The future of U.S. caregiving: High demand, scarce workers

(The opinions expressed here are those of the author, a columnist for Reuters)

A care nurse prepares glasses of water and syrup for elderly people in the living room of a retirement home in Bordeaux, southwestern France, June 30, 2015. REUTERS/Regis Duvignau

CHICAGO (Reuters) - If you are hovering around retirement age today, you will be closing in on your eighties in the year 2030. With any luck, you will be healthy and mobile - but imagine for a moment that you are not. Let’s say a debilitating illness requires that you receive care in a nursing home.

It is an unsettling future to imagine. But now ask yourself this - who will take care of you? The United States is headed toward a severe shortage of caregivers - paid and unpaid - in the decades ahead, according to human resources expert Paul Osterman. A professor of human resources and management at the Massachusetts Institute of Technology’s Sloan School of Management, Osterman is the author of a new book, “Who Will Care for Us: Long-term Care and the Long-Term Workforce” (Russell Sage Foundation, 2017), which examines trends in the labor force market for caregivers.

His conclusion? “It’s an absolute train wreck waiting to happen.”

Our aging population will push up demand, although Osterman notes that roughly half of demand for care will come from younger, disabled people.

He examines the projected rising demand for care in the coming decades, and then matches up the demand side with trends in the labor force for paid certified nursing assistants (CNAs) and home care workers, including the availability of unpaid family and friends - the most common source of care for many people.

He finds that in 2030 there will be a national shortage of 151,000 paid direct care workers and 3.8 million unpaid family caregivers. By 2040, the shortfall will be much larger: 355,000 paid workers, and the family and friends shortfall will be a shocking 11 million.

“These are conservative estimates,” Osterman said in an interview. “They assume no changes in immigration policies, and that family members will be willing to provide care at the same rate they do today - that’s not likely, due to smaller families and more geographic dispersion.” If family caregivers become more scarce, that can only put further pressure on demand for paid care.


The Trump administration’s crackdown on immigration in the United States will only worsen the situation. In 2015, 18 percent of CNAs and 27 percent of home care aides were immigrants, Osterman estimated, citing Census data. Among immigrant home aides, 24 percent each come from Central America and Asia, 23 percent come from the Caribbean and 10 percent are from Africa.

But he cautions that the impact of a shrinking immigrant labor pool will be uneven, due to the huge variation in immigration patterns among the states. “New York and California have very large immigrant populations, but it would probably have very little impact in a state like Ohio,” he said.

The highest percentages of home care aides who are immigrants are found in New York (64 percent), New Jersey (47 percent) California (46 percent), Florida (38 percent) and Texas (22 percent). By contrast, just 8 percent of the home care aide workforce in Ohio are immigrants; in Georgia, the figure is 12 percent.

Osterman also does not believe a crackdown on undocumented workers would affect the caregiving labor market much. Young men make up a very large part of the undocumented population and nationally, nearly 90 percent of direct care workers are female. “Undocumented workers as a group are unlikely to be a dominant source of labor for these jobs,” he said.

Caregivers earn very low wages - median income for CNAs in 2015 was $20,000, and home care aides earned a median of $15,000, according to Census data. Normally, a labor shortage would resolve itself by putting upward pressure on wages - which would bring more workers into the field. But in this case, the impact on wages - and the caregiving shortage - will be uneven, Osterman said.

Two-thirds of long-term care in the United States is funded by the federal Medicaid program, with the remainder paid through private commercial insurance or out of pocket. Medicaid payment policies vary widely among the states, but Osterman worries that in many states, care facilities funded by cash-strapped Medicaid programs will not be able to boost wages.

“It’s difficult for wages to rise because they are set bureaucratically according to Medicaid reimbursement rates,” he said. Meanwhile, wages in the high-end private payer market will rise, with a corresponding impact on the cost of care and insurance.

Osterman’s book is not completely doom and gloom. He holds out hope that we can attract more workers to caregiving by making the occupation more attractive. One needed change, he said, is attitudinal. Many key actors in the profession - doctors, hospitals, regulators, legislators and insurance companies - simply do not demonstrate respect for direct care workers, which is an obstacle to improving the job.

The second challenge, he writes, is the complexity of our care delivery system and its financing mechanisms, both of which make reforms difficult to implement.

Osterman also argues for restructuring the roles of caregivers. Currently, new caregiving workers receive only about two weeks of job training; expanding that could open the door to broader responsibilities.

“In some states, a caregiver can’t administer eye drops, or help with wound care,” he said. He thinks caregiving workers could be trained to help with responsibilities like physical therapy, or coaching people with diabetes on eating and exercise.

That could attract more workers, he thinks, and save money in the healthcare system by shifting tasks away from higher-paid workers such as nurses.

“The point of my book is not to be nice,” he said. “It’s really a financial case for doing this, and an argument for an important social policy.”

Editing by Matthew Lewis