Home Health Care and Local Government — A Growing Burden on NYC’s Serfs

Not long ago, I read about therapists getting arrested for stealing from programs for developmentally disadvantaged children, overbilling and not providing the services for which they had been paid.

https://www.audacy.com/1010wins/news/local/9-nyc-therapists-stole-usd3-3m-from-child-development-program

While I can’t find it now, I distinctly remember one of the articles saying that the crew had paused their scheme for a while in 2014, after another group had been caught doing the same thing.  Were the federal authorities really going to do something about this?  (They don’t have to worry about the state authorities, as NY state politicians are pro-fraud at the expense of the serfs, in exchange for political support).  After a year or two, the scammers decided the answer was no and resumed their criminal activities.

Meanwhile, the federal government was also investigating home health agencies for defrauding Medicaid.  The investigation took place in 2020, and ended late that year.

https://www.justice.gov/usao-sdny/pr/10-defendants-arrested-home-health-aide-fraud-scheme

“Money that’s earmarked for Medicaid-approved services, and fraudulently paid out to those who don’t render these services, is a crime that’s ultimately paid for by taxpayers themselves. In this case, as we allege, there were even patients involved in the kickback scheme who were willing to play along with the no-show scam in order to earn a few extra bucks. With a nearly $5 billion increase in managed long-term care plan spending recorded over a recent six-year period, the money paid out to those charged today is no drop in the bucket.”

So, was there a pause in New York City’s stunning home health care boom?  And did that pause subsequently end?

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The spreadsheet with the charts used in this post and the data as downloaded is here.

And shows that the exponential growth that, if it had continued, would have had everyone on earth working as a New York City home health care aide in a few decades did pause during the investigation (and also the pandemic) in 2020, before resuming in 2021.

The number of New York City home health care industry workers increased by 10,700 from 2020 to 2021 (annual average data), while falling slightly in the rest of New York State.  It more than doubled in the eight years of the DeBlasio/Cuomo Administrations, from 97,200 in 2013 to 217,200 in 2021.  Since 2006, a span of just 15 years, it has quadrupled, with Medicaid paying much of the bill.  Much of what appeared to be private sector growth was not.  Needless to say the number of disabled elderly people in NYC didn’t increase by nearly the same percent.

A number of factors mean that one would expect the need for senior care to increase, even as the need to spend money on schools decreases, if what people actually needed had anything to do with public priorities.  The number of school-age children has been doing down, but the number of people over age 75 has been going up, and with family breakdown (something today’s seniors got rolling 50 years ago) there is less willingness by today’s young people to provide care for their elders.  

These factors, however, are present throughout New York State and the United States, while New York’s increase in home health care employment is exceptional.  While home health care employment has doubled in the rest of the state, and increased five-fold in the United States, it has increased nearly 14 times in New York City. 

One reason might be seniors receiving assistance they don’t really need.  If someone tells the generation now in old age that they are entitled to a maid, a chauffer and a personal shopper, that entitled generation isn’t going to say no.  A second might be unnecessary services not provided, and kickbacks paid to the senior who didn’t need them, as in the example of the indictment cited earlier.

But lobbyists are demanding a separate, special, taxpayer-funded higher minimum wage for home health care workers compared with other private sector workers, due to a home health care worker shortage.  And this being reported without question (or data) by the press…

So if there is actually a shortage of workers, how can their number being going up so much?  New York City’s unemployment rate has been double the U.S. average in the wake of the pandemic, but it was very low before the pandemic started.

And the home health care employment increase far outpaces any increases in the number of people reaching the age of frailty.  It is likely that the government is being billed for services that are not provided, by workers who don’t exist, to seniors who don’t exist either — with some of that money coming back in the form of campaign contributions.

Next up for “progressives” perhaps a lower minimum wage for private sector workers who aren’t government-funded, to lower the cost of living for those who are, public employees, retired public employees, and $billionaires.  (In a “real” sense, soaring inflation might help achieve that goal).  A single minimum wage for everyone, a single health care finance system for everyone (as in Europe), a single retirement system for everyone?  That’s not progressive, because it treats those in on the deal and everyone else the same.  In New York, privileges have to be paid for.

Medicaid is a program of the State of New York, operated under state rules.  But the trend has been radically different in New York City compared with the rest of the state, even as the rest of the state is (on average) older.  Note that this is total home health care employment, not Medicaid-funded employment, though most home health care employment is, in fact, funded by Medicaid.

New York City and (in particular) the rest of New York State already had a concentration of older people in the past, due to working age adults moving away.  So when I did an analysis in association with the 2017 Census of Governments data, I found that the population age 75+ has actually been rising faster in the rest of the country than in NYC.  But the increase in NYC home health care employment dwarfed the increase in the U.S. as a whole

Does a shift from nursing homes to home health care explain the massive growth of the latter industry?  It does not.  NYC nursing home employment is down slightly as a result of the pandemic, but it was flat earlier while home health care employment soared.

In the Rest of New York State nursing home employment hand continued to increase slowly even as home health care employment did the same, before nursing home employment plunged during the pandemic.

I examined the employment trend in industries that provide health in services for seniors in great detail in this post, based on the employment and payroll phase of the 2017 Census of Governments and related private sector employment data.

Anyone can repeat that analysis at any time if they really want people to know what is going on.  Apparently, they don’t.  But this chart gives you an idea.

New York City had far fewer residents age 75+ than the rest of the state in 2017, but it had more alleged employees in the nursing home and home health care industries combined.  The real needs of, and cost of, seniors are likely to keep increasing, but in New York needs have nothing to do with it.  

New York City’s ability to meet real needs are continually undermined by rent seeking by those working the system, whether for tax breaks, excess staffing, retroactive pension increases, or high costs for contractors.  Its politicians are more likely to deny services to those really in need in a budget crunch than to try to prevent $billions from disappearing.  With the state legislature exclusively concerned with serving special interests, and the Governor mostly interested in sucking money out of NYC to the rest of the state, only some of the Mayors some of the time have the interest of New York’s serfs at heart.  And every time a Mayor stops paying attention, a few $billions disappear.

Now a brief update on trends in local government employment.  State and local governments have been spared the full consequences of our long term economic and social decline, and short-term pandemic-driven recession, by rising debts — especially federal.  But with inflation increasing, and more and more federal money going to past debts and services for seniors, this is not likely to continue.  

Here in New York State, local government employment soared in the Rest of New York State in the Pataki-era of “everyone on the payroll and into the pension system.”  New York City residents will be sacrificed to pay for this decades into the future.  Since 2010, however, the trend in local government employment in the rest of New York State has been down — with a big decrease in 2020.  Not so in New York City, with ongoing increases until a small decrease — associated with big service reductions — during the past two years.  Many of those holding local government jobs in New York City live in the rest of the state, and city residents have to pay for those too.

Looking specifically at local government elementary and secondary education employment, it had soared in the rest of the state as a result of the STAR program, which provided more school aid to those places that spent the most.  The result was an upward spiral during the 1990s, even as NYC public school employment fell in the face of rising enrollment.  Now public school enrollment is falling, both in NYC and in the rest of the state, but the decrease in NYC public school employment has been limited compared with the rest of the state.  Instead, more out of classroom jobs for dues payment members have been created, to keep class sizes high enough to justify a demand for more money, even as the United Federation of Teachers claims a staffing shortage.

Dividing the past few decades into three periods…

One sees the limited increase in local government employment in New York City from 1994 to 2013, compared with other parts of New York State.  For a time Chemung County, home of Elmira, had the lowest state and local tax burden as a percent of personal income in New York State — though one that was well above the U.S. average.

During the DeBlasio/Cuomo era New York City local government expanded far more than the rest of the state.  So did local government employment in Chemung County, where the public sector was used as a job program to replace a collapsing private sector, leading to a fiscal crisis.  Under the Cuomo Administration the local government boom slowed elsewhere in the rest of New York State.

Since the pandemic, and given falling school enrollment with most of the large Millennial generation now in adulthood, local government employment has been falling.  But it has fallen less in New York City than in the rest of the state, despite outsized gains during the 2013 to 2019 period, falling school enrollment, and the nation’s second leading private sector job loss (behind Hawaii).  

How will this shrinking tax base support an expanding political/union class whose members get richer, compared with other workers who matter less, year after year (just like the $billionaires)?    What we do know is that with 6.4% more local government workers in NYC in 2021 than in 2000, city residents are entitled to less in services.  If city residents can’t afford to pay more and more taxes, worse service cuts are to come.