Are Home Care Agencies Obsolete?

Posted on September 24, 2015

Personalized Home Care

Personalized Home Care

Recent changes in the employment and regulatory market have made hiring caregivers through an agency financially more difficult for families.

In response, many people have turned to the internet marketplace to essentially, ‘place an order’ for a caregiver ‘at cost’, leaving the traditional agency out of the entire transaction. This begs the question, ‘Are Home Care Agencies Obsolete?’.

Are Home Care Agencies Obsolete? We say, ABSOLUTELY NOT! What a family gets with a reputable home care agency is immeasurable. Quality home care is not a mail-order industry, where you pick a caregiver out of a catalog. Home Care is a very intimate business that requires a personal touch and oversight with experience and accountability. While it is true, going to the website catalogs, that claim to have 1000s of caregivers, may be cheaper, it is important to understand what it is that the agency actually does in order to provide peace of mind and the best home care experience possible for your family.

A common reason for going to the online marketplace that agencies are running away with huge margins, while underpaying caregivers. The truth is that the industry standard for a ‘profitable’ agency is between a 13% and 17% margin. Much of what an agency charges goes into overhead and activities, performed on the client’s behalf:

For the Caregivers:

  • Background Screening
  • Reference and Employment Checks
  • In-Person Interviews
  • Psychological Testing
  • Skill Testing
  • Verification of Certifications
  • On-going Training

For the Client:

  • Initial In-home Assessment
  • Custom Care Plan
  • Care Coordination – lining up additional services that could be needed, in the local area and collaboration with services already in place such as hospice or home health
  • On-going Case Management:
    • When condition of the client has changed the Care Coordination will update the Care Plan and seek additional community resources
    • Regular revision of Care Notes submitted by Caregivers to detect any patterns that would indicate the need for a re-assessment of the client’s condition.
  • Recommendation of caregivers that would work best in each individual situation, based on interview, client satisfaction surveys and CareProfiler questionnaire
  • Terminating Caregiver services, on behalf of the client
  • Scheduling/Replacing Caregivers – due to illness or otherwise

Payroll and Human Resources Services:

  • Obtaining w-4 and I-9 and registering that information with the IRS within 10 days
  • Payroll
  • Employer Taxes
  • Unemployment Insurance Payments
  • Worker’s Comp Payments
  • Handling wage assignments
  • Handling unemployment claims
  • Handling any government paperwork that comes in on behalf of the caregiver
  • Providing for paid sick leave (mandated – 3 days a year)
  • Assuring TB clearance
  • Assuring ongoing training
  • Maintaining a drug-free environment through random drug testing
  • Maintaining a General and Professional Liability Insurance policy
  • Bonding – not attainable by an independent caregiver

Yes, you can get a caregiver from the online catalog for $12/hour, but you DO become the employer and are responsible for all of the items listed in our Payroll and Human Resources section above. When properly paying an employee, that $12/h becomes more like $17/h.  While, no doubt, people will try to avoid the “employer” status by claiming a caregiver is independent, it is a dangerous thing to do. If you are paying your caregiver directly AND directing them on how to do their job, YOU ARE THE EMPLOYER. ONE claim to Unemployment or the Labor Board by that caregiver, can have a domino effect, inviting all employer regulatory agencies to come knocking on your door, resulting in audits and fines, and very likely, unwanted IRS attention.

When you pay an agency like Constant Companions Home Care, you are not just paying for a caregiver, your are paying for customized care, oversight and follow-through. Your are also transferring the burdens of being an employer and all that entails so that you can focus your attention on what matters most, your loved one.

Written by Gabriela Brown
Owner, Constant Companions Home Care

Constant Companions Home Care has been providing quality home care since 2003 to the residents of San Diego, Fallbrook, Escondido, Rancho Bernardo, Poway, Temecula, Murrieta, Menifee, Hemet and Riverside.

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