People everywhere are adapting to the new normal. Home health care is no different. Our industry is responding not only to the coronavirus, but also to long-term trends in health care.
Heading into the 2021 General Assembly session, Virginia lawmakers should prioritize fully funding Medicaid reimbursements for home health care as a critical bridge to a new normal for this industry.
As Virginia pursues the laudable goal of raising the minimum wage, it creates a dollar-for-dollar impact on home care. The minimum wage is set to rise 30%, but the General Assembly only has committed to a 7% increase in Medicaid reimbursements to date — creating a real funding shortfall.
If this shortfall is not addressed, Medicaid patients might lose access to the high-quality home health care services provided by home care agencies.
Care Advantage was founded in Richmond in 1988 to provide care and support to those who need it. Now we serve more than 11,000 patients with nearly 8,000 employees — providing assistance and care for patients in their home, keeping them close to loved ones and familiar surroundings. Our service territory includes 90% of the Virginia population.
Our success gives us insights on long-term trends we cannot ignore. One in four Americans — and more than two-thirds of those who are older than age 65 — have multiple chronic conditions. By 2050, there will be more than 87 million Americans older than 65, significantly increasing the need for a health care system that meets those needs.
As these trends accelerate, policymakers will need to find long-term solutions to ensure people can access the care they need. There are a variety of ways to achieve that goal. But before we get there, Virginia must make sure it fully funds Medicaid reimbursements for home care.
Unlike many home care companies, Care Advantage accepts Medicaid patients, providing valuable care to a vulnerable population.
Agency-directed care is the bridge for Medicaid patients between consumer-directed care provided by a loved one and skilled nursing facilities. Agency-directed care allows patients to receive more specialized health care in their home, avoiding the need for other long-term support services in a facility setting.
The data bears this out.
Providing in-home care represents a 95% cost savings over a hospital stay. And studies show that at least one-third of patients in skilled nursing facilities could be cared for in home, with similar to better clinical outcomes.
Agency care also comes with more value than just the wage paid to the caregiver. We provide additional support from our medical staff, skills development for caregivers, and accountability for families and the commonwealth.
Agency-directed care also fills another critical need in our society: providing good-paying, purpose-driven careers.
Home care jobs often pay more than the minimum wage, while providing other benefits. At Care Advantage, those benefits include an “instant pay” option, educational scholarships and a career ladder that allows them to move from a personal care attendant to registered nurse.
Unless the General Assembly fully funds Medicaid reimbursement rate increases, agency-directed care for Medicaid patients might not be sustainable long term. This could create a gap in the care continuum at a time when our society cannot afford any fault lines in health care.
The General Assembly and the governor made laudable and important progress toward this goal in 2020. Despite the budget challenges caused by COVID-19, the commonwealth provided a 5% increase in Medicaid reimbursement rates.
Unfortunately, the 2% rate increase scheduled for next year does not provide nearly enough funding to make agency-directed home care sustainable in the long term.
Current rates already are low, making it difficult for agencies to pay caregivers, fund additional medical support and provide the training necessary for this critical part of the health care system.
As the minimum wage increases in the commonwealth, pressure on home care wages also will rise. This, in our view, is a good thing. As a company, we believe in a living wage for our employees.
But agency home care faces dollar-for-dollar pressure as the minimum wage increases. The minimum wage is set to rise 30% over the next several years (again, not something we oppose), but reimbursements only are set to rise another 2% in 2021 — creating a significant funding shortfall.
The General Assembly cannot overlook the importance of fully funding Medicaid reimbursements for home care.
If our leaders fail to act, patients on Medicaid could be left to fall through the cracks of a broken care system, pushed into nursing homes and tens of thousands of good-paying jobs could vanish overnight.
And taking the long-term view, shoring up this immediate need is the first step toward creating the new normal in health care and addressing the inevitable trends of an aging population beset with chronic conditions.
Tim Hanold is CEO of Care Advantage Inc., a home care agency headquartered in Midlothian, with approximately 8,000 employees in Virginia.