Supported Living: A System in Crisis

Continued underfunding of Community Residential Services for individuals with Intellectual and Developmental Disabilities has left Supported Living providers with funding that barely allows for meeting even minimum wage requirements in several areas of the state and drastically rising turnover in all areas of the state.

Over the past four years, turnover has dramatically increased by 57% as funding has not been allocated to address wage and staffing issues.  As such, turnover in essential Direct Support Professional positions has now increased to over 50% and has remained there for two consecutive years!  For individuals with intellectual and developmental disabilities who require consistency and continuity of care, a turnover rate of over half of their direct support staff in any year is disruptive and does not allow for relationships to form and quality supports to be maintained.  Consistent long-term staffing is essential to serving people with complex support needs.

When looking at the efficacy of the vendor rate for Supported Living Services, several questions must be answered:

  1. What are the actual out of pocket costs to provide contracted services?
    • According to 2016 DSHS-DDA Cost Report Data, $359,276,640 was spent on direct support wages and benefits. This is a cost to provide the contracted/reimbursed staffing hours of $16.97 per hour.
  1. What are the current reimbursement rates paid for contracted services?
    • Per the 2016 DSHS-DDA Cost Report Data, the average reimbursement rate was $16.63 per hour. DDA reimbursed providers $352,190,056 for the 21,176,159 direct support hours in 2016.
  1. What is the gap between actual out of pocket costs and reimbursement rates?
    • In 2016, providers spent $7.1M above the reimbursed direct support funding (Direct Support Hours X vendor rate). This is a difference of 2% above the vendor rate that providers bore the cost.
  1. When was the last time supported living services received a rate increase and the percent increase?
    • Supported Living received a $1.25 per hour vendor rate increase in the last legislative session effective July 1, 2017. This was essentially a 7.5 increase for most providers.  However, it should be noted that the statewide minimum wage increased by 16.2% in 2017 (from $9.47 to $11), so the providers lost ground with the minimum wage despite the vendor rate increase.
  1. What is the potential impact without a vendor rate increase?
    • Minimum wage increased by 50 cents January 2018, and will increase by another 50 cents January 2019 and by $1.50 in January 2020. Supported Living providers obtained another $1 per hour increase in July 2018, so they will keep pace with the minimum wage increase for 2018 (note that the vendor rate covers all direct support wages, as well as taxes and benefits).  However, with the January 2019 minimum wage increase, providers will lose ground and based upon current projections with the 2018 vendor rate increase, the average entry level wage will probably only be 3.5% above the statewide minimum wage.  By the time of the January 2020 minimum wage increase of $1.50 per hour, Supported Living providers will be funded below minimum wage.
  1. What is the potential impact of a vendor rate increase; in particular, how clients/providers will benefit from a vendor rate increase?
    • With a vendor rate increase equivalent to the rate of increase in the statewide minimum wage, providers will be able to stay comfortably above minimum wage. It is also hoped that turnover will begin to decrease, creating greater continuity of care for the individuals with intellectual and developmental disabilities currently served in Supported Living.  Lastly, providers have not been able to serve new clients being referred for services due to the challenges with attracting and retaining direct support staff.  With a significant vendor rate increase, it is hoped that Supported Living providers will be able to serve new clients, bringing the numbers served closer to the target for the waiver appropriations.
      • Note: By June 2017, the difference between the clients served in supported living and the target for appropriations was 88 (Target = 4,640, Clients Served = 4,552). As a result, DDA reduced the target by over 30 clients to 4,609 for July 2017.  In addition, the allotment was reduced by approximately $15M in June 2017 due to actual expenses being underspent during the year due to providers not being able to serve new clients and fill vacancies.

When looking at Supported Living and the entry level wage for direct Support Professionals that the vendor rate currently funds, it is important to not accept the status quo, which has resulted in turnover rates over 50% for two years running and the numbers being served not keeping pace with the target.  Instead, the focus should be on creating a self-sufficient workforce to ensure quality care for some of our most vulnerable citizens.  The current entry level wage from the last DDA Wage and Turnover Survey of $11.34 is not a livable wage.

In a recent study prepared for The Workforce Development Council of Seattle-King County, it was shown that the Self-Sufficiency Standard for a single adult is $14.06 per hour*.  This is 24% below the current entry level wage in Supported Living.  According to the report, the Self-Sufficiency Standard describes how much income families of various sizes and compositions need to make ends meet without public or private assistance in each county in Washington State.

If looking at a family rather than a single adult (which would be the demographic of most direct support professionals) the self-sufficiency standard would be considerably higher.  The self-sufficiency standard takes into account housing costs, as well as costs for food, transportation, health care, child care, taxes and tax credits, miscellaneous living expenses and emergency savings.  There are also geographic differences in the self-sufficiency standards, with parts of Eastern Washington coming in around $9 per hour while East King County being the highest at $15.93 for one single adult.

To compute the cost of each of these ways at looking at the vendor rate crisis in Supported Living, we must compute the additional cost of providing the over 21M contracted direct support staffing hours within Supported Living.

  • 2% vendor rate increase to fund the additional out of pocket cost to provide contracted services that providers are currently covering:
    • $3.55M GF-S Annually
  • 5% vendor rate increase to keep pace with minimum wage increases in the first year of the next biennium (from $12 in 2019 to $13.50 in 2020) and 3% increase in the second year (est. $13.90 in 2021):
    • $78.8M GF-S for 2019-21 Biennium ($69.4 GF-S for 12.5% increase in FY20, $9.4M GF-S for 3% in FY21)
  • 4% vendor rate increase to keep pace with minimum wage increases since last legislative session (from $11.50 in 2018 to $13.50 in 2020) and 3% increase in second year (est. $13.90 in 2021):
    • $107M GF-S for 2019-21 Biennium ($97.2 GF-S for 12.5% increase in FY20, $9.8M GF-S for 3% in FY21)
  • 24% benchmark rate increase to bring the average entry level wage for direct support professionals to the self-sufficiency standard of $14.06 for a single-person household:
    • $42.4M GF-S Annually

* The Self-Sufficiency Standard for Washington State 2017 by Diana M Pearce, PhD, Director of Center for Women’s Welfare at the University of Washington School of Social Work in collaboration with the Workforce Development Council of Seattle-King County

Supported Living continues to lose ground with Minimum Wage and State-Operated programs

Services & Costs

  • Community Residential – 4,597 people served Average cost per client per day = $314.04
  • SOLA’s – 143 people served Average cost per client per day = $557.42
  • RHC’s –685 people served Average cost per client per day = $785.06

SOLA program is 77.5% more expensive, while RHC’s are 150% more expensive than Supported Living

Wages and the Impact on Turnover

            Entry Level Wages                                                                             Turnover                                            

  • Community Residential = $11.34 per hour 1% turnover
  • SOLA = $15.88 per hour 2% turnover

Wages that are 40% lower result in turnover that is 84.2% higher than in State Operated programs

Vacancy Rate (in positions)

  • Community Residential = 4%
  • SOLA = 1%

        

A Decade of Underfunding: 

Washington & Seattle Minimum Wage Mandates compared to

Average Starting Wage for Supported Living Direct Support Staff

 

 

 

Date

Statewide Minimum Wage Mandate per hour Statewide DSP average entry wage  

Statewide Percentage Difference

Seattle Minimum Wage Mandate Seattle DSP average entry wage  

King County Percentage Difference

January 2018 $11.50 $11.94*    3.8% $15.45 $12.51* (19.0%)
January 2017 $11.00 $11.34    3.1% $15.00 $11.91 (20.6%)
January 2016 $9.47 $10.77 13.7% $13.00 $11.23 (13.7%)
January 2015 $9.47 $10.41 9.9% $11.00 $10.83 (1.5%)
January 2014 $9.32 $10.26 10.1% $9.32 $10.73 15.1%
January 2013 $9.19 $10.12 10.1% $9.19 $10.60 15.3%
January 2012 $9.04 $9.75 7.9% $9.04 $9.98 10.4%
January 2011 $8.67 $9.90 14.2% $8.67 $10.63 22.6%
January 2010 $8.55 $9.90 15.8% $8.55 $10.56 23.5%
January 2009 $8.55 $9.98 16.7% $8.55 $10.60 24.0%
January 2008 $8.07 $9.98 23.7% $8.07 $10.22 26.6%

* Estimate based upon benchmark increase (future minimum wage levels, 2019 = $12, 2020 = $13.50)