As a home care agency owner, your priorities include getting clients and discussing the responsibilities your organization will assume. The next most important thing that such individuals will want to know is how much you will charge for the services your agency will be offering. Several factors come into play, in this case, including the qualifications of your employees, the services a particular client requires, extra tasks that may increase the workload, thereby warranting an additional charge, among other things.

For that reason, there is no exact science when deciding how much you should charge clients as a home care agency operator. That is the case because you need to be mindful of one’s budget and ensure that your pricing strategy is competitive at the same time.

There is also the risk of overcharging your clients or leaving money on the table, especially if you do not adopt an informed pricing strategy and when you fail to evaluate your billing rates from time to time. Here is some insight into setting the pricing strategy for your home care agency.

 

Setting Your Home Care Agency Pricing Strategy

 

1. Consider The Level and Type of Your Care Services

Home care agency services range from simple companionship to fairly involved medical care. Indeed, the demands of a particular client and the complexity of tasks will dictate how much your home care agency should charge for the services it offers specific individuals. Also, you cannot afford to overlook a patient’s medical needs and medical history, as well.

For instance, if your agency is handling individuals requiring specialized medical equipment or those with a history of stroke or patients with dementia, providing them a high level of care will be necessary. That means that the rate for such persons will be higher. You also need to factor in rate adjustments as the needs of various clients changes with time.

On the other hand, if your home care agency deals with couples rather than individuals on various occasions, you may need to charge extra depending on the care level that such persons demand.

 

2. Research The Average Rates within Your Locality

Although there are many variations from one area to the next, home health aides in the U.S. charge a median of $23 per hour, according to a survey by Genworth. Of course, you do not expect the price of a gallon of milk or the cost of renting an apartment to be the same everywhere, and in the same way, agencies working with more qualified caregivers will charge more for their services.

Rate fluctuations in the case of home care agencies depend on various factors, including locality. As such, you need to find out what other home care agency owners within your area are charging their clients to gain insight into what your pricing strategy should be. After that, you can adjust your rate upwards or downwards depending on your workers’ experience and the responsibilities they undertake.

 

3. Focus on Benefits and Compensation

Sometimes, what your home care agency opts to charge clients on an hourly basis may not be the only way you compensate your caregivers for the services they provide. As such, you may find that some families are willing to give perks over and above the standard pay rate of your agency. Some of these benefits and compensation include;

  • Contributions toward health insurance premiums.
  • Paid time off.
  • Overtime pay.
  • Annual bonuses.

Working with clients who offer such benefits and compensation means that there will be an adjustment on the rates your home care agency offers.

 

4. Factor in The Skills and Experience of Your Employees

As is the case in other industries, caregivers with more education and experience will charge more for their services. The fact that some seniors require advanced care implies that your home care agency needs someone with special licenses or certifications to handle such patients. For that reason, the services that such staff members offer will cost more, and you need to consider that when setting your pricing strategy.

Some of the qualifications that may require you to pay particular caregivers more include;

  • Certified Patient Care Tech (PCTs).
  • Registered nurses.
  • Certified Nursing Assistants (CNAs).

If your home care agency works with some employees whose services warrant higher pay, you will need to pass on the cost to clients requiring the services of professionals.

 

What Should Your Agency Charge for Extra Services?

Every situation and family your home care agency handles may be different. Still, the rate you charge should generally cover all essential tasks that allow your clients to live comfortably, including light housekeeping, preparing meals, running errands, managing medications, and offering assistance while bathing.

Should some of your clients ask an employee to take on additional responsibilities beyond the basic services, you need to charge extra for such tasks. Below are examples of the other services a client may require.

  • Transportation using a caregiver’s vehicle.
  • Caring for pets.
  • Accompanying a client to special events or traveling with them on trips.

The inconvenience, norm, or additional workload should dictate your home care agency charges for these extra services.

 

When to Review Your Pricing

Discussing rate adjustments with your clients ahead of time is critical. The reason is that some seniors rarely consider pricing reviews, yet they are necessary because they allow your home care agency to meet various financial obligations. In that case, you need to ensure that clients factor in a schedule of rate reviews in the initial agreement, and that may include a minimum annual increase in charges.

Note that establishing a range instead of a fixed amount for rate adjustments allows your clients to increase what they pay in line with your employees’ performance.

 

Conclusion

Acknowledging the human side of your clients when setting the pricing strategy for your home care agency and realizing profitability is paramount. Balancing these aspects differs from one home care agency to another, but prioritizing your clients as you pursue profits is still possible.

Adopting the ideas above will ensure that your agency remains at the forefront of offering quality care services at a competitive rate, which will ultimately set you apart from the competition.

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Caregiver Compensation

Caregiver Compensation

Having the right compensation structure is key in every home care agency. Whether you are just starting your firm or have been in the industry for a while, you need to regularly review your pricing to attract the most clients and retain your caregivers as well.

Do you offer competitive pricing to your caregivers? According to Payscale, the average salary of a home caregiver is $11.99 per hour. This amount changes from state to state, so you can consider the minimum salary for caregivers in your state to avoid legal repercussions.

With the state’s minimum remuneration in mind, you can consider the experience and workload of employees to determine the exact salary to offer to your caregiver employees:

Experienced caregivers with additional qualifications such as Certified Patient Care Tech (PCTs) and Certified Nursing Assistants (CNAs) can get a higher pay to retain them in your agency. For the new employees, you can begin with the minimum wage allowed in your state and increase the pay gradually.

As for the pay periods, you can decide to pay weekly, bi-monthly or monthly. The key is to ensure that your employees don’t receive late payments and that you observe all the tax requirements of your state.

Offering Benefits to Your Caregivers

Employee benefits are a great way to increase the morale of the workers. Nowadays, home care agencies are offering several perks to their employees to retain them. Here are a few examples of the numerous benefits that employers offer caregivers:

  • Paid holidays and vacations
  • Paid sick leave
  • Performance rewards and bonuses
  • Free training and promotion opportunities
  • Discounts for personal enrolments in the communities such as team member’s gym memberships, movie tickets, and much more
  • Paid overtime

Note: there’s no limit to the benefits you can offer your caregivers, provided that it’s allowed by the law and the employees are okay with it. The key is to ensure the caregivers are happy to work in your agency and serve your clients as well.

Managing the Caregiver’s Payroll and Withholdings

Managing payroll for independent caregivers can be challenging for the employer. The management includes calculating the hours worked by each caregiver, the salary, withholding and paying for Medicare, social security, and much more.

Proper payroll management is vital as it keeps your caregivers happy and streamlines your activities at work. That’s why it is crucial to work with a trusted team and management software to ensure proper payroll and withholding management.

Improve Your Caregiver Management with FirstVisit Software

FirstVisit software is an effective cloud-based solution that provides full support for caregivers. Our software has smart scheduling features that allow you to support your clients and employees, manage your payrolls/billing, get security alerts and much more. Request a demo today or reach out to us to help you choose the best features for your home care business.

This blog was written by FirstVisit in conjunction with Home Care Profit. Home Care Profit is a group run by Darnell Reid which is geared towards entrepreneurs who want to learn how to start, grow and profit in the home care industry. He’s an experienced home care agency owner who helps entrepreneurs all across the US through posts, webinars, and discussions on his facebook group as well as his podcast, The Home Care Insiders Secrets.

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