The workforce was already in crisis before COVID. Once the collapse is complete, it will take years for the workforce to recover
As described elsewhere, analysts have been sounding alarm bells for years about the imminent staffing crisis in education, childcare, and home health care. This includes the kind of essential work done by Direct Support Professionals (DSPs) for adults with Intellectual / Developmental Disabilities (IDD). In this post, we outline how the unprecedented expenses incurred by programs during COVID, and resignations of DSPs that followed, has moved the industry from crisis towards collapse (see Figure 1). And with related industries recovering while DSP wages stagnate, the collapse is accelerating across all systems of support.
Since learning that the Department of Human Services (DHS) slipped an extraordinary $170M cut into the budget approved by the House on Monday. We are now assured of a collapse that would affect tens of thousands of Pennsylvanians, unless the Senate reverses DHS' cuts in their proposed budget. Let's break down the steps leading up to Monday's devastating budget proposal, using data gathered by a coalition of Pennsylvania parents and providers through analyses shared with state officials and legislators.
Providers immediately faced enormous challenges delivering services during COVID. By September 2020, providers were cutting services or closing altogether while staff turnover doubled to 37%. Some providers teetered on the brink of insolvency, reporting less than 3 DAYS of cash on hand (instead of the industry standard of 3-6 months). Providers reported that increased costs and lost revenue approached 30% of their annual budget.
While other industries began to recover in 2021, the combination of challenging working conditions and high vacancy rates made the staffing crisis for DSPs permanent. DSPs still trying to catch their breath after COVID were expected to cope with high turnover and daily pressure to close gaps in coverage. The overall impact on access to services for adults with IDD was staggering. By May 2021, this resulted in a drop of overall system capacity of 24% across service types.
DHS support to services for adults with IDD throughout this time was little more than a band-aid given the nature and extent of the crisis. Though millions of dollars in pandemic relief funds partially offset increased costs and lost revenue due to COVID, the temporary pay increases offered little to DSPs and agencies seeking stability, especially given that wages were marginal even before COVID (starting at $12.16/hour in January 2020). For agencies, the threats to withdraw COVID-related supplemental pay made it impossible to plan for the growth needed to begin to restore system capacity. For DSPs, most could only conclude that they had no future working with adults with IDD, as price increases dropped their wages by double digits compared to wages paid to staff providing similar support in schools.
The staggering ineffectiveness of DHS' response became clear in data released in a 2022 survey of providers representing 40% of the workforce.
Even with supplements, average pay for DSPs remained stuck at $16.83/hour despite double-digit inflation over the previous 18 months.
Agencies reported vacancy rates of 20% and annual turnover of 36% among DSPs
"15% of agencies reported permanently closing programs due to lack of staff (and).... almost 30% of group homes had to consolidate because of lack of staff. Almost 53% reduced day program capacity." (p.2).
These cuts led to a significant decrease in the amount of services being provided. By February 2023, the number of adults with IDD served had dropped by 11% since the onset of COVID. The evidence for profound decline in services across the board is undeniable (see Figure 1), and can be traced directly back to inadequate fee schedule rates. More than 4000 adults with IDD were directly affected by program closures, with thousands more not receiving the services they need.
Our prediction? These conditions will lead an increasing number of providers to permanently close their doors, resulting in the collapse of the industry for years to come. With unsustainable vacancy rates and turnover amongst DSPs shrinking overall system capacity, more and more programs will find it impossible to maintain the critical mass of clients needed to operate in the red. DHS' extraordinary decision to further cut funding while also rejecting permanent and meaningful wage increases clearly signals to IDD providers that their services are not a DHS priority.
It will take years to re-establish the programs that will collapse, and at a much higher costs that would be required to keep them from closing in the first place. Opening any program requires significant investments of time and money: programs must be prepared to absorb all staffing costs during an initial phase of recruitment and training; it may be months before capacity has increased to the point needed to assure a stable cash flow; it can also take months to develop the network of community-based sites for work, volunteering, and recreation, and; programs operating facilities must also absorbs significant, up-front costs of renovating and equipping the space needed. And no one will even consider opening programs unless they can offer the wages needed to attract potential staff from other programs.