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.
HLM: What should hospital HR leaders know about how the regulations are going to impact their business?
Sedor: They're going to have to start planning now how they're going to accommodate this.
One thing [hospital administration] might see is that people with disabilities may have limited staff accompanying them. Traditionally, if our members were supporting someone who had to go to the emergency room or ended up in a hospital setting, they almost always sent someone with them, especially if that person didn't communicate well, or didn't communicate at all.
Hospitals may see less and less of that, because we're struggling with such a workforce issue here, and the OT [regulations] will exacerbate that. [Hospitals] may need to be prepared to offer more support for people with disabilities. We're all dealing with this unfunded mandate, and [are figuring out] how to fund the costs to address that.
HLM: What steps should hospital HR and administration take to protect their patients?
Sedor: We're asking for at least a temporary increase in Medicaid funding, so our organization will have time to adjust for the rule and time to catch up. Hospitals may want to consider whether they want to advocate.
Some folks are more comfortable with that than others, but you may want to advocate with the DOL and the administration to consider a lower threshold, for example, or a more incremental implementation of the rule. This is going to be really tough for all employers across the board, but especially folks that have more regulations they have to live with, which includes hospitals.
At this point, the rule isn't final yet. It's moving, and it's moving quickly. There is a limited amount of time for review, but I think there's still time for advocacy, and that's something I would encourage hospital administrators to consider.
HLM: If HR leaders have concerns about the proposed regulations, what should they do?
Sedor: HR leaders should reach out to their congressional delegations. They should make sure that their representatives in Washington, DC., know that this will be an issue. While the official opportunity to comment to the DOL is closed, reaching out to congressional offices is still a good way to express concerns.
They are the people best able to tap the DOL on the shoulder and say, "hey, want to know what I'm hearing from a business that employs hundreds of people in my district?"
HLM: What are some advantages that hospitals and other larger organizations have that smaller organizations do not?
Sedor: There's strength in numbers, especially if you can mobilize the people who are relying on the services and make a compelling case to your workforce that these rules will probably not [result in increased pay]. On paper, the regulations look great, and I think it's going to be a hard sell to your workforce. But I do think that there's a way to do it, if you look at the big picture.
Most hospitals already have good relationships with their congressional delegates, and state and local representatives as well, in part because they are such significant employers and they provide such vital services to people in their communities, which is something else they have going for them.
Lena J. Weiner is an associate editor at HealthLeaders Media.