Caregiving costs billions to
American businesses

Each day in the United States, approximately five million older individuals receive some kind of assistance from more than 14 million family members, friends and neighbors.

This informal system of care allows elders to live in their own homes, outside the nation's formal system of care, which includes nursing homes and other long term care facilities. Often these "informal" caregivers are the lifelines that their older relatives and friends rely on to provide daily care and to bring them critical information about the community services and national programs available to assist them.

The U.S. Department of Health and Human Services (HHS) estimates that the informal caregiving system of family and friends provides about 80 percent of all the care and help needed by the frail elderly and those with disabilities. From personal care to transportation, meal preparation and household chores, family caregivers and friends provide the range of care so vital to ensuring that older people can remain in their homes and communities.

While caregivers save federal, state and local governments countless resources, caregiving also has its costs, especially to American businesses.

Caregiving costs to American businesses, where employees provide assistance to a frail elderly relative, is estimated to be as much as $29 billion, according to the results of a recent study presented in June to the U.S. Senate Special Committee on Aging.

The MetLife Study of Employer Costs for Working Caregivers is a national survey of caregiving, conducted by the National Alliance for Caregiving (NAC) and co-sponsored by the Metropolitan Life Insurance Company. The study provides relevant data on the 14.4 million full- and part-time Americans who are balancing work with caregiving roles.

Caregivers often have to juggle the demands of their children, other family members and jobs. HHS estimates that 50 percent of caregivers work outside of the home.

Some forego promotions and more demanding jobs at better pay, and others cut back on the number of hours they work. Still others stop working altogether in order to meet the needs of their older relatives - all at substantial financial cost to themselves.

In addition to the personal sacrifices of caregivers, the MetLife Study concludes there are considerable costs to employers, mostly in terms of lost employee productivity. These include:

• Replacement costs for employees who leave their jobs. Ten percent of all caregivers leave the workplace entirely, 17 percent for "intense caregivers."
• Absenteeism. Eleven percent of caregivers take a leave of absence.
• Partial absenteeism. Fifty-nine percent of caregivers are regularly late, leave early and/or take long lunches.
• Workplace interruption. Personal phone calls related to caregiving responsibilities account for more than one hour per week of lost work time.
• Supervisory costs. Eighty-one percent of employed caregivers report sympathetic attitudes from supervisors who provide emotional support, arrange coverage for absent employees, and provide counsel regarding benefits involved in work disruptions.

"It's clear that controlling the cost of caregiving will be one of American business' first major challenges of the 21st century," said Weil. "Caregiving costs, as significant as they are today, will rise dramatically as the population continues to age."

In fewer than 15 years, the first wave of America's 76 million baby boomers will turn 65 years old. More than one million of these baby boomers are expected to live to be centurions, living to be 100 years old and older.

According to Weil, this study is an "early warning signal to help the country's large and small businesses contend with this emerging crisis."

Weil offers several solutions to American businesses that also apply to counties that in 1992 employed nearly two million full-time workers and an additional 379,000 part-time workers.

Weil's solutions include flex time, employee assistance programs, eldercare referrals and long-term care insurance programs. "American businesses must do a great deal of long range planning to prepare for what is and what's to come," he remarked.

Counties, too, are facing challenges related to caregiving for the elderly. According to the U.S. Bureau of the Census, county governments employ approximately 2.3 million people. Although the MetLife study addressed caregiving costs to private-sector employers only, local governments are also experiencing similar trends. County employees, like American business employees, are struggling to balance work and family needs.

As the number of persons over age 65 increases, and even more significant the number of persons over age 85 continues to grow, caregiving will become a common part of more and more Americans' daily life.

Though most caregivers today are women, usually adult daughters of elderly parents, a greater number of family members, regardless of gender and their position in the family, will be active caregivers.

"Caregiving is becoming more common among American families and the future will see a growing number of caregivers who are also in the workforce," predicted Gail Hunt, executive director of the National Alliance for Caregiving. Hunt added, "The availability of assisted living and community services may reduce the occurrence of co-residence caregiving - one of the most stressful forms of caregiving." Hunt also predicts a growth in long-distance caregiving.

Although businesses in all parts of the country are most likely being impacted by caregiving, some counties' businesses are being especially hard hit (see chart.)

As our country ages and more elderly persons become the "oldest old" (persons 85 years and older), even more family and friends will be called on as caregivers for frail seniors. To assist counties in responding to the challenges and opportunities of an aging society, the NACo Aging Project staff are here to help.

(For more information on caregiving and model county aging programs, contact Kelly Schulman at 202/942-4246.)