PHI Calls on New York to Increase Investment in Direct Care Workers
On February 1, New York Governor Kathy Hochul released her budget for fiscal year 2024. Through written testimony, PHI expressed support for several of the Governor’s priorities while also highlighting significant concerns. As proposed, the budget does not do enough to address the worsening long-term care crisis created by the growing shortage of direct care workers nor mitigate the economic challenges these workers face.
In New York State, more than 564,000 direct care workers—including home care workers, residential care aides, and nursing assistants—assist older adults and people with disabilities to maintain their optimal health, well-being, and independence across long-term care settings. The critical contribution of this workforce has never been more evident than during the COVID-19 pandemic, as direct care workers have risked their lives to provide ongoing care to those most vulnerable to this devastating virus.
Action is needed to support today’s direct care workforce and recruit candidates to this sector—which, according to PHI, will incur 1.1 million job openings in New York between 2020 and 2030 to meet demand, making it the largest occupation with the most expected job growth in the state.
To strengthen and stabilize this vital workforce, the New York State legislature should consider making additional investments to the budget in the following four areas.
Of highest priority is increasing wages for direct care workers. The median hourly wage for direct care workers in New York State is $15.14 while the median wage for other occupations in the state with similar or lower entry-level requirements is over $4.00 more. As a result of low wages and limited annual earnings, direct care workers experience tremendous economic instability: 40 percent of direct care workers in New York live in or near poverty and 50 percent rely on public assistance to survive. Low wages also contribute to costly and damaging turnover in this workforce, as direct care workers leave the long-term care field for higher-paying or more stable opportunities. The legislature should consider enacting and fully funding Fair Pay for Home Care — currently the lowest paid segment of the direct-care workforce — and directing the Department of Health to incorporate a living and competitive base wage, indexed to inflation, for all direct care workers into Medicaid rates across long-term care settings.
Advanced roles are crucial to addressing New York’s severe shortage of direct care workers while providing better care to clients and residents. When linked to enhanced training, an elevated title, and higher wages, advanced roles can help strengthen workforce retention, maximize direct care workers’ contributions to care, and achieve quality outcomes and cost savings. The budget’s planned continued investment in the creation of a universal model for training long-term care workers across caregiving roles is a promising step towards increasing career mobility for direct care workers. The legislature could create additional career opportunities in two ways: fully funding the advanced home health aide position, which was created by law in 2016 but never implemented due to cost-prohibitive training and clinical supervision requirements; and fostering interest and uptake in the certified medication aides in residential care facilities pilot.
When linked to enhanced training, an elevated title, and higher wages, advanced roles can help strengthen workforce retention, maximize direct care workers’ contributions to care, and achieve quality outcomes and cost savings.
Reimbursement Rate Increases
All long-term care providers need a reimbursement rate that fully covers the cost of providing services, including fair wages, benefits and training to workers. Considering inflation-related provider cost increases and the need to have sufficient resource to stabilize the direct care workforce, the legislature should review the budget’s proposed rate increase of 5 percent for residential health care facilities to ensure its adequacy. In addition, increased reimbursement rates should go towards investing in better quality and higher-paying jobs to attract people to the direct care workforce across the long-term care spectrum. This means increasing the reimbursement rate for all home- and community-based service (HCBS) providers by ensuring managed long-term care (MLTC) plans can pay HCBS providers a base rate that accounts for their costs. Safeguards to ensure that providers pay a livable and competitive base wage to workers should be in place.
Finally, insufficient data on the direct care workforce in New York makes it difficult to quantify workforce shortages and other challenges, monitor workforce trends over time, design policy and practice interventions, and evaluate their impact. To help address this significant gap, the legislature should consider allocating additional funds to improve the collection, monitoring, reporting, and analyzing of direct care workforce-related information across all long-term care settings.
Governor Hochul’s budget briefing book can be found here.
A recording of the New York State Joint Legislative Public Hearing on 2023 Executive Budget Proposal: Health and Medicaid can be found here.