Concerns about increased overtime pay extend beyond the HR suite to clinical concerns about quality of care.
Businesses may balk at paying workers overtime rates for a variety of reasons, most of them financial.
The coming changes will have unforeseen consequences for managing the continuum of care, says Sedor. As vulnerable patients go back into their communities, care coordinators and others who depend on a robust community health system could find that they have fewer resources than they do now.
This is because there is a dependence on Medicaid dollars, she explains. "Most of these people are relying on support that doesn't have a margin to deal with mandates like this proposed rule. If, all of a sudden, our service providers are required to pay overtime… they're going to have to find those dollars somewhere within their organization. They can't pass the cost on to the consumer, because the consumer is being funded by Medicaid and state dollars."
But hospital administrators are in a unique position to advocate on their own behalf—and that of other care providers, she told me recently. The transcript below has been lightly edited.
HLM: Why are disabled populations particularly vulnerable to the consequences of expanding overtime pay?
Sedor: We have a [healthcare] workforce crisis as it is. The work is incredibly demanding and very intense, and it takes a special kind of person. We've got a huge turnover percentage. Some folks report up to 30 to 40% turnover, which is very costly for employers, but also a real challenge in the quality and continuity of care as well. If you've got someone helping you with your most basic of needs, and that person is a different person week-over-week, it's a real problem.
As I mentioned, our rates our fixed. And, to top it off, about 20 states are on a two-year budget cycle. So, if you are reliant upon that state appropriation, it's not going to catch up to you in time to adhere to this rule.
That's what makes [the services] so tricky; it's that the money is going to have to come from somewhere, which could result in providers rethinking the services they're offering. They might need to constrict the number of services they provide or the number of people they provide them to, or they might need to adjust wages to try to compensate for the overtime that they're going to have to pay.
Let me be clear: We know that it's time to update [overtime pay]; it hasn't been updated since 2004. We absolutely agree that people who provide these kinds of services—direct support professionals—are valued and should be paid what they're worth, right?
But, at the end of the day, this is paid for by Medicaid dollars. And we can't pay what we don't have and 70% to 80% of the funding that providers get will go to workforce.
Lena J. Weiner is an associate editor at HealthLeaders Media.