homes. The AARP notes that while the average hourly wage for home care workers stands at $27, the annual cost is still less than that of nursing facilities. However, the growing financial burden of these services is a pressing concern for many families.
Why Are At-Home Care Costs Rising?
The primary driver behind the soaring costs is an increase in labor expenses. Since the pandemic, wages in the at-home care sector have risen significantly amidst heightened demand driven by an aging population. Over the next decade, the U.S. is expected to need over 9 million new direct care workers, despite plans to create only 1 million new jobs in this field, according to the nonprofit PHI.
Marc Cohen, a professor of gerontology at the University of Massachusetts Boston, explains that this is a classic case of supply and demand. “As demand increases and supply dwindles, prices naturally rise. Employers must offer higher wages to attract the necessary workforce, which includes many individuals from immigrant and low-income backgrounds,” Cohen explains.
It’s also noteworthy that these cost increases are not due to rising profits within the industry. Cohen emphasizes that contrary to some beliefs, the at-home care sector is not experiencing significant profit gains. Instead, the price hikes are a reflection of previously underpaid labor finally receiving fairer wages.
Can At-Home Care Costs Be Reduced?
Reducing the cost of at-home care is challenging but not impossible. Enhancing the labor pool’s size and quality is crucial. Governments can play a role by ensuring that a significant portion of healthcare funding is allocated directly to workers. Improving working conditions and offering better career advancement opportunities are also vital steps.
Competition for workers between at-home care agencies and nursing homes is fierce. Innovations like the greenhouse model, which focuses on smaller, more personalized nursing home environments, may help alleviate some of this competition.
Moreover, immigration plays a critical role in the availability of care workers. A decrease in immigration could lead to even higher costs. “Stabilizing immigration policies could help ensure a steadier supply of labor, which might help control wage growth in the sector,” says Cohen.
Finding Quality At-Home Care
While lowering costs is important, finding high-quality at-home care should be a priority. Cohen advises focusing on the trustworthiness and communication skills of potential caregivers rather than just the cost. “This is a deeply personal service, and often, the cost does not directly correlate with the quality of care,” he remarks.
Agencies that provide care can also support quality by ensuring that workers are well-trained, licensed, and insured. Platforms like Carina, a nonprofit registry, help connect individuals with qualified caregivers. Additionally, evaluating an agency’s staff retention rates can provide insights into how well it supports its workers.
“Employers who value and support their workers are more likely to provide high-quality, person-centered care, ultimately enhancing the well-being of those they serve,” says Emily Dieppa, vice president of workforce innovations at PHI.
As we navigate these challenging economic times, understanding the dynamics behind at-home care costs and focusing on the quality of care will be essential for ensuring that our elderly loved ones receive the support they deserve in their later years.