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We Can Do Better—During COVID-19 and Beyond

April 28, 2020

Last week, PHI released We Can Do Better: How Our Broken Long-Term Care System Undermines Care, the second report in our Caring for the Future report series. Building from the first report—which profiled the direct care workforce in terms of size, demographics, and job quality concerns—We Can Do Better examines the U.S. long-term care system and the various factors shaping the direct care workforce, including financing trends, industry characteristics, and key players.

Our intention with this report was to explore the reasons why the long-term care system is unprepared to meet the growing demand for long-term care services. Given the COVID-19 pandemic, We Can Do Better now has a new, more immediate purpose—it highlights the various ways that a poorly designed long-term care system has hindered the national response to the present crisis.

Here are three findings from We Can Do Better to help understand the current moment and how to re-shape the future of long-term care.

We Cannot Financially Afford a Strong Response to the Pandemic

Typically, people who begin needing paid long-term care must spend down their savings and assets until they become eligible to enroll in Medicaid. For this reason, Medicaid is by default the primary payer in long-term care. However, unlike Medicare or Social Security, Medicaid programs are primarily funded by states, leaving them vulnerable to cuts or rate freezes every budget season. Limited state-level funding leads to low payments to providers (such as nursing homes and home care agencies). These employers in turn cannot afford to compensate direct care workers properly, which contributes to a growing workforce shortage across long-term care.

During this pandemic, under-resourced state Medicaid programs don’t have the resources or flexibility to cover urgent needs such as hazard pay, overtime pay, paid time off, and personal protective equipment (PPE) for the direct care workforce. In the short-term, states should follow Arkansas’s example, and make targeted investments to raise compensation for workers on the frontlines in long-term care. In the long run, we need a well-financed long-term care system that supports both consumers and workers—one that can withstand any crisis.

A Disorganized Industry Makes Managing a Crisis Nearly Impossible

Our new analysis of the U.S. Economic Census reveals that as the long-term industry grew, it became increasingly fragmented. From 2007 to 2017, long-term care added 34,700 new establishments—including 22,200 in home care, 12,000 in residential care, and 600 in nursing homes. Compared to nursing homes, home care and residential care establishments employ fewer workers per establishment and are less likely to be licensed by states. The disjointed relationship between states and these large, diffuse segments of the long-term care industry hampers large-scale workforce development efforts.

This systemic challenge has been eminently clear since the pandemic began. Coordinating a quick response to the pandemic within home care and residential care has been almost impossible. Due to a lack of information and oversight regarding staffing, supplies, training, and more, government and industry actors have not been able to rapidly identify where resources are needed most within this system—and respond appropriately.

As described in We Can Do Better, a first step toward strengthening the oversight and coordination of home care and residential care settings would be to implement licensing standards across the long-term care continuum. With such standards in place, it would be more feasible to implement sector-wide strategies that support workers and consumers in times of crisis and beyond.

Key Actors Struggle to Coordinate Their Efforts

We Can Do Better describes the many different actors that shape direct care job quality. State and federal policymakers—and private managed care plans, to some extent—regulate the direct care workforce and determine funding levels for long-term care providers, largely through Medicaid reimbursement rates. Individual employers recruit and manage workers and implement workforce supports. Unions, Centers for Independent Living, and fiscal management service providers also play an indirect role in shaping job quality.

When a crisis hits, these various players should ideally work together and complement each other to improve both jobs and care. Unfortunately, we’re seeing the opposite during the COVID-19 crisis. As one striking example, the inadequate federal response to the shortage of PPE during COVID-19 has ravaged the long-term care system, leaving states to compete against each other to purchase PPE and providers desperate for supplies. This lack of coordination has made it impossible to provide direct care workers and consumers with the protection they need. Addressing this crisis requires leadership and collaboration at every level in the long-term care system.

We Can Do Better makes it clear that strengthening the workforce and shoring up consumers’ access to care will require major reforms throughout the long-term care system. The COVID-19 pandemic emphasizes that these reforms are both long overdue and immediately necessary.

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