What Is the Hourly Cost for Home Health in 2025?
How Much Does Private Pay Home Care Cost 2025?
What Costs Are Included in the Agency Hourly Bill Rate?
Seniors and their families often comment that the hourly cost of home care is more than they expected. Depending on what region in the country you reside, the hourly cost for private pay home care services through an agency can range between $30 to $45 per hour.
Here in the St. Louis region the current hourly cost for private pay home care through an agency is between $30 to $40 per hour.
With an average rate of $35 per hour, in-home care would cost the following weekly totals.
- For four (4) hours of in-home care, twice weekly, one would spend $280 per week.
- For eight (8) hours of in-home care, five (5) days weekly, one would spend $1400 per week.
- For around-the-clock in-home care, for seven (7) days, one would spend $5,845 per week.
Why is private home care so expensive?
What is included in the agency’s hourly fee?
Livable and Competitive Wages
First, there is a nationwide shortage of qualified in-home caregivers. Google the topic and multiple articles will come up from across the country. Competent and reliable caregivers are in high demand.
Hourly wages for the caregiver are obviously the primary cost included in the billing fee for home care services. Wages for caregivers and employees in various industries have increased significantly since the beginning of the pandemic. Depending on where you reside in the country, caregiver wages have increased from 60-100 percent. In order for an agency to retain competent and reliable staff, an agency must offer a competitive hourly wage.
Recruitment
Recruitment of caregivers requires both considerable time and money. The cost includes advertising and the agency’s administrative time in both placing the recruitment ads and responding to candidates that have answered the ads. It may take 3-5 “reach outs” (text, emails, phone calls) before we actually speak to a candidate that responds to an ad that we have run. These candidates may never be interviewed in person, or at least not for many days or weeks. This may be due to our decision. They may not meet our standards. They may not have the experience we are seeking. They may not own a car to get to and from work. They may have admitted to having a criminal record. After making an appointment, candidates frequently reschedule and unfortunately many “no show” to their interview even though we send out reminders. Thus, recruiting is a big expenditure.
Vetting and Screening
Our agency seeks to hire ethical and honest individuals as caregivers. To do so we take steps to vet job candidates. The cost for vetting and screening each prospective caregiver is included in the hourly cost. Vetting includes such things as
securing a criminal record check, checking the government abuse and neglect list (in Missouri that is called the Family Care Registry), and checking the federal OIG, to make sure the candidate is not on the federal narcotic violators list. And lastly, checking E-verify to make sure candidates are eligible to work in the US.
We cannot tell you how frequently we have pleasant interviews with very experienced candidates and later find out that their criminal record is not clean. Just recently, we interviewed a very pleasant candidate with over 20 years of experience on the phone. We asked her if she had anything in her background that she should share with us before she came in for an in-person interview. She said she did not. She showed up for her interview on time and was dressed appropriately. Shortly after we interviewed her, we received her criminal record report back from the state of Missouri. She had a conviction for theft. We are not sending her or any candidate intentionally into a client’s home knowing they have a criminal record.
Additionally, our agency seeks to hire reliable caregivers, people that show up to work when scheduled. We believe the best way to predict someone’s reliability is based on their past history with other employers. Thus, we check references with legitimate past employers. Yes, former employers are still willing to give honest references. The time and effort to check these references are included in our cost.
Industry Insurances
Do you want your caregivers to be appropriately insured?
*Worker’s Compensation insurance? Worker’s compensation is required by federal law. This insurance protects the worker if they are injured on the job performing a job task. It covers their medical care and lost wages.
*Professional Liability insurance? Protects the client if they are injured due to the action of a caregiver, and it provides coverage for damages that might occur to the home due to the caregiver’s actions. Years ago, while a caregiver was cooking a meal for the client, a kitchen fire occurred and our insurance covered the entire cost of repairs.
*Dishonesty bond? This provides the client protection if a caregiver is charged with a theft while in the home of a client. These various insurance costs are included in the agency’s hourly bill rate.
Various Taxes: Unemployment Taxes
Agencies that hire their staff as W-2 employees (and not as 1099 contractors) are required to pay a “matching” tax called FICA. By matching, we mean the employee and the employer each pay a little under 8 percent of the employee’s wages towards Social Security and Medicare.
Employers are required to pay both federal and state unemployment taxes. The federal tax is called FUTA and the state-based tax is called SUTA. This tax provides weekly income to a former employee (after working for the agency) if they are unemployed due to no fault of their own.
Training & Mentoring
The agency provides required and ongoing training to agency caregivers. We also have in-home mentors who provide education on performing specialized tasks in the home for newly hired caregivers. The training might be provided by a seasoned/lead agency caregiver or an agency nursing supervisor.
Efficient system for scheduling, monitoring attendance and billing of services
Most agencies have digital methods for monitoring their staff’s arrival at the correct location, their departure, and attendance in general. This is called EVV or Electronic Visit Verification. StaffLink uses software called WellSky. Our staff are scheduled via WellSky. We are able to digitally monitor attendance, and we bill our clients for services using WellSky. At this time, our agency still asks our clients to review and sign a timesheet documenting our staff’s attendance as well. WellSky and other software support systems charge a monthly fee for the agency’s usage.
Replacement Caregivers
Most agencies work to retain a pool of back-up staff that they can call on when unexpected or expected openings or cancellations occur. Retaining such a pool has become increasingly challenging in the current post-pandemic job market. Maintaining that pool of back-up staff and replenishing it requires an agency to use several methods to stay in touch with their current and potential caregivers. Social media, emails, newsletters, and mass text messages are a sampling of these methods. All require dedicated administrative time, attention, and resources.
Care Plan Development, Oversight and Ongoing Supervision
StaffLink’s Care/Case Managers, either a nurse or social worker, initially meet with the client and their family to discuss the client’s status and desired care and outcomes. Our Care/Case Managers will prepare a care plan for our caregivers to follow. Supervision of the client’s care and the caregivers themselves is the agency’s ongoing responsibility.
Private home health care is expensive. The cost has significantly increased since the beginning of the pandemic. Hourly pay to the caregivers is the primary reason, however, as this blog lays out, there are other costs that agencies are required to include. Furthermore, there are additional costs that agencies choose to take on when desiring to deliver the highest level of care.
We hope this information is helpful in better understanding the cost and services delivered by top-notch home care agencies.
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