Pay Health Care Aides to Jump-Start the Economy is a guest post by David K. Cundiff, MD
When my elderly and disabled father and stepmother required long-term care, I had the resources to hire compassionate and competent caregivers to keep them in their own home until they died. Considering the wonderful care they gave, they didn’t cost very much ($4,500 per month for 24 hour-7 day care, i.e., about $6.25 per hour). Most Americans are not as fortunate as my parents and me in their options concerning long term care.
Of about 16 million disabled Americans requiring long-term care, only approximately 1.6 million live in nursing homes. The rest remain at home receiving varying amounts of personal care (e.g., bathing, dressing, and preparing meals) delivered by about 835,000 professional home health aides, like those I employed for my parents, and unpaid family members and friends. Professional home care aides, primarily low income women, are themselves unprotected by basic labor standards despite efforts to do so in Congress. Consequently, low pay (averaging $9.62 in 2007), long hours, and high turnover undermine the quality of care, as noted by a recent New York Times editorial.
According to survey data compiled by “Strength for Caring,” an organization that advocates for caregivers, approximately 46 million Americans are providing care to an adult relative or friend and more than 138 million Americans believe they will need to provide care to someone in the future. Caregivers spend 21 hours per week on assisting their loved ones. Caregivers suffer high stress, increased rates of anxiety and depression, and major financial and personal sacrifices. Based on this analysis and many other studies, advocates for long-term care have repeatedly called for the government to provide financial relief by tax credits or otherwise for caregivers of non-institutionalized disabled people. Congress has not responded to these pleas for caregiver relief based on compassion and economic justice.
Now that the economy is in decline with massive job losses, consider the economic effect of providing well earned money to the 46 million personal care providers (31 million full-time equivalents). Paying minimum wages to family and friends of the disabled for their caretaking time ($7.25 per hour beginning July 2009) would cost about $360 billion per year (46 million health aides x 21 hours per week average per caregiver x 52 weeks/year x $7.25 per hour for wages plus benefits = $364 billion).
A successful model program exists. For people with Medicaid insurance, a pilot project of giving disabled people money to pay for their own caregivers has been a huge success. Investigators at Mathematica Policy Research, Inc. found that, compared with services from traditional home care agencies, Medicaid’s “Cash and Counseling” program gave disabled people and their caregivers improved quality of life and resulted in less use of nursing homes.
These 31 million full-time equivalent paid jobs could be created immediately. This $360 billion spread broadly (average yearly income: about $7,800 for 46 million people) would be what the doctor ordered to immediately help counteract massive job losses throughout most economic sectors. Much of the money would be immediately returned to taxpayers, because paying these health care workers would mean they require less public assistance. The collateral economic benefit of the money these workers would spend for necessities would have an infinitely greater multiplier effect in creating more jobs than lavishing more billions on banks or enacting the $800+ billion proposed stimulus bill. It would address Republican concerns that the stimulus create jobs immediately and Democrat priorities that the money go to help the poor.
You might say, “Why should public money pay for family members and friends to care for disabled people in their private residences?” If those 46 million unpaid caregivers quit and their 14 million disabled loved ones went into nursing homes, society’s cost would be at least $1.3 trillion (14 million non-institutionalized disabled people x $95,000 per year average nursing home cost in 2010 = $1.33 trillion).
Paying home care providers would also provide financial incentives to move some of the 1.6 million Americans living in nursing homes back home to their families and friends. For each nursing home resident moved back to home, about $69,000 per year would be saved ($95,000 per year on average for nursing home care in 2010 – $26,000 for 69 hours per week of home care on average = $69,000).
Over the long term, funds for home care aides should not come from more borrowing and increasing the national debt but from true comprehensive health care reform. No student of health care policy doubts that the $2.7 trillion that Americans will pay for health care in 2010 includes massive waste. Real health care reform should shift enough wasted money in our highly dysfunctional medical system to provide ongoing funding of currently unpaid home caregivers.
David Cundiff is a retired internist and hospice physician who lives in LA County. He is now working on a book titled Doctor Managed Care.