RICHMOND, Va.--(BUSINESS WIRE)--Not only has the cost of long term care in U.S. nursing homes, assisted living facilities and in the home increased for the fifth consecutive year, but the nation faces an impending shortage of direct-care workers, further driving up long term care costs. Those are two of the key conclusions drawn from cost of care research by Genworth Financial (NYSE:GNW).
Each year Genworth surveys the cost of care in more than 10,000 nursing homes, assisted living facilities and home care providers in all 50 states and 90 geographic regions including the District of Columbia. This year the survey adds adult day health care findings. The most comprehensive cost analysis in the industry, it surveys three times the number of providers and offers more regional detail than similar studies, and is the only survey that provides comparative data for the past five years.
This year, Genworth’s study found the price of most long term care services are rising faster than inflation, and by 2050, the nation’s bill for providing long term care services is expected to top $379 billion. In 2008, the average annual price of a private nursing home room reached $76,460 nationally – more than one and a half times the average annual household income in the U.S. of $48,2011. The most preferred form of care is in the home, and the cost of home care performed by a non-skilled home health aide remained flat in most regions of the country.
This year’s Cost of Care Survey is complemented by additional research released today by Genworth entitled “A Workforce to Care for Our Aging.” This study identifies an imminent shortage of caregivers as the driver of increasing long term care costs. By 2030, the number of Americans 65 years and older will double. The U.S. will need to recruit 200,000 new direct-care workers each year to meet future demand among our aging population.
Another challenge is the caregiver workforce is dwindling as it is struggling to retain its existing workforce. The turnover rate for paraprofessional long term care workers in the U.S. is disproportionately high – 13 to 18 percent higher than the overall labor workforce and 20 percent higher than other service workers.
“Unless something is done to directly address this growing care gap, not only will paying for long term care be difficult for many, but finding it may be as well,” said Buck Stinson, president of Genworth Financial’s Long Term Care Insurance business.
“With 78 million baby boomers set to retire in the next few decades, America faces an impending workforce crisis in the long term care industry that could strain the economy and negatively impact millions of Americans and their families,” he said. “These are serious problems that require collaborative, results-oriented discussions among policymakers and stakeholders.”
Key Cost of Care Findings
Following are key findings, broken out by major category:
“The expense of just a few years of long term care in a facility or at home can very quickly wipe out a lifetime of savings,” noted Stinson. “As most Americans prefer care in their homes, which puts a greater need on expanding home-based options, we must encourage families to start talking about long term care today and to incorporate it into their overall retirement strategy.”
Regional Variations Abound
The cost of long term care varies widely by region, with costs in urban areas averaging 16 percent more than non-urban areas. In certain urban areas of New York and Missouri, costs are more than 40 percent higher. A comprehensive interactive map of all 50 states and 90 geographic regions can be accessed at: genworth.com/CostofCare.
The following chart lists the 10 regions with the highest and lowest costs for one year in a private nursing home room.
|Most Costly Regions||Least Costly Regions|
Texas (excluding Austin,
Dallas, Houston, and San
|New York, NY||$145,392||Georgia (excluding Atlanta)||$52,139|
|Mass. (excluding Boston)||$106,321||Kansas||$48,656|
|NJ (NY metro)||$105,779||
Missouri (except St. Louis
and Kansas City)
|San Francisco, CA||$100,101||Louisiana||$45,539|
Conducted by CareScout between December 2007 and February 2008, the 2008 Cost of Care Survey provides national, state and local cost information. It is available along with the research paper “A Workforce to Care for Our Aging,” at genworth.com/CostofCare.
About Genworth Financial
Genworth Financial, Inc. (NYSE:GNW) is a leading public Fortune 500 global financial security company. Genworth has more than $114 billion in assets and employs approximately 7,000 people in 25 countries. Its products and services help meet the investment, protection, retirement and lifestyle needs of over 15 million customers. Genworth operates through three segments: Retirement and Protection, International and U.S. Mortgage Insurance. Its products and services are offered through financial intermediaries, advisors, independent distributors and sales specialists. Genworth Financial, which traces its roots back to 1871, became a public company in 2004 and is headquartered in Richmond, Virginia. For more information, visit genworth.com.
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1 U.S. Census Bureau, 2006