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Fred Benjamin serves as the Chief Operating Officer of Medicalodges, Inc., an employee-owned company that owns and operates over 30 facilities in Kansas, Missouri and Oklahoma, employing over 2,200. This post is adapted from his testimony before the US House of Representatives Committee on Education and the Workforce, subcommittee on workforce Protections on March 14, 2013.
Skilled nursing care providers have critical staffing needs. If you are in the business of caring for our nations’ elderly, it is a daily struggle to find enough dedicated caregivers. We are different from other employers in many ways, responsible for the lives of 1.5 million frail and elderly citizens nationwide. And this is the fastest-growing segment of our population.
The general causes of the staffing shortage include chronic underfunding of Medicare and Medicaid, a regulatory system that focuses on fines and penalties, dramatically increased competition for caregivers, annualized turnover rates of nearly 100 percent, and an aging workforce.
Our industry is almost completely dependent on the government for payment and does not have the ability to raise our prices. Nearly 80 percent of the residents in our facilities are funded through Medicare or Medicaid. An additional 17 percent are spending their life savings until they are poor enough to qualify for Medicaid. Only 3 percent have private insurance.
While we do not have the ability to raise our prices, we also have little ability to reduce our expenditures. The government inspects every nursing home every year to look for errors in compliance with several hundred regulations with fines up to $10,000 per day or closure.
Dedicated staff that work in our facilities are the unsung heroes of the American workforce. The job of caring for the elderly and disabled is one of the most demanding jobs on many levels. Because of the difficulty of the job, and our inability to increase wages or prices, long term care has always been a high turnover industry.
For many, the first reaction is “You aren’t paying enough.” Most people think of nursing homes as a minimum wage employer. This is simply not true. At my company, Medicalodges, certified nurse aides presently receive an average of $11.50 per hour, plus benefits. We regularly review wage rates to ensure that they are competitive.
Nursing centers are not factories. We cannot stop the assembly line or reduce the services to accommodate budget cuts. The elderly we care for depend on us 24-hours, everyday, weekends and holidays. If we have a staff vacancy, we must fill that vacancy. Ms. Johnson will still need help getting dressed and eating in the morning. Mr. Smith will need therapy to help him swallow and learn to walk after a stroke. We need certified nurse aides (CNAs), licensed practical nurses (LPNs) and registered nurses (RNs) to provide skilled services around the clock. Our labor shortage is our most pressing operating problem.
If we are to meet the expectations set for us, policymakers must act now to expand access to new pools of staff. There are many talented immigrants who are anxious to enter the care giving field, yet are faced with insurmountable roadblocks. To increase the supply of labor, special consideration should be given to permitting new entry for immigrants with nursing skills as well as increasing the pool of unskilled labor. We need a new immigration system that serves the economic needs of the U.S. economy.
We struggle every day to ensure that the labor shortage does not negatively affect the quality of care delivered in our facilities. This is a difficult and highly complex balancing act. We need to take a broader look at this staffing crisis and think about the frail and elderly population we serve – our parents, our grandparents, our aunts, our uncles, our neighbors and yours– those special people who have given so much to us and our country. We owe it to them to provide the best possible care, don’t we? Who will care for them if this critical situation is not addressed?
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I strongly concur with Mr. Benjamin’s comments, while our organization provides only in-home care in private residences, we too face inadequate reimbursement from Medicaid. As with nursing facilities, we also face the same level of regulatory requirements and direct support professional needs. As a state and country we must fast address these issues or our families and their loved ones will be at risk. Today the Wall Street Journal and other papers quite accurately detailed these issues will only grow in scope and cost over the next 30 years impacting most if not all of us.