Caregiver crisis

A deepening shortage of caregivers negatively affects levels of service available to older adults.
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Amid reports that complaints against Wisconsin nursing homes could surpass a record number filed last year as the state struggles to find enough nurses and nursing-home inspectors, all businesses that serve aging populations can relate to workforce shortages. Approximately two out of every five nursing homes in Wisconsin report a shortage of nurses as facilities continue to deal with the effects of COVID-19, which has left some facilities without enough staff to properly care for residents.

Based on our conversations with retirement communities, retirement planning services, residential transition, and commercial building designers, every business entity is short of personnel. These shortages are examined in a recent study by the Wisconsin Assisted Living Association, which assessed the labor situation in assisted living, memory care, and nursing homes throughout the state. The organization issued a report titled “The Long-Term Care Workforce Crisis: A 2022 Report,” which notes the need for long-term care is growing as the workforce is shrinking. The industry has more than 23,000 open caregiver vacancies in 2022 compared with 20,655 in 2020, and 28% of all caregiver openings now are vacant.

“The caregiver crisis, the staffing crisis in long-term care facilities, particularly in assisted living facilities, keeps getting worse,” states Mike Pochowski, president and CEO of the Wisconsin Assisted Living Association. “I would say it’s getting exponentially worse.”

The situation was made worse by the stress and the unknowns associated with COVID-19, the workforce changes caused by the pandemic, and growing opportunities to work remotely in other industries. Long-term care facilities, Pochowski notes, were among the first to be hit by COVID-19 cases, and nobody wanted to pass it along to their families outside of the work environment. “There are a number of professions and industries that now have more remote work opportunities, and so when you’re working in a long-term care facility, those are all places where it’s in-person all the time,” Pochowski explains. “That makes it a little bit difficult.”

Remote work isn’t the only advantage other industries have, especially in a period of higher inflation. The way that the state Family Care Program is set up to help serve the Medicaid population in Wisconsin, it’s not able to quickly react to economic trends with higher pay for caregivers because its budget is based on the state budget, and there is no way to infuse extra dollars into the program once that budget is finalized. In contrast, other industries quickly react to economic factors such as inflation and increase their wages. As a result, the median wage offered to non-health care employees is 24.7% higher than the starting wage offered to certified nursing assistants (CNAs).

Some help is on the way in the form of additional state dollars, but the workforce situation affects care facilities and every type of business that serves older adults. In this look at the business of aging, we spoke to several executives and professionals who provide services to those who are approaching or already in retirement.

Oakwood Village: The long view

Oakwood Village, a retirement community with two local campuses, Prairie Ridge and University Woods, is part of Oakwood Lutheran Senior Ministries. Oakwood Village now serves 700 tenants between the two campuses with 500 employees, but a shortage of workers — particularly registered nurses and licensed staff — remains its biggest business challenge. It could easily employ 20–25 more full- and part-time people. “I don’t think you’ll talk to anyone like me, anywhere in the country today, who wouldn’t tell you that’s the biggest challenge they’ve got,” says CEO Reg Hislop.

Its business model includes fees that depend on the level of care chosen by residents. Residents of independent living units, about 70% of Oakwood’s population, receive housing, utilities, meals, housekeeping, and other amenities for a fixed monthly fee, and for anything extra, they pay as they go. For the assisted living residents, roughly 25% of the population, it depends on their care levels and care needs, but all services are provided, including nursing care. “Medications and medical supplies are separate, and there is a similar arrangement in the nursing homes, where again, all of the care is provided for a monthly fee and medications, etc., are separate,” Hislop says. “The majority of our nursing care residents [10% of the total] are reimbursed through either Medicare, Medicaid, or private insurance.”

While Hislop sees no immediate challenges to Oakwood’s revenue streams, one concern over the next year or two pertains to costs rising faster than residents’ income growth and wealth growth. While many of them will be hurt by weakening market conditions, they will see some investment growth and pension growth. “A lot of our residents are former UW faculty, so they will see some increases on the pension side as well as in Social Security,” Hislop notes, “but we must be mindful of what those are in relationship to what our cost growth has been.”

Revenues are up year over year, he adds, and occupancy rates are strong. “We’re well in the 90 percentiles in all of our products, so our challenge is really 100% on the expense side, and all of that challenge, for all intents and purposes today, is labor.”

Hislop is not worried about inflation causing upward wage pressure on Oakwood’s skilled nursing staff. “Not inflation, just scarcity,” he says. “We have openings right now in agency contracts that are over $100 an hour and they can’t be filled, so you can see the magnitude of what we’re dealing with. It’s not even a wage issue. We can pay enough. There just aren’t enough bodies out there.”

Prior to the pandemic, the nursing program expansion at Wisconsin colleges and universities helped to an extent, but pandemic and retirement attrition have added to the challenge, and Hislop notes that health care providers and retirement communities aren’t the only local organizations looking to hire nurses. “Madison is a great market, so there is plenty of opportunity for nurses,” he notes. “It isn’t just the bedside stuff. You’ve got Epic that hires nurses. You’ve got the insurance companies, AmFam, WPS, the clinics, and others. They all use nurses, so there are a lot of openings and not enough bodies regardless.”

The shortage not only taxes management, but it also impacts work-life balance and mental health of the care staff. Hislop notes that one of the issues UW nurses had in their recent labor dispute was work-life balance. “Some wages, but a lot of it was work related in terms of staffing and mandatory overtime and so on. That’s a huge issue and the solution isn’t necessarily something an organization like Oakwood has. I would love to have more staff. I would love to have less volatility around the labor pool day in and day out.”

As it prepares to observe its 75th anniversary in 2023, Oakwood Village is building a new nursing home, the 60-bed Hebron Oaks Skilled Nursing and Rehabilitation Center, to replace an aging facility. “We’re in it for the long haul,” Hislop says, “so, we’re playing a long game. We’d love things to be different, but we’re not going to panic. We’re going to continue to invest in our staff and our facilities and believe there has got to be light at the end of the tunnel.”

Capitol Lakes: Writing on the wall

Just a few blocks west of the Capitol Square stands the Capitol Lakes retirement community, which has 153 apartment homes for independent living, 42 assisted living and memory care beds, and until recently had 55 skilled nursing [nursing home] beds. “Our fiscal year starts Oct. 1, and we’re downsizing to 36,” says Tim Conroy, executive director of Capitol Lakes. “The main reason is lack of staff and then the other reason is fewer and fewer people are using nursing homes, and we see the writing on the wall.”

Conroy’s biggest operational challenge is finding people to work as caregivers. The positions he most needs to fill are CNAs, who work in skilled nursing, and resident assistants who work in assisted living. “It’s been an enormous problem for us in the past year at least,” Conroy states. “We can’t even admit as many residents as we want because we don’t have enough people to care for them safely.”

Not every position requires a nursing degree. Resident assistants, for example, can be trained by the facility — a certain level of state-mandated training is required — but historically, Capitol Lakes has employed UW–Madison students because they live close by, many are in an academic major with a health care component, and they need hands-on experience. Certified nursing assistants don’t require a degree, but they do need to complete some classes that Capitol Lakes is working to offer. “There are all sorts of new ways to do it, but there are just not enough people to enroll,” Conroy notes.

Even with those challenges, Conroy concedes that Capitol Lakes has an advantage when it comes to finding workers. Independent living residents pay an entrance fee and then a monthly fee based on the square footage of their residence, and prospective residents are invited to explore pricing on the Capitol Lakes website. Since a number of its residents can pay privately, the facility is not beholden to low rates put forth by Medicaid, the government health care program for lower-income people that is jointly funded by the states and the federal government. “We have Medicaid patients here, and we care for them, but we can offer better benefits and pay people more,” Conroy notes, “and part of that is because we’re a nonprofit and we’re not putting the money into an owner’s pocket.”

The situation is much harder for care facilities in rural areas that rely on Medicaid funding, he adds, because a private entity such as Kwik Trip pays more than a nursing home, “and it’s a lot easier to work at Kwik Trip than a nursing home.”

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A shortage of caregivers has forced the Capitol Lakes retirement community to reduce its number of nursing home beds.

Fortunately, the state plans a 26% funding increase for Medicaid, which Conroy calls “phenomenal” because Wisconsin is the second lowest state for Medicaid reimbursement rates for nursing homes. “So, it’s a wonderful increase, but we still lose money every day on every Medicaid resident that we have,” he notes.

With inflation running at 8–9%, it’s impossible for Capitol Lakes as an employer to match inflation with wage increases. “Our biggest cost is our people, which is very important, but we can’t match inflation,” Conroy states, “and then, our residents are footing the bill for inflation too, so then their rates go up to pay for the staff. One of the reasons we’re reducing the size of the nursing home is that when we were forming our budget, it was a way to counteract inflation by saying, ‘You know what? We can give people better raises and control costs by doing this.’”

On the revenue side, a recession could ease the labor situation, but it could hurt a retirement facility’s “move-ins” if the price of a home goes down or investment portfolios take a hit because of stock market declines. “That’s less money for people to live on during retirement,” Conroy notes.

A sensible immigration system could help provide more caregivers, but that would require better coordination between government and industry. “There are just not enough people anymore,” Conroy laments. “We’ve known that this demographic shift has been coming for decades. COVID sped it up and now we’re in trouble. Every industry is affected.”

Cairasu Home Care: Waiting referrals

Based on conversations with local realty executives, one of the reasons for the historically low inventory of homes available for sale is that more baby boomers are choosing to age in place. While that’s bad news for people who sell homes, it’s great news for businesses that provide home health care. One of those businesses is Cairasu Home Care. At Cairasu, owner and Manager Fatou Ceesay employs 13 full-time and 51 part-time people, but she has room for more caregivers, especially after losing staff during the pandemic. Cairasu is understaffed to the point where it has put some patient referrals on a waiting list, “which is not the norm for us,” Ceesay states. “We have not been doing that before, but that’s what we experienced due to the worker shortage.

“For us, it’s hard because we work with the public system as well, so if the reimbursements are not up, it’s hard to get wages to the point where it’s more satisfactory to the caregivers as well, and I understand that,” she adds. “This is not an easy job. It deserves a wage that is supportive of the workers, but that’s the challenge.”

The level of education required of home caregivers is not as high as nurses, but it varies. Some clients simply need companionship, others require full-service care, and others need something in between. To hire more people with the required skills, Cairasu is taking the training upon itself, in part because Ceesay believes that caregiving is a legitimate career choice, especially for people who want a steppingstone to the health care industry. “One of our new programs would be the CNA training,” Ceesay states. “We can train other staff, not just within Cairasu, but anybody interested in becoming a CNA and train them in dementia care as well so that they are more skilled and certified in the field. They can continue to work for us and work for other agencies, other associations where we can staff them because we do staffing as well.”

Retirement enablers

Premier Retirement Partners is a Madison-based, third-party administration firm that provides retirement plan design and administration for approximately 1,000 client employers, including participant directed 401(k), 403(b), 457 plans, and other types of qualified retirement plans. Established in 2005, PRP was previously known as Alliance Benefit Group Wisconsin and has 12 employees in Madison.

At the risk of sounding like a broken record, Principal Paul Stang cites hiring and staffing among the firm’s biggest operational challenges, but he adds training and retaining to the list. Still, he recognizes an advantage of operating in Dane County, which has a positive net migration of people. “There are people actually moving in,” he states. “I feel sorry for people in these remote counties because the kids go away to school and never come back.”

The skill set he’s always looking for is “numbers people,” and so PRP competes with the CPA firms or any employer that needs them. “We’re a small firm, so it’s not easy to compete with an Epic or Exact Sciences that has thousands of employees, but not everybody wants to work for a big company,” Stang notes.

The firm does not offer financial advice, it works with employers to design retirement plans. Its fees are a combination of hard-dollar fees and to a lesser extent asset-based fees, and much of its business development is predicated on the number of participants in a 401(k) plan. More participants mean more work for the firm. “What we talk about [with clients] isn’t investments, it’s plan design,” Stang notes. “Whether companies are growing or shrinking, what is the right plan for you?”

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For facilities that serve older adults, help is on the way in the form of increased Medicaid payments from the state of Wisconsin and expanded caregiver training and recruitment in organizations such as UnityPoint Health–Meriter and UW Health.

So far, inflation has not impacted PRP that much. Stang looks across the industry and sees similar firms raising fees, which in his view is a bad idea if the stock market is declining. “In some cases, it’s opportunistic because when inflation comes in, [firms say] ‘we have to pay our staff more, so we’re going to raise our fees more.’ A company like ours, we haven’t changed our fees since 2005 when we opened the door, but it certainly provides an opportunity for me to do so when inflation is 8% instead of 2%.”

At some point, he concedes that PRP will have to raise fees because of the need to compensate staff with inflation plus a merit increase. “We could be talking about a 10% increase in pay, right? We’re a small company, and two-thirds of my entire budget is compensation — 60 or 70% is compensation,” he notes. “Every white-collar business is that way.”

The firm has contemplated getting into other areas of benefits administration, but with the size of its client base, it’s busy enough with retirement plans. PRP doesn’t want to compete with financial firms because they help bring business, and Stang is basically a one-man salesforce while other employees focus on servicing clients.

There is plenty of interest in PRP from prospective buyers, and Stang is of the age where he thinks about retirement, but he likes working. “I like to say I’m the least important person in the organization because the other 11 people do the work,” he states. “So, if you take me out, it might affect new business [development], but it doesn’t affect servicing existing clients.”

Stang has talked to employees about selling the business to them, but they like their jobs too much to take on management responsibilities, especially if they are raising a family. Among his fellow business executives, he’s not alone in that department. “I’ve talked to people in other businesses, and they also say that they offered to sell to the staff, and they said, ‘no thanks,’” he recounts. “They say, ‘You know, we like doing our jobs and we see all the problems you have with trying to hire, handle insurance, staffing, and all those things.’”

The pandemic and his staff’s growing need for work-life balance have played a role in being more flexible about allowing remote work. It has become a necessity, but Stang worries about a negative impact on customer service in an era where it’s already compromised in other industries.

Greg Monday, a family business attorney and shareholder in the Madison office of Reinhart Boerner Van Deuren, has a related business — succession planning — as part of his law practice. The pandemic caused some businesspeople to delay their planned succession, but now more people are getting serious about retirement.

“During my 30 years of practicing, I’ve seen my family business clients retiring maybe 10 years later than they should have, and there were a lot of clients who put off retiring because of the pandemic,” Monday says. “They were trying to retire, but they didn’t want to hand off to the next generation or to their successors in the middle of a crisis.”

The other way these crises have affected Monday’s clients is they were more open to implementing and following good governance structures, including a formal means of decision making. “A lot of the senior generation owners I’m working with, some of them are founders but some of them are just very successful businesspeople who have been at it for 30 or 40 years,” he notes. “A lot of times, they make their decisions on an ad hoc basis, or they do it based on their gut feeling, and I was really impressed at the way those business owners, just across the board, made these amazing decisions during the pandemic — something they had never experienced before — and they were able to respond and keep their businesses going. A lot of them had very successful years.”

When it comes to serving an aging client base, there are special business challenges, but what Monday has come to appreciate most is the need for post-retirement relevance. “Given that they have put so much time over the past 30 or 40 years into their business and their career, they might not have made time to develop other interests or other opportunities, and I would suggest that the advisors be sensitive to that need,” he counsels. “A person has to have a purpose and they should understand that and realize that a senior generation owner may hang on a little bit longer because they are afraid of what comes next, and they don’t have a plan for that part of it.”

To many, the hardest part of aging is not one’s own health challenges, but seeing friends and loved ones suffer and pass away. Prior to COVID-19, Betty Harris Custer, founding managing partner and owner of Custer Financial Services, had already seen a succession plan fail to jell, but the 40 clients she lost in the early stages of the pandemic also took a toll. Financial planning involves relationship-building, and Custer and others in this line of work get close to many clients.

Custer, 74, has roughly 1,600 clients, many of whom she meets with on a regular basis. While 40 out of 1,600 sound like a small percentage, it was many more than she normally sees. “I really felt the senior generation was being impacted heavily by this,” Custer states. “Whether they actually got COVID themselves or died with COVID, we saw a few of our clients where that was listed as one of the causes of death. But for many of them, it was also just a dramatic change in their lives. More than probably any other generation, even when people started feeling that they could go back out to restaurants or go back to work, seniors haven’t been doing that well.”

For wealth managers, one advantage of having older clientele is they have seen almost everything except a pandemic, and so there is less panic. Given the roller coaster ride the stock market is taking due to the pandemic, the initial V-shaped recovery afterward, inflation, higher interest rates, and now a slowing economy, Custer hasn’t had to talk many older adults off the ledge. The key to that is frequent communication. “With some of our top clients, we’re talking to them at least quarterly if not monthly, but we haven’t seen a huge increase of people saying, ‘Oh, the market just went down 300 points. What does this mean?’”

It means that this is a once-in-a-century phenomenon of coming out of a pandemic, complete with supply chain disruptions, and there are no economic blueprints to follow. “We’re not talking about a normal environment,” Custer notes. “This whole supply chain thing has come up, started because of COVID, and it’s been made worse by inflation and the fact that employers want to hire 11 million people and there are not 11 million people who want to be hired.”

Moving forward: Downsizing’s upside

Marianne Gariti, president and owner of Moving Forward, has known since college that she wanted to work with older adults, and when she heard about an association of senior move managers whose goal is help them downsize and move, she knew how she was going to serve them.

Gariti started the dementia-friendly business in 2014, and still finds that people don’t realize how big a job transitioning to another type of home environment is, especially if they have lived in the same home for decades. “As the downsizing and moving process unfolds, it is common to have clients ask us to continue with more tasks than initially anticipated,” she notes.

With a service that organizes, packs, and eventually moves items, the process can take mere days. Going through a home room by room and jettisoning things with an 80/20 rule is one thing, but helping older adults navigate the emotional issues related to leaving their long-time home is another. “We typically start with a floor plan,” Gariti explains. “Once we identify the space, we have discussions with our clients about items they most use and love … We tag the items and make sure the items they really use, and need, will be identified and packed.

“From there, we often have a ‘maybe’ area,” she adds. “It is common that our clients will initially think they need an item but as the process unfolds, they realize they can part with it.”

Moving Forward works with nonprofits to donate discarded items and with referral partners such as realtors and retirement communities. At times, it helps clients age in place, but it’s more common to have a family member call and say that mom fell and needs to move.

Price depends on the level of need; the service does as much or as little as needed, and most clients pay as they go. Some choose to pay when they sell their home. “Sometimes the price is a little higher than they might think, but we’re in the same line as what a typical moving company would charge,” Gariti says. “The thing is we work a lot more hours. We could be helping a family for 100 hours or 200 hours, so it just depends on what they need.”

The business operates in Wisconsin and Arizona, but most business is done in Dane County. Expansion, if it comes, will not be done by franchising but simply opening in other areas.

CLE Consulting: Short on material

The biggest challenges Dawn McIntosh has with CLE Consulting, a local building and remodeling company that designs age-in-place housing, are the shortage of labor — it employs four internally and works with 90 subcontractors in the field — and the long delay in receiving building materials. Manufacturers still are behind on production, and the company is experiencing long delays in getting materials even though the cost of lumber has come down. “Nobody can keep up with the last three years,” McIntosh states.

Thanks to the university and the continuing growth of employers like Epic, future projects for multifamily housing are robust, especially downtown. However, CLE just finished Holland Fields LLC, an aging-in-place condominium in Windsor, Wisconsin, and its next big project will be built in Stoughton, which is mass-density housing with two-story duplexes.

Construction goes on despite inflation and higher interest rates, but the high cost of most materials is putting some projects on hold until developers see what the market will do in the first quarter of 2023. These economic conditions are impacting older adults as well, especially if they had been in position to do cash sales, but McIntosh says the way to respond as the market slows is to focus on the product that makes sense for her company.

“For us, that’s the aging-in-place market,” she states. “We can make sure we’re presenting those properties to our buyers and designing those so that they fit their needs, and that has been our focus for quite a while. We’re in a good spot with that, but again, with the stock market affecting a lot of people’s savings, it’s challenging for people to do cash sales.”

Making suggestions

To help address the caregiver crisis, the Wisconsin Assisted Living Association has called for systemic payment reform, reducing administrative burdens (paperwork) for caregivers, more investment on technology to improve operational efficiency and alleviate burdens on workers, regulatory reform to allow more nurse aides to be trained in Wisconsin, and immigration reform to expand the pool of caregivers.

The training piece is a key one. Madison College Dean of Nursing Kerri Kliminski told WKOW that prior to the COVID-19 pandemic, the college received 900–950 applications a year for its nursing programs. This year, it received almost 1,500 applications, and every one of the students who graduated in May has secured a job. UnityPoint Health-Meriter recently announced plans to build a training center and expand efforts to recruit nurses and train other workers, and UW Health plans to expand nursing recruitment and community-based health care apprenticeships, but more still needs to be done.

So far, Pochowski is encouraged by the bipartisan response of the state Legislature and Gov. Tony Evers, including two substantial rate increases into the Family Care Program. “We’re having those conversations with state legislators right now,” Pochowski states, “and we’ll definitely ramp up those efforts once the new [legislative] session starts.”

Are older adults still urbane?

Whatever happened to that pre-pandemic trend of older adults moving to urban areas, especially downtown and densely populated areas, to enjoy big-city amenities? After COVID, the trend’s remaining strength is the subject of some debate, but truth be told, downtown Madison has always attracted a mix of young, middle age, and old.

Older adults tend to heavily populate condos with higher price points, according to Anna Trull, a broker associate with Stark Company Realtors. The graying momentum has shifted but not necessarily because the trend was adversely affected by COVID, given the heightened vulnerability to the virus of older adults, but by local real estate market forces.

Interviewed in early October, Trull noted the tight real estate market applies to condos as well as homes. “Granted, there is not a ton of data just because we haven’t had a lot of listings, especially downtown,” she stated. “Right now, when you look at active listings, there are only 13 downtown condos available. There has not been any new development downtown, and there is a lot of demand to be downtown, but from all generations really.”

There certainly is no lack of condominiums in downtown Madison. You can rattle them off one by one — The Baskerville, Capitol West, the Loraine, Metropolitan Place, etc. — and there are retirement communities in the central core such as Capitol Lakes. Others are farther out but near attractions — The Renaissance, for example, is located near Hilldale — and proximity to amenities is the key to any facility for older adults.

Dawn McIntosh, president and CEO of CLE Consulting, which designs and builds residences that allow people to age in place, believes the urban trend is running its course. “In our experience, the seniors we’re working on projects for are in the outskirts of Dane County, and they are more in these neighborhoods where they have amenities and a yard, a patio and a yard,” she notes. “We find that we’re doing more construction outside of the city for aging in place.”

Proximity to cultural amenities is attractive, but people move for many reasons. Nearly 18 years ago, Norma Sober moved to the 84-unit Loraine Condominiums, 123 W. Washington Ave., so that her husband could walk to work at the university, because it’s a cool building, and because they were tired of being homeowners. “In the years we’ve been here, there’s been lots of turnover,” she notes, “and my perception is the building is a mix of young adults with stable incomes … and older adults, not all of whom are retired.”

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