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This is a carryover from a couple of AARP and Alzheimer caregiver discussion groups. Someone noted that private care costs in Florida were $120 to $150 per day on a direct-pay basis, and somewhat more through agencies. This is for a 24-hour day.

A consultant and an agency owner both commented on this:

- One: "With an agency- you have someone with money to sue if need be!"
- The other: "you have an agency to sue when you hire an agency (I call it a "throat to choke"), but, more importantly, the agency is the employer".

We hear that frequently in financial advice columns these days, right?

The agency owner continued: "When you hire an agency, all of the exposure to liability falls on the agency, which the agency mitigates by purchasing insurance. When you hire a caregiver directly, you may be responsible for payroll taxes and workers' compensation insurance. Additionally, you become exposed to significant potential liability. As an example, if I am invited to your house as a guest and I am injured, your homeowners' insurance covers any potential liability. If I get hurt in your house as a worker and there is no workers' compensation insurance in place, I could literally end up owning your home."

OK, now they're in my territory. This is me they are referring to. Two things:

* First, these scare tactics are extreme and unwarranted. There's now liability insurance available for caregivers. Plus they are being misleading with the '"employment" issue (I'll explain)

* Second, this fear-based marketing is, in my opinion the result of an explosion of agencies across the country, and especially in Florida, where the number of agencies doubled in just the past five or six years. Lot's of newcomers into the field. Who are they?

Looking at the man who posted, he was with the relatively new, franchised office of a California-based Home Care company. That franchisee, as far as I can tell, was one of many across the country. The company selling the franchises, according to its website, was started about five years ago by a woman who saw the opportunity for a business after caring for her parent.

Looking around the internet some, it seems like a great many of these new agencies had similar backgrounds - someone who learned a lot caring for a parent, and career changers jumping into what they see as high growth businesses. So what's all this? Where are the pros? Someone maybe with hands-on care experience at a place that's renowned for great care? Who has seen good care and understands what is involved in providing it?

Anyway, a great many of these new firms seem to have been started by people who provided care for their parents, looked at the potential, and said to themselves “I can do that!”.

This is what they’ve figured out. If they can market to the right people, hospital discharge advisers, geriatricians, insurance companies, they can become middle-men in the process. Cost to the family, or their LTC insurer, doesn’t change. What they do, using actual numbers I've seen recently, is collect the $200 per day that the client’s LTC policy pays for care, and from that, pay the actual caregiver $110. Sounds fair, right? After all, they are now providing a valuable service, right?

For the caregiver that $110 is under $5 per hour ($4.58). The insurance company, again using this actual example, was paying out just enough for the equivalent of minimum wage. The catch is that caregivers, whether employees or contractors, are not protected by labor laws as other workers are. If pressed, the rationalization you get is that 24 hours isn’t really 24 hours because there is sleep involved (any Alzheimer’s caregivers out there are thinking “oh yeah, of course”). Just make sure the caregiver sleeps nearby the client, just in case....

To make sure consumers buy into this, and don’t think too hard about the implications, these agencies, especially those trying to establish themselves, flood the market with scare articles. They take the extreme case and blow it out. “The caregiver will own your house” and “no throat to choke” and “employer liability” and “IRS” and “criminals”. Professional elder care advisers buy into this, as does the local media.

In their scenario, who in their right mind would hire someone directly?

If LTC insurance is paying, it’s even worse, because the client then doesn’t even care, as long as it’s covered. Fortunately for our social conscience, these clients aren't the same people who criticize Walmart, or Chinese labor practices, right?

So what about the scare claims of these new agencies? They fail to mention that CNA’s can easily get million dollar liability insurance policies themselves (Google CM&F as an example). There is actually the “throat to choke”. There is an affordable solution to this "problem", as they put it.

As to licensing and background checks, it’s not as difficult as they present. I’ll post a “how to” for consumers over on Elder Care Notebook when I get a chance.

As far as the "employee or contractor" question goes, they use only examples that serve their purpose. Using me as an example, I am a state licensed and regulated professional, offering my services to the public, not just one employer or client, working within what I believe to be the IRS definition of a contractor, “if the payer has the right to control or direct only the result of the work and not what will be done and how it will be done.” (Since this discussion started, I learned that you can ask the IRS for a letter on your specific circumstance, so have submitted a request for clarification. Anyway, clients hire me because I know, from experience and training, what needs to be done and how to do it. I file taxes as a self-employed person.

Unfortunately, as far as home care providers are concerned, agencies have already scared the consumers, and worse, their advisers.

In my opinion, nobody is addressing this. There is an exploitation going on that nobody, except home care workers, cares about.

Related to this, as it stands now you are not able to get home care from CNA's like me under Medicare or Medicaid. You can, however, get very limited home coverage, a few hours a day, from aides from certain Medicare-qualified agencies. For full-time care, Medicare or Medicaid will only cover your care (within their limits) if you go into a nursing home. While I can provide better care, less expensively, but I am not an option. Home care workers don't have lobbyists.

About my claim to "better care", see what CNA's in nursing homes discuss on their Indeed site: Although these nursing home CNA's are earning the big bucks, with a $10 per hour average, they are still struggling. Nationally, 36% have family incomes below $20,000 per year, and 46% said they didn't have time to adequately assist residents.

Back to my subject, though, regarding home care and home care providers.

Maybe we could be getting much better people into this work, earning better money, or at least minimum wage, with actually lower cost to the consumer. Instead, we are going further in the opposite direction.

Everyone can make a difference:

1. Research this yourself to your satisfaction, and if you agree, get the word out.

2. Anyone deciding to use an agency might consider using agencies actually owned by experienced caregivers, who have worked in hospitals or facilities that he or she admires. Owned by MD's, Nurse Practitioners, etc. Not career-change entrepreneurs now jumping in by buying a franchise, or family members who cared for their mother (with all due respect to the mothers).

3. Anyone shopping for care should learn what the real economic arrangement is before using an agency. Find out what the CNA’s (are they CNA’s?) are actually earning, and whether the whole thing makes sense to you and them. You may be paying more than a fair amount to the agency, but are you really getting an exploited worker for your money?

4. If you have Long Term Care, see what your options are on the policy for private care. Can you use the proceeds for the type of care you want? See what yours says.

5.Lastly, as with any consumer sales pitch, when you see scare tactics being used to win business, Run!

If you are using paid caregivers, or need to in the future, please consider being part of the solution, and not contribute to the problem. The overall cost is the same (or less) and you will be hiring better quality people. And maybe better people will be drawn to this work.

Lastly, if you are considering hiring directly, assure yourself that you are acting prudently by using some simple resources. From another of my posts:


Professional liability insurance is available: affordable & accessible.
Do a quick search for home care provider malpractice liability insurance.

Self-employment concerns.
I'll get more information, but if your caregiver is offering services to the general public (not just one employer or client), where “the payer has the right to control or direct only the result of the work and not what will be done and how it will be done”, ask your tax preparer if that does the trick. If so, just keep those standards in mind.

CNA license check. Each state's dept of health care licensing has a database. License-holders have had background checks, passed a state licensing exam, and the state keeps a record of any problems. Ask the CNA for her license number, and check it out.

Additional background checks. There are many on-line "info-check" type services.

Check references.


Look, I know that this issue isn't anywhere near the top of most peoples' list. But since health care reform, improvement, and affordability is being discussed so widely, this might be the time to bring this up.

Thank you

From one major home health care franchiser's web site. For real!

Prospect: "....I am currently unemployed. I am an automotive management professional..... I have an entreprenurial spirit, very passionate and motivated to work hard. But now, I want to build a future for myself and my family that I can grow, nurture and build a retirment from. I have always wanted a business of my own and I agree that the elderly population is growing and a nursing home is not always the answer. I have grown up in a home where my grandmother lived with us to the end and also my great aunt. We believe in great home care where the elderly can be around family. I am very interested in this line of business because I lived my teenage years with a bedridden grandmother. It can be done!

Franchiser: "... you sound like many of our franchisees. In fact, we have a new franchisee here in our training class right now that was laid off from her job at Ford recently..."
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