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2024 Home Health Trends – Continued Labor Shortage To Put a Strain on the Industry But Innovative Solutions Can Help

Exploring Growth, Workforce Challenges, and How to Address the Labor Shortage in At-Home Care


January 25, 2024 – 2024 is going to bring some interesting trends for the home health and home care industry. While we’ve covered a few trends in our last blog, in this blog, we are going to be looking at one of the most pressing issues – the labor shortage of caregivers and nurses. This is a trend that has profound implications for both providers and consumers. This blog aims to explore the labor shortage trend, unpacking the cause, examining the impact, and exploring potential pathways forward. By understanding these developments, and how value-based payments come into the mix, we can better prepare for the future, ensuring that the home health and home care services continue to evolve in ways that are both innovative and patient-centric. 

Understanding the Home Health and Home Care Labor Shortage

The home health and home care industry is facing a significant labor shortage, particularly among caregivers and nurses. This is a trend that’s expected to intensify in 2024. While the direct care worker workforce, which includes personal care aides, certified nursing assistants, home health aides, residential care aides, psychiatric aides, and other occupations, has more than doubled from 2000, supply is still expected to fall short of demand. The U.S. Bureau of Labor Statistics (BLS) estimates that by 2031, there will be a million new home health and personal care aide jobs and we are going to fall short of filling these positions.

This shortage is fueled by several factors, including an aging population that requires more care, a shift to home-based care. A senior in the United States today has a 70% chance of needing long-term services and supports (LTSS) and most of the aging population, an overwhelming 88%, want to remain living in their homes for as long as possible. Other factors that attribute to the workforce shortage in home health care and home care are high turnover rates, historically low wages, and the demanding nature of the job that make these roles less attractive. 

The issue is that the implications of the labor shortage for consumers are substantial. Potential impacts include longer wait times for services or even rejection of services. A recent study showed that 89% of home care providers have had to deny care because of the workforce crisis. On average, small to mid-sized providers refuse 510 care hours each month. That puts seniors at risk for unmet medical needs and limits their ability to live independently at home. It can also create quality of care issues as existing home-based care workers are overworked and can face burnout. When value-based payment models are being used for reimbursement, this can significantly impact the bottom line of providers. With reimbursement hinging on patient outcomes, quality of care, and patient satisfaction, a depleted workforce is not good for anyone. 

Unfortunately, reports indicate that this shortage is not just a temporary blip but a structural issue requiring comprehensive strategies. It also underscores the need for broader systemic changes, such as policy reforms to improve caregiver wages and training programs to build a larger, more qualified workforce. The labor shortage in the home health and home care industry is a complex challenge with no easy solutions, but by understanding the factors driving this trend, the industry can navigate the challenge and continue to provide essential services to those in need.

How is the At-Home Workforce Shortage Being Addressed?

Now that we’ve looked at the causes and implications of the at-home workforce shortage, it’s time to see what can be done about it. Simply put, this is a multifaceted issue stemming from several interconnected factors. The main driver is the aging population increasing the demand for services, while the labor pool for caregivers and nurses isn’t growing at a pace to match. There is nothing that can be done about the increased demand for services due to our aging population, but other factors can be addressed. The physical and emotional toll of caregiving, historically low wages, and limited career advancement opportunities are all issues that can be tackled with both straightforward and innovative strategies. 

To address these challenges, the industry is taking multifaceted actions. The Bipartisan Policy Center has called for federal intervention to mitigate the crisis, emphasizing the need for improved wages, benefits, and career advancement opportunities to attract and retain workers. Proposals include increasing Medicaid reimbursement rates to enable higher pay for caregivers, offering tax credits to support family caregivers, and providing funding for training and certification programs.

One obvious strategy for addressing the direct care workforce shortage is increasing compensation and benefits to make the positions more appealing and competitive. According to the U.S. Bureau of Labor Statistics, direct care workers earn the fifth-lowest average hourly wage among U.S. occupational groups. They also lack benefits like access to healthcare and retirement savings plans. As a result, there has been a push from policymakers to increase the wages of direct care workers on both the state and federal level. 

While increasing compensation is essential, it is not the end all be all to addressing the home health and home care workforce shortage. Addressing the mental and emotional toll and burnout associated with the job is also essential. That is something that providers aim to address this year. According to a recent study, a majority of surveyed healthcare executives said they intend to focus on the mental health and well-being of their employees in 2024. To do this, some organizations have tried to make employee benefit packages more appealing. Additionally, agencies can create a supportive work environment, offer flexible schedules, and provide mental health support to improve job satisfaction and retention.

Another way to address the workforce shortage is to turn to technology to alleviate the strain on human workers. While technology can never replace human interaction completely, it can eliminate repetitive tasks, make tracking patients and services easier, and supplement healthcare providers. By implementing telehealth services, remote monitoring, and automation for administrative tasks, providers can ensure that human caregivers are utilized more effectively and for the more complex aspects of care. This is one way that value-based payments can come into the mix. Payers can add in a VBP for the utilization of technology as part of a solution. One example of this is connecting patients with remote monitoring devices. This allows providers to keep tabs on clients, without needing to constantly be in the presence if an agency is facing a shortage.   

There’s also a growing focus on building a robust pipeline of healthcare workers. This involves not only expanding training and education programs but also creating awareness about the rewards and opportunities in caregiving careers. Partnerships between educational institutions, healthcare providers, and government agencies can facilitate this, offering pathways for individuals to enter and thrive in the home health and home care field. In home care specifically, this could be a chance to implement value-based payments, like they have with the Home Health VBP Program. If providers know there are set reimbursement rates and a federal program, they may be able to invest more thoroughly into recruiting and training workers.  

While the workforce shortage presents a significant challenge, a combination of policy reforms, industry innovation, and societal shifts in how caregiving is perceived and valued is essential to address the crisis. As value-based payments shift into the home care and home health industry, providers will also have an increased incentive to expand their workforce and increase worker training. With patient outcomes and satisfaction at the forefront of quality measures that determine compensation, agencies will need to take this seriously. The good news is that by working collaboratively, stakeholders can create a more sustainable, effective, and compassionate home health and home care workforce for the future.

Advocates Perspective

Simply put, the expected growth of the at-home care sector is going to pose a lot of challenges for the industry. The ongoing labor shortage underscores the need for innovative solutions and strategic planning. To navigate these changes successfully, agencies will need to be proactive, adaptable, and committed to continuous improvement. Embracing technology, investing in workforce development, boosting wages and benefits, and fostering a culture of inclusivity and respect will be key to meeting the evolving needs of patients. As always, it is essential that as the industry adapts to these trends, that it maintains a focus on quality, accessibility, and compassion in care delivery.


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About the Author

Fady Sahhar brings over 30 years of senior management experience working with major multinational companies including Sara Lee, Mobil Oil, Tenneco Packaging, Pactiv, Progressive Insurance, Transitions Optical, PPG Industries and Essilor (France).

His corporate responsibilities included new product development, strategic planning, marketing management, and global sales. He has developed a number of global communications networks, launched products in over 45 countries, and managed a number of branded patented products.

mandy sahhar

About the Co-Author

Mandy Sahhar provides experience in digital marketing, event management, and business development. Her background has allowed her to get in on the ground floor of marketing efforts including website design, content marketing, and trade show planning. Through her modern approach, she focuses on bringing businesses into the new digital age of marketing through unique approaches and focused content creation. With a passion for communications, she can bring a fresh perspective to an ever-changing industry. Mandy has an MBA with a marketing concentration from Canisius College.