Caregiving needs for our aging population are booming. Most older people want to age in place, but this is wishful thinking without planning for the logistics of how care will be provided.
Finding good caregivers is the hardest part of delivering care in the home.
Family members provide about two-thirds of the care needed by elders, but at some point, the family members may not be able to handle the load. The family either must use a home health agency or hire private caregivers to provide additional assistance.
How to decide: Agency or private caregivers?
Managing care at home is similar to running a small business.
The family is the employer. The caregivers are employees. For your caregiving “business” to function well, the employees must be given a job description and schedule, managed appropriately, and provided paychecks. The employer must manage the payroll, tax filings, and potential liability such as workman’s compensation insurance and the risk of being sued by employees.
The beauty of hiring an agency is that they take care of all these small business functions.
So, what is the downside?
They may not provide all the services that are needed, and there can be high turnover of caregivers. The agency is paying the employees and taking on the cost of running a business, plus they also want to make a profit. The caregivers usually make about half of what the patient pays the agency.
Hiring private caregivers takes time, effort, and organization, but can lead to both higher patient and caregiver satisfaction. If a patient wants excellent, dedicated caregivers, they should expect to pay the caregivers higher wages than an agency would provide.
How to hire a private caregiver
If a patient plans to go the route of hiring a private caregiver, the first task is to write a clear job description of the expected duties, hours, pay, and benefits.
Caregiving needs vary widely, from just providing companionship all the way to patient transfers, toileting, and bathing. Putting these expectations in the job posting will attract the appropriate applicants. It is helpful to have a home health agency or an aging life care manager assess the situation to help the family clarify the needed services. They can also suggest necessary equipment needed to provide the care safely.
The family should utilize an accountant or payroll service to manage payroll, tax filings, and tax payments. They should also discuss the situation with their insurance agent to put the appropriate liability coverage in place. Good accounting and insurance costs money, but it can prevent a load of problems for both the family and the caregivers.
Managing the small business of caregiving
In addition to having a clear job description, providing daily checklists sets expectations for both the patient and caregiver. Finally, having formal check-ins every couple of months to ensure expectations are being met on both sides can reduce the chance that small problems do not escalate into larger issues.
No matter how care is provided, it is hard work. Setting expectations and creating good processes take time and the reward of providing good care for a loved one is well worth the effort.
— By Carolyn McClanahan, a physician and certified financial planner, and the founder of Life Planning Partners in Jacksonville, Florida. She is a member of the CNBC Financial Advisor Council.