Health Care. Home. in Indiana INDUSTRY GROWTH. Srikant Devaraj, Michael J. Hicks and Rohit Ravula JANUARY 2012 RESEARCH & ANALYSIS BY

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1 JANUARY 2012 Home Health Care INDUSTRY GROWTH in Indiana RESEARCH & ANALYSIS BY Srikant Devaraj, Michael J. Hicks and Rohit Ravula Center for Business and Economic Research Ball State University, Muncie, Indiana Sponsored by Indiana Association for Home and Hospice Care

2 About the Publication This analysis was conducted by the authors and produced at the Center for Business and Economic Research at Ball State University, Muncie, Indiana. The publication was sponsored by the Indiana Association for Home and Hospice Care. Publication produced by Jessica Tennant. Center for Business and Economic Research The Center for Business and Economic Research is an economic policy and forecasting research center housed within Ball State University s Miller College of Business. CBER research encompasses health care, public finance, regional economics, transportation, and energy sector studies. Center for Business and Economic Research Miller College of Business Ball State University 2000 W. University Ave., Muncie, IN

3 Table of Contents Introduction 1 Home Health Care Growth in Indiana 3 Growth in Industry Subsectors 6 Ambulatory Health Care in Indiana 8 National Growth of Home Health Care 10 Home Health Care Services in Indiana 12 Summary and Conclusions 20 Endnotes & References 21 Appendix 22

4 Copyright 2012 Center for Business and Economic Research Ball State University

5 Introduction Home Health Care Services The home health care industry in the United States is experiencing a boom with a growing demand for services. Baby boomers, those born between 1946 and 1964, are now moving into retirement age. Because of this, a sharp increase in the need for health care and social assistance services is expected to follow in the U.S. The primary reason for this growth is due to the increase in the number of senior citizens. According to Census, the 65 years and older population share of total population is around 13 percent in This group s population share is projected to increase in 2020 to 16 percent and in 2030 to 19.3 percent, while population of 18 to 64 age group dropping from 62.8 percent (in 2010) to 57.2 percent (in 2030). See Figure 1. The 65 years and over population alone is projected to increase by 36 percent in 2020 and 79 percent in 2030 when compared to 2010 population. In addition, the nation s population of 85 years and older is projected to increase by 14.7 percent in 2020 and 52.1 percent in Baby boomers...are now moving into retirement and a sharp increase in the need for health care and social assistance services is expected to follow in the U.S. There are around 1.1 million employees working in 25,686 establishments in home health care services industry in the United States as of When compared to the year 2000, this The Home Health Care Industry in Indiana 1

6 FIGURE 1: Projected Percent Distribution of U.S. Population by Age Group, years 65+ years 85+ years sector experienced an increase of 40.5 percent in terms of number of jobs and 59.6 percent in establishments. Figure 2 shows the structure of the industry in the United States. In 2009, 36.6 percent of S-corporations in this industry have employed 36 percent of employees, followed by 30.3 percent corporations employing 33.3 percent employees. 1 This report provides the background economic information about health care and social assistance sector (NAICS 62) in Indiana and its counties, followed by information about ambulatory health care services (NAICS 621) and home health care industry (NAICS 6216). The industry/commodity balance sheet, wages of health care occupations, and economic impact estimates are also discussed in this report. Source: U.S. Census Bureau FIGURE 2: Employment & Establishment Share of Home Health Care Industry in U.S., 2009 Non-Profits 2,902 establishments 224,906 employees Other 32 establishments 692 employees Corporations 7,790 establishments 367,514 employees Partnerships 2,798 establishments 83,053 employees Sole Proprietorships 2,763 establishments 31,089 employees S-Corporations 9,401 establishments 397,555 employees EMPLOYEES ESTABLISHMENTS Source: County Business Patterns 2 Center for Business and Economic Research Ball State University

7 Industry & Sector Overview Health Care Growth in Indiana Following the national trend, the health care and social assistance sector, including hospital, nursing and residential services and primary care health services, as shown growth in the last ten years. This growing sector in Indiana can also be contributed to the rise in the post-retirement demographic nationally. After retirement, as age increases, many people may not be able to do activities independently. Some may eventually move to another location or to a nursing home, while some do not move from their home. Studies have shown that there are many factors considered by elderly that determines the decision to live independently or enter a nursing home. These factors include health status, possession of wealth, shocking events, age, gender, race, marital status, informal care from children/relatives, or reliance on children to make decisions. An Index of Independence in Activities of Daily Living (ADL) was developed by Katz, Ford, Moskowitz, et al. (1963) from observations of activities performed on patients with prolonged illness. Although this measure does not include some complex tasks such as finances or shopping, the measure describes the ability to perform six basic functions, such as bathing, dressing, feeding, etc., as a way to determine what type of care might best suit one with a prolonged illness. This growing sector in Indiana can also be contributed to the rise in the post-retirement demographic nationally. The Home Health Care Industry in Indiana 3

8 Employment & Establishment Growth Over the past decade, Indiana s health care and social assistance industry has grown significantly. Between 2001 and 2010, the employment and establishments increased 22.7 percent and 9.7 percent respectively. Figure 3 shows the employment and establishment trend in health care and social assistance sector (NAICS 62) in Indiana over the past decade. FIGURE 3: Trends in Health Care & Social Assistance Sector Employment & Establishments in Indiana, EMPLOYEES ESTABLISHMENTS Figure 4 shows the employment comparison across all the counties in Indiana for the health care and social assistance sector in 2001 and The counties that experienced highest employment in health care and social assistance industry in Indiana between 2001 and 2010 were Marion, Lake, Allen, St. Joseph and Vanderburgh counties Employment, in thousands Establishments, in thousands Source: Bureau of Labor Statistics, Quarterly Census of Employment & Wages FIGURE 4: Health Care & Social Assistance Sector Employment in Indiana, 2001 & 2010 A Health Care Employment B Health Care Employment Total 284, Total 349, Top 10 Counties 1. Marion - 64, Lake - 25, Allen - 22, St. Joseph - 16, Vanderburgh - 14, Delaware - 8, Elkhart - 7, Tippecanoe - 7, Vigo - 6, Monoroe - 6, Top 10 Counties 1. Marion - 76, Lake - 29, Allen - 27, St. Joseph - 17, Vanderburgh - 17, Hamilton - 12, Tippecanoe - 9, Elkhart - 9, Delaware - 9, Monoroe - 8,374 Number of Employees ,000-2,000 5,000-10,000 Data Unavailable 500-1,000 2,000-5,000 10,000+ Internally Estimated Data Source: U.S. Bureau of Economic Analysis 4 Center for Business and Economic Research Ball State University

9 Personal Income Growth Marion County experienced the highest personal income ($5.02 billion) in this sector in 2009, followed by Lake ($1.76 billion), Allen ($1.68 billion), St. Joseph ($1.08 billion) and Vanderburgh ($1.04 billion) counties. In terms of per-capita personal income (Figure 5) for this sector, Vanderburgh County topped the list with a per-capita personal income of $5,927.56, followed by Marion ($5,640), Allen ($4,775.25), Vigo ($4,351.49), and Delaware ($4,216.19) counties. 2 The personal income for the health care and social assistance sector can be used to show several indications of the health and strength of the industry in Indiana counties. First, it indicates the quality of the consumer market for the health care industry. Additionally, this signifies the economic well-being of the county s residents working in the health care industry. The per capital personal income is calculated by dividing the total personal income of Indiana s health care industry by the population of the state. The same is done at the county level. 10 FIGURE 6: Sector 62 Indiana s Largest Health Care Industry Employers FIGURE 5: Per Capita Personal Income for Health Care & Social Assistance Sector in Indiana, 2009 Number of Employees 10 8 Total Income $19,549,374 < Population 6,423,113 Facility Type Headquarters Single Location Branch Top 10 Counties 5 1. Vanderburgh Marion Allen Vigo Delaware Wayne Tippecanoe St. Joseph Dubois Lake in thousands of dollars 1. Methodist Hospital, Indianapolis 2. St. Vincent Hospital, Indianapolis 3. Parkview Health System, Inc., Ft. Wayne 4. St. Margaret Mercy Healthcare Center, Dyer 5. Health & Hospital Corp. of Marion County 6. Community Hospitals of Indiana, Indianapolis 7. St. Margaret Mercy Healthcare Center, Hammond Per Capita Personal Income in $ thousands Data Unavailable Internally Estimated 8. Bloomington Hospital, Carmel 9. St. Elizabeth Regional Health, Lafayette 10. St. Mary s Medical Center of Evansville Source: U.S. Bureau of Economic Analysis The Home Health Care Industry in Indiana 5

10 Health Care & Social Assistance Overview Growth in Industry Subsectors The health care and social assistance industry sector (NAICS 62) is classified into four sub-sectors. These sectors include: ambulatory health care services (NAICS 621); hospitals (NAICS 622); nursing and residential care facilities (NAICS 623); and social assistance (NAICS 624). These subsectors include industries providing a variety of services, including medical, health area, rehabilitation, and social assistance services. Employment & Establishment The trends in employment share and establishment share among the health care subsectors are shown in Figure 7. From 2001 to 2010, there was a rising trend in both employment and establishments in Indiana in the general health care sector as well as all four subsectors. The employment share of ambulatory health care service sector and hospitals sector was 33.7 percent and 31.6 percent FIGURE 7: Trends in Health Care Subsector Employment & Establishments in Indiana, A. Sector Share of Employment in thousands B. Sector Share of Establishments in thousands Ambulatory Health Care 622-Hospitals 623-Nursing & Residential 624-Social Assistance 621-Ambulatory Health Care 622-Hospitals 623-Nursing & Residential 624-Social Assistance Source: Bureau of Labor Statistics, Quarterly Census of Employment & Wages 6 Center for Business and Economic Research Ball State University

11 of total health care and social assistance industry respectively in The employment percentage share has changed only changed by +/-1 percent across all these sectors since The establishment share was 69.1 percent for ambulatory services but only 1.1 percent for hospitals. This supports the fact that few hospitals have employed large number of employees. Personal Income The average payroll after adjusting for 2010 inflation is shown in Figure 8. Apart from the hospital sector (increase of 15.2 percent), other health service sectors have not experienced any significant change in their payroll. FIGURE 8: Average, Real Annual Payroll for Health Care Subsector Employees in Indiana, Average, Real Annual Income in $ thousands 62-Health Care 621-Ambulatory Health Care 622-Hospitals 623-Nursing & Residential 624-Social Assistance Source: Bureau of Labor Statistics, Quarterly Census of Employment & Wages Sector 62 Health Care & Social Assistance Services This sector encompasses industries that provide health care, medical, and rehabilitation services, as well as social assistance. All services in this sector are provided by trained professionals. The health care and social assistance industry sector is divided into four subsectors: Sector 621 Ambulatory Health Care Services Industries providing health care services directly or indirectly to patients, typically without inpatient services. Includes family doctors, optometrists, dentists, chiropractors, mental health services, home health care, ambulance services, and other services. Sector 622 Hospitals Industries providing medical, diagnostic, and treatment to patients primarily with some accommodation. Includes general medical hospitals, residential psychiatric and substance abuse facilities, and other specialized hospitals. Sector 623 Nursing & Residential Services Industries providing residential health care with either nursing, supervisory, or other types of care as required by residents. Includes nursing care, residential mental health facilities, community care, continuing care, and other facilities. Sector 624 Social Assistance Industries providing a wide variety of social assistance directly with clients. Includes assistance for families, children, the elderly, and persons with disabilities. Also includes community food services, emergency relief, temporary shelters, vocational assistance, and child day care services. The Home Health Care Industry in Indiana 7

12 Rise in Personal Income, Employment & Establishments Ambulatory Health Care in Indiana Ambulatory health care services industry (NAICS 621) includes offices of physicians, dentist, other health practitioners, outpatient care centers, medical and diagnostic laboratories, home health care services, and other ambulatory health care services. The personal income for this sector increased by 36.4 percent in 2009 when compared to 2001 (after adjusting for inflation). The trend can be seen in Figure 9. In terms of per-capita personal income for this sector, Vanderburgh County topped the list with a per-capita personal income of $2,838.31, followed by Marion ($2,714.72), Allen ($2,444.07), Delaware ($2,413.84), and Tippecanoe ($2,384.51) counties. See Figure 10. The employment and establishment comparison in 2001 and 2010 across Indiana is shown in Figures 11 and 12 for ambulatory service sector. The figures also shows the top 10 counties in each category in Marion County has experienced the highest employment (26,012 jobs) and establishments (1285 establishments) in this sector in 2009, followed by Lake (10417 jobs, 910 establishments), Allen (8383 jobs, 537 establishments), Hamilton (6558 jobs, 529 establishments), and St. Joseph (5728 jobs, 337 establishments) counties. FIGURE 9: Trend in Ambulatory Health Care Personal Income in Indiana, MILLION 15.0 $ Note: Personal Income adjusted for 2010 inflation using CPI data from U.S. Bureau of Labor Statistics. Source: U.S. Bureau of Economic Analysis FIGURE 10: Per Capita Personal Income in Ambulatory Health Care Services in Indiana, Total Sector Income $9,490,699,390 Population 6,423,113 Top 10 Counties 5 1. Vanderburgh Marion Allen Delaware Tippecanoe Vigo Bartholomew Floyd Lake Monroe in thousands of dollars Per Capita Personal Income in $ thousands Internally Estimated Data Source: U.S. Bureau of Economic Analysis 8 Center for Business and Economic Research Ball State University

13 FIGURE 11: Ambulatory Health Care Sector Employment in Indiana, 2001 & 2010 A Ambulatory Health Care Employment B Ambulatory Health Care Employment Total 92, Total 117, Top 10 Counties 1. Marion - 21, Allen - 7, Lake - 7, St. Joseph - 5, Vanderburgh - 4, Delaware - 4, Elkhart - 2, Tippecanoe - 2, Hamilton - 2, Monoroe - 2, Top 10 Counties 1. Marion - 26, Lake - 10, Allen - 8, Hamilton - 6, St. Joseph - 5, Vanderburgh - 5, Delaware - 3, Porter - 3, Elkhart - 3, Tippecanoe - 2,956 Number of Employees ,000 1,000-5,000 5,000-10,000 Data Unavailable 10,000+ Internally Estimated Data Source: Bureau of Labor Statistics, Quarterly Census of Employment & Wages FIGURE 12: Ambulatory Health Care Sector Establishments in Indiana, 2001 & 2010 A Ambulatory Health Care Establishments B Ambulatory Health Care Establishments Total 8, Total 8, Top 10 Counties 1. Marion - 1, Lake Allen Vanderburgh St. Joseph Hamilton Porter Vigo Elkhart Madison Top 10 Counties 1. Marion - 1, Lake Allen Hamilton St. Joseph Vanderburgh Porter Elkhart Monroe Vigo Number of Establishments Internally Estimated Data Source: Bureau of Labor Statistics, Quarterly Census of Employment & Wages The Home Health Care Industry in Indiana 9

14 Subsector Overview National Growth of Home Health Care Home health care services are classified under the sub-sector of ambulatory service industry (Sector 621). These service organizations (some of them are Medicare-certified) include home health care agencies, home care aide organizations and hospices. Home health care... strengthens and complements the care given by family and friends, maintaining the independence and dignity of the care receiver... Home health care is cost effective for people recovering from a hospital stay, functional or cognitive disability, or who are unable to take care of themselves. It also strengthens and complements the care given by family and friends, while maintaining the independence and dignity of the care receiver, which is not received in a nursing and residential care facilities. (National Association of Home Care, 2010) Hospice care organizations (some of them are Medicarecertified) offer support and palliative care focusing on comfort and quality of life to people at the end of their life. It also relies on the combined skills and knowledge of specialists such as physicians, nurses, medical social workers, therapists, counselors, hospice aides and volunteers, to manage an individualized arrangement of care for each care recipient. Hospice is regarded as a humanitarian and kind way to deliver health care services during the time of distress that patients face at the end of their life. (National Association of Home Care, 2010) 10 Center for Business and Economic Research Ball State University

15 FIGURE 13: Largest Home Health Care Industries by State, U.S. Home Health Care 774,381 employees 16,284 establishments U.S. Home Health Care 1,104,809 employees 25,686 establishments 1. Texas 179,628 employees 3,244 establishments 2. New York 153,593 employees 966 establishments 3. California 63,390 employees 2,654 establishments 4. Florida 62,044 employees 2,505 establishments 5. Ohio 51,538 employees 1,089 establishments Sector 6216 Home Health Care Services in Indiana Indiana saw an approximate increase of 30 percent in employment with 14,219 home health care employees, ranking 22nd among U.S. states in Additionally, Indiana saw a 29.5 percent increase in home health care establishments, ranking 20th nationally with 391 facilities. Source: County Business Patterns Nation-Wide Trends Across the United States, home health care services (NAICS 6216) vary drastically in terms of employment and establishments (Figure 13). Texas gained the highest employment among all states in 2009 with 179,628 jobs with 3,244 establishments. This was followed by New York (153,593 jobs, 966 establishments), California (63,390 jobs, 2,654 establishments), Florida (62,044 jobs, 2,505 establishments) and Ohio (51,538 jobs, 1,089 establishments). Indiana ranks 22nd in terms of number of employees in home health care sector with 14,219 jobs. It also ranks 20th in terms of number of establishments (391 establishments). FIGURE 14: National Home Health Care Growth (Percent Change), A. Growth of Home Health Care Employment Growth in employment between 2001 and 2009 (Figure 14) is seen highest in Alaska (813.7 percent increase), Mississippi (133.5 percent), Louisiana (125.6 percent), Hawaii (105 percent) and Alabama (91.2 percent). Growth in establishment is primarily seen in Missouri (112.5 percent increase), Utah (111.6 percent), North Carolina (110.3 percent), Florida (101.5 percent), and Texas (97.3 percent) during the same period. Indiana ranks 32nd in employment growth and 34th in establishment growth between 2001 and % & below 0-25% 50-75% % -25% - 0% 25-50% % 125% + B. Growth of Home Health Care Establishments Source: County Business Patterns The Home Health Care Industry in Indiana 11

16 Growth of Industry Demand, Employment and Establishments Home Health Care Services in Indiana Employment & Establishment Growth In 2009, the home health services sector has accounted for a total of 14,219 jobs, an increase of 30.7 percent when compared to Despite recession, this sector has experienced stability in terms of number of jobs from 2000 to 2009 with very few peaks and troughs. Figure 15 shows the employment trends of the sector in Indiana. Despite recession, this sector has experienced stability in terms of number of jobs from 2000 to 2009 with very few peaks and troughs. Figure 16.A shows the home health care service industry across Indiana counties in 2001 and 2009 and shows the top 10 counties with highest employment and establishments. Marion County tops the list with 2,772 jobs and 69 establishments in 2009, followed by Lake County (1,664 jobs and 51 establishments) and Allen County (1,271 jobs and 31 establishments). The establishment trend during 2000 to 2009 is shown in the Figure 16.B. The home health care services sector has also gained 32.5 percent in 2009 when compared to The establishment size has changed over a period of time. In 2000, 48.5 percent of establishments had less than 20 employees and 27.1 percent had 20 to 49 employees. But in 2009, only 44.8 percent had less than 20 employees and 34 percent had 20 to 49 employees. This shows the growth of employees in the home health service sector establishments. On the other hand, establishments with more than 100 employees reduced their size, either by down-sizing their employees or due to mergers and acquisitions by other establishments. 12 Center for Business and Economic Research Ball State University

17 FIGURE 15: Trends in Home Health Care Employment & Establishments in Indiana, EMPLOYEES in thousands ESTABLISHMENTS Establishment Size 1-20 employees employees Sector Employment employees employees Source: County Business Patterns Sector 6216 Home Health Care Sector Growth in Indiana Employment in Indiana s home health care services subsector saw a 30.7 percent increase in 2009 from 2000, totaling 14,219 jobs. Additionally, Indiana saw an increase of 32.5 percent in terms of home health are establishments from 2000 to Establishments with 20 to 49 employees saw the greatest measure of growth, with establishments employing less than 20 workers saw a slight decrease. Establishments with greater than 100 employees also saw a reduction. 30.7% 32.5% Increase in Employment Increase in Establishments FIGURE 16: Home Health Care Employment & Establishment Growth (Percent Change), A. Home Health Care Employment Growth B. Home Health Care Establishment Growth 9 State Growth 30.70% 10 3 State Growth 32.54% Top 10 Counties 1. Dearborn - 1,478.95% 2. Clark % 3. Putnam % 4. Jennings % 5. Huntington % 6. Decatur % 7. Adams % 8. Montgomery % 9. Fulton % 10. Johnson % Top 10 Counties 1. Spencer % 2. Morgan % 3. Fulton % 4. Clark % 5. Hancock % 6. Howard % 7. Hendricks % 8. Dearborn % 9. Henry % 10. Lake % Percent Change Growth -50% & below -25% - 0% 0-25% % 500% + Complete Data Unavailable -50% - -25% 0% (no change) 25-50% 100% - 500% Internally Estimated Data Source: County Business Patterns The Home Health Care Industry in Indiana 13

18 FIGURE 17: Home Health Care Sector Employment in Indiana, 2000 & 2009 A Home Health Care Employment B Home Health Care Employment Total 10, Total 14, Top 10 Counties 1. Marion - 2, Allen Lake Vanderburgh St. Joseph Hamilton Elkhart Madison Porter La Porte Top 10 Counties 1. Marion - 2, Lake - 1, Allen - 1, Hamilton - 1, St. Joseph Vanderburgh Vigo Porter Clark Delaware Number of Employees ,000 2,000+ Internally Estimated Data 1,000-2,000 Complete Data Unavailable Source: County Business Patterns FIGURE 18: Home Health Care Sector Establishments in Indiana, 2000 & 2009 A Home Health Care Establishments B Home Health Care Establishments Total Total Top 10 Counties 1. Marion Lake Allen Vanderburgh Hamilton St. Joseph Elkhart Porter Grant Vigo Top 10 Counties 1. Marion Lake Allen St. Joseph Vanderburgh Hamilton Porter Hendricks Vigo Delaware - 9 Number of Establishments Complete Data Unavailable Source: County Business Patterns 14 Center for Business and Economic Research Ball State University

19 Trends in Payroll of Home Health Care The payroll trends for home health care service sector (Figure 19) have been increasing for Indiana over the last decade. There has been an increase of 16.5 percent in average first quarter payroll per employee (after adjusting for 2009 inflation) from the year Also, the average annual payroll has increased 39 percent during the same period. Trend in Home Health Care Hourly Wages The mean and median wages in Indiana for health care occupations at an hourly/annual level is mentioned in the appendix and shown in Figure 20. The mean and median hourly wages of home health aides ($10.10 and $9.90 per hour respectively) is lowest when compared to other occupations in the health care sector (except for pharmacy aides $9.70 and $9.40). The mean and median hourly wages varied very little across Indiana s MSAs. Table 1 shows the mean annual income of health care support occupations in Figure 20 shows the wages of home health aides by Indiana MSAs. TABLE 1: Average Annual Income in Indiana, 2010 Occupation SOC Code 5 Average Annual Income Home Health Care Aides $21,030 All Health Care Support $25,890 Nursing Aides, Orderlies, & Attendants $23,550 Psychiatric Aides $23,010 Occupational Therapy Assistants $51,200 Occupational Therapy Aides $29,040 Physical Therapist Assistants $52,440 Physical Therapist Aides $24,210 Massage Therapists $35,410 Dental Assistants $34,310 Medical Assistants $27,910 Medical Equipment Preparers $30,120 Medical Transcriptionists $29,340 Pharmacy Aides $20,060 Veterinary Assistants & Lab Animal Caretakers $23,610 Other Health Care Support Workers $28,280 Registered Nurses $57,820 1 Licensed Practical and Licensed Vocational Nurses $38,100 1 Note: 5 Standard Occupational Classification System; 1 Average Annual Income for registered nurses, licensed practical and licensed vocational nurses are not included in the average annual income for home health care aides as listed in the table and are listed only for reference. Source: Bureau of Labor Statistics FIGURE 19: Trends in Home Health Care Employment & Per Employee Payroll in Indiana, EMPLOYMENT & 1 ST QUARTER PAYROLL ANNUAL PAYROLL Average Real Annual Payroll per Employee in $thousands Home Health Care Employment in thousands Average 1 st Quarter Payroll per Employee in $thousands Source: County Business Patterns; adjusted using CPI data from BLS FIGURE 20: Average Hourly Wages & Employment of Health Care Support Occupations in Indiana, 2010 Pharmacy Aides Home Health Care Aides Psychiatric Aides Nursing Aides, Orderlies & Attendants Veterinary Assistants & Lab Animal Caretakers Physical Therapist Aides All Health Care Support Occupations Medical Assistants Other Health Care Support Workers Occupational Therapy Aides Medical Transcriptionists Medical Equipment Preparers Dental Assistants Massage Therapists Occupational Therapy Assistants Physical Therapist Assistants Registered Nurses Licensed Practical & Licensed Vocational Nurses EMPLOYMENT in thousands AVERAGE HOURLY WAGE in dollars Source: Bureau of Labor Statistics The Home Health Care Industry in Indiana 15

20 FIGURE 21: Average Hourly Wages and Employment of Home Health Care Aides in Indiana, 2010 Michigan City 370 employees, $9.70/hr Elkhart 210 employees $10.13/hr Gary 1,270 employees $10.84/hr ILLINOIS South Bend 1,000 employees $10.32/hr Lafayette 510 employees $9.30/hr Indianapolis Area 5,300 employees $10.48/hr Muncie 320 employees $11.01/hr Anderson $10.54/hr Ft. Wayne 2,090 employees $9.62/hr OHIO Cincinnati, OH 7,640 employees $10.38/hr Regional Employment & Hourly Wages Northwest Indiana, Non-metropolitan Area 1,610 employees, $9.72 per hour Northeast Indiana, Non-metropolitan Area 820 employees, $9.71 per hour Southwest/Southeast Indiana, Non-metropolitan Area 700 employees, $9.68 per hour Average Hourly Wage $ $ $ $ $ Number of Employees Terre Haute 380 employees $9.42/hr Columbus 270 employees $10.30 per hour Evansville 950 employees $9.48/hr Louisville, KY 1,450 employees $10.68/hr KENTUCKY Note: Employment for Anderson, IN not available. Source: Bureau of Labor Statistics SOC Compensation of Home Health Care Aides in Indiana Home health care aides in Indiana currently rank 14th in terms of hourly compensation of health care support occupations (SOC ). The average hourly wages of a home health care aide in Indiana is $10.10, with an average annual income of $21,030. This is below the state average for health care support occupations, with an hourly wage average of $12.50 and an average annual income of $25,890. The highest paid hourly home health care aides were found in the Muncie, Indiana area, with an average of $11.01 per hour and $22,910 per year. TABLE 2: Average Annual Income of Home Health Care Aides in Indiana, 2010 City or Metro Area Income Lafayette $19,350 Terre Haute $19,600 Evansville $19,710 Fort Wayne $20,000 Southwest/Southeast Indiana $20,120 Michigan City (La Porte) $20,170 Northeast Indiana $20,200 Northwest Indiana $20,230 Elkhart (Goshen) $21,070 Columbus $21,430 South Bend (Mishawaka) $21,480 Cincinnati, Ohio (Middleton) $21,590 Indianapolis (Carmel) $21,790 Anderson $21,930 Jefferson County Area (including Louisville, KY) $22,210 Gary $22,550 Muncie $22,910 Source: Bureau of Labor Statistics 16

21 FIGURE 22: Commodity Demand by Home Health Care Industry by Gross Input in Indiana, 2006 FIGURE 23: Value Added by Home Health Care Industry Services in Indiana, 2006 Accounting & Bookkeeping Business Support Petroleum Refineries Legal Services Surgical & Medical Instrument Manufacturing Pharmaceutical & Medicine Manufacturing Telecommunications Plastics, including plastic plumbing fixtures Wholesale Trade Building Services Office Administration Management Employment Services $4.28 million $4.54 million $4.71 million $5.26 million $5.51 million $6.39 million $8.57 million $9.06 million $9.12 million $9.13 million $13.19 million $17.10 million $20.90 million Other Property Income 12.97% $67,927,000 Proprietary Income 14.58% $76,313,000 Demand Coefficients Indirect Business Taxes 0.58% $3,059,000 Employee Compensation 71.86% $176,240,000 Lessors of Non-financial intangible assets Real Estate Other $21.48 million $27.21 million $88.44 million GROSS COMMODITY INPUT in $ millions Value Added Coefficient Employee Compensation Proprietary Income Other Property Taxes Indirect Business Taxes Total Value Added The home health care service industry contributed a total added value of $523,540,000 in Indiana in Total Commodity Demand : $254,890,000 Source: IMPLAN Economic Impact Model (2006 data) Source: IMPLAN Economic Impact Model (2006 data) Industry & Commodity Demand We analyzed the home health care service sector in Indiana further by looking at the backward linkages using the IM- PLAN economic impact modeling system. Figure 22 shows the backward linkages of commodity demand for the sector and Figure 23 shows the value added data. It can be seen that only 32.7 percent of the demand is from the commodities and the remaining 67.3 percent is obtained from value-added factors such as employee compensation, indirect business taxes, property and proprietary income. The average local share or regional purchasing coefficient (RPC) of major inputs was above 50 percent for most commodities. FIGURE 24: Demand of Home Health Care Services by Indiana Households by Annual Income, 2006 GROSS INPUT in $ millions Household Demand Figure 24 shows the institutional demand of home health care services in Indiana. Households with income between $50,000 and $75,000 demands and pay more to home health care services for personal consumption. This is followed by households with $35,000-50,000 and $75, , < ANNUAL HOUSEHOLD INCOME in $ thousands Source: IMPLAN Economic Impact Model (2006 data) The Home Health Care Industry in Indiana 17

22 FIGURE 25: Impact of Home Health Care Industry on Indiana Employment, 2000 & 2009 A. Impact on Sector Employment, 2000 & 2009 B. Impact of Home Health Care on Health Care Sector Mining Utilities Agriculture, Forestry, Fishing & Hunting Government & Non-NAIC Industry Construction Management of Companies Information Arts: Entertainment & Recreation Educational Services Wholesale Trade Transportation & Warehousing Manufacturing Finance & Insurance Professional Scientific & Technology Services Real Estate & Rentals Other Services Accommodation & Food Services Administrative & Waste Services Retail Trade Health Care & Social Assistance C. Impacted Sectors by NAIC Industry Code 11 Agriculture, Forestry, Fishing & Hunting 21 Mining All Other Sectors Total Impact on All Sectors 22 Utilities 23 Construction Manufacturing 42 Wholesale Trade Retail Trade Transportation & Warehousing 51 Information 52 Finance & Insurance 53 Real Estate & Rental TOTAL IMPACT 54 Professional, Scientific & Technology Services 55 Management of Companies 56 Administrative & Waste Services 62 Health Care & Social Assistance 71 Arts, Entertainment & Recreation 72 Accommodation & Food Services 81 Other Services Government & Non-NAIC Industries TOTAL IMPACT Source: IMPLAN Economic Impact Model (2006 data) Sector 6216 Impact of the Home Health Care Sector on Employment in Other Sectors The home health care industry has increasingly impacted the employment of a variety of sectors from 2000 to As expected, the health care and social assistance industry sector (NAIC 62) was impacted the greatest, close to double that of all other analyzed sectors combine. Considering other industry sectors, retail trade (NAIC 44-45), administrative and waste services (NAIC 56), followed by accommodation and food services (NAIC 72) saw the greatest impact from the home health care industry. Economic Impact of Home Health Care In order to assess the economic impact of the home health care industry in Indiana, we used the IMPLAN software by adjusting Sector 464: Home health care services. We calculated the impact analysis for two years (2000 and 2009) based on the employment data obtained from county business patterns database from census. Figure 24 shows the results of the employment impact in 2000 and This shows the impact of total home health care service operations on the home health care sector (direct effect), suppliers employment (indirect effect), and the employment impacted by household expenditures of both the home health care services and its suppliers employees (induced effect). The total employment impact of the home health care industry to Indiana in 2000 was 14,965 jobs. The total employment impact in 2009 was 19,560 jobs. 18

23 FIGURE 26: Economic Output & Total Added Value of Home Health Care in Indiana, 2009 Mining Agriculture, Forestry, Fishing & Hunting Construction Arts, Entertainment & Recreation Educational Services Utilities Management of Companies Information Other Services Transportation & Warehousing Accommodation & Food Services Wholesale Trade Professional Scientific & Technology Services Administrative & Waste Services Finance & Insurance Retail Trade Government & Non- NAIC Industries Real Estate Manufacturing Economic Output Total Added Value Sector 6216 Economic Output and Total Value Added of Home Health Care The home health care industry saw a total economic output (direct, indirect and induced effect) of $1.327 billion dollars in Indiana, with $ million in the health care and social assistance sector alone. In terms of total added value, home health care contributed $537 million (direct, indirect and induced effect to the health care and social assistance sector, with a total of $825 million for all sectors. The total value added is calculated by adding employee compensation, proprietor income, other property income, and indirect business taxes. Utilizing the IMPLAN Economic Impact Model, the 2009 economic output and total value added was calculated using 2006 Indiana data. Source: IMPLAN Economic Impact Model (2006 data) OUTPUT & VALUE in $millions Economic Output & Total Added Value The home health care service industry has accounted for $742 million in economic output in This level of output generated $63.1 million in additional economic activity in Indiana to bring the home health care service sector industry s total economic output in Indiana to $805.1 million. This industry s purchase of goods and services from other sectors as shown in Figure 25 contributed an additional $521.3 million in economic output to Indiana. The difference between the home health care service sector s total output and the cost of its intermediate inputs is the value added. Figure 26 show the total value added by the home health care industry in Indiana in 2009 using the calculations performed using IMPLAN software. FIGURE 27: Components of Total Added Value of Home Health Care Services in Indiana, 2009 Other Property Income 22.01% $181,711,369 Proprietor Income 11.46% $94,615,806 Indirect Business Taxes 4.07% $33,567,579 Employment Compensation 62.46% $515,507,248 Source: IMPLAN Economic Impact Model (2006 data) The Home Health Care Industry in Indiana 19

24 Home Health Care Conclusion The home health care industry will continue to experience increasing demand of quality services from elderly, sick and disabled people in future, since it is a low-cost alternative compared to hospitals and nursing homes. The diversity in services offered in this home health care industry include inhome skilled nursing services, counseling services, personal care services, physical, speech, occupation and vocational therapy, home maker and companion services, medical equipment supplies and social services, drugs and medication, dietary nutritional services, audiology, etc (Council on Aging, 2009). The home health care industry will continue to experience increasing demand of quality services... Though their hourly wage is lower when compared to other health care sector occupations, these varied services still add stability to the job base for this industry. Over the last decade (2000 to 2009) Indiana has witnessed slow, but steady growth in employment (30.7 percent increase)and establishment (32.5 percent increase) in this sector and continues to rise due to baby boomers moving into retirement age. 20 Center for Business and Economic Research Ball State University

25 Endnotes 1. According to the IRS, the S-corporation is a corporation that elects to pass corporate income, losses, deductions, and credit through to their shareholders for federal tax purposes. 2. The high number for Marion County may be due to centralized reporting of workers. References Council on Aging. (2009). In-Home Care. Retrieved from Katz, S, Ford, A.B., Moskowitz, R.W., et al. (1963). Studies of Illness in the Aged - The Index of ADL: A Standard Measure of Biological and Psychological Function. Journal of the American Medical Association, 185(12): National Association of Home Care. (2010). Home care and Hospice Facts and Stats. Retrieved from org/facts/ The Home Health Care Industry in Indiana 21

26 Appendix TABLE A.1: Projected Percent Distribution of U.S. Population by Age Group, Age Group to 64 years years and over years and over Source: U.S. Census Bureau TABLE A.2: Employment & Establishment Share of Home Health Care Industry in U.S., 2009 Employment Percent Share Establishments Percent Share All Facilities 1,104, , Corporations 367, , S-Corporations 397, , Sole Proprietorships 31, , Partnerships 83, , Non-profits 224, , Other Source: County Business Partners TABLE A.3: Trends in Health Care & Social Assistance Sector Employment & Establishments in Indiana, Year Employment Establishments ,912 11, ,525 11, ,682 11, ,278 12, ,393 12, ,826 12, ,437 12, ,332 12, ,404 12, ,694 12,595 Source: Bureau of Labor Statistics, Quarterly Census of Employment & Wages 22 Center for Business and Economic Research Ball State University

27 TABLE A.4: Health Care & Social Assistance Sector Employment in Indiana, 2001 & 2010 County Indiana-State Total 284, ,694 Adams Allen 22,654 27,566 Bartholomew 2,826 3,362 Benton Blackford Boone 1,113 1,667 Brown Carroll Cass 1,120 1,375 Clark 3,255 3,962 Clay Clinton 959 1,177 Crawford Daviess Dearborn 1,139 1,398 Decatur DeKalb 1,024 1,562 Delaware 8,880 9,041 Dubois 2,381 2,922 Elkhart 7,967 9,413 Fayette 1,442 1,498 Floyd 2,395 3,538 Fountain Franklin Fulton Gibson 1,221 1,171 Grant 3,356 4,069 Greene Hamilton 5,455 12,272 Hancock 932 1,677 Harrison Hendricks 2,059 4,067 Henry 1,221 1,499 Howard 3,260 3,914 Huntington 1,303 1,599 Jackson Jasper 867 1,064 Jay Jefferson Jennings Johnson 3,272 4,579 Knox 1,709 2,103 Kosciusko 2,535 3,473 LaGrange Lake 25,304 29,910 LaPorte 5,521 5,395 County Lawrence 1,737 2,132 Madison 5,855 6,376 Marion 64,016 76,176 Marshall 1,461 1,430 Martin Miami Monroe 6,749 8,374 Montgomery Morgan 1,308 1,605 Newton Noble 1,194 1,285 Ohio Orange 826 1,014 Owen Parke Perry Pike Porter 3,753 7,354 Posey Pulaski Putnam Randolph Ripley 1,221 1,499 Rush Scott Shelby 934 1,146 Spencer St. Joseph 16,235 17,674 Starke Steuben Sullivan Switzerland Tippecanoe 7,579 9,792 Tipton Union Vanderburgh 14,411 17,648 Vermillion Vigo 6,804 8,312 Wabash 1,325 1,626 Warren Warrick 1,533 2,558 Washington Wayne 3,934 4,807 Wells 1,502 1,654 White Whitley 868 1,065 Note: Highlighted counties indicate estimated values calculated by the author. Source: Bureau of Labor Statistics, Quarterly Census of Employment & Wages The Home Health Care Industry in Indiana 23

28 TABLE A.5: Per Capita Personal Income for Health Care & Social Assistance Sector in Indiana, 2009 County Personal Income ($ thousand) Population Per Capita Personal Income ($ thousand) Indiana-State Total 19,549, ,423, Adams 34,256 Allen 1,689, , Bartholomew 211, , Benton 6, , Blackford 15, , Boone 102, , Brown 10, , Carroll 15, , Cass 63, , Clark 210, , Clay 27, , Clinton 34,367 Crawford 4, , Daviess 30,620 Dearborn 54, , Decatur 24, , DeKalb 42,060 Delaware 485, , Dubois 162, , Elkhart 524, , Fayette 68, , Floyd 193, , Fountain 16, , Franklin 23,148 Fulton 20,265 Gibson 49, , Grant 227, , Greene 32,463 Hamilton 713, , Hancock 84, , Harrison 29, , Hendricks 225, , Henry 47,827 Howard 196, , Huntington 59, , Jackson 42,362 Jasper 37, , Jay 37, , Jefferson 33,010 Jennings 29, , Johnson 261, , Knox 99, , Kosciusko 144, , LaGrange 37,204 Lake 1,769, , County Personal Income Population Per Capita Personal Income LaPorte 298, , Lawrence 83, , Madison 321, , Marion 5,024, , Marshall 73, , Martin 3, , Miami 37, , Monroe 453, , Montgomery 37,862 Morgan 79, , Newton 4, , Noble 52, , Ohio 3, , Orange 30, , Owen 22,397 Parke 16,896 Perry 16, , Pike 12,259 Porter 406, , Posey 26,004 Pulaski 13,614 Putnam 36,837 Randolph 25,696 Ripley 58, , Rush 13, , Scott 17, , Shelby 52, , Spencer 20,039 St. Joseph 1,082, , Starke 23,530 Steuben 33,579 Sullivan 14, , Switzerland 4, , Tippecanoe 693, , Tipton 11, , Union 7,040 Vanderburgh 1,039, , Vermillion 22, , Vigo 461, , Wabash 64, , Warren 11, , Warrick 141, , Washington 16, , Wayne 281, , Wells 69, , White 19, , Whitley 38, , Note: Highlighted counties indicate estimated values calculated by the author. Source: U.S. Bureau of Economic Analysis 24 Center for Business and Economic Research Ball State University

29 TABLE A.6: Trends in Health Care Subsector Employment in Indiana, Year Total Sector 62 Employment Subsector Percent Share of Total Sector 62 Employment Sector 621 Sector 622 Sector 623 Sector , , , , , , , , , , Source: Bureau of Labor Statistics, Quarterly Census of Employment & Wages TABLE A.7: Trends in Health Care Subsector Establishments in Indiana, Year Total Sector 62 Establishments Subsector Percent Share of Total Sector 62 Establishments Sector 621 Sector 622 Sector 623 Sector , , , , , , , , , , Source: Bureau of Labor Statistics, Quarterly Census of Employment & Wages TABLE A.8: Average, Real Annual Payroll for Health Care Subsector Employees in Indiana, Year Sector 62 Payroll in dollars Subsector Payroll in dollars Sector 621 Sector 622 Sector 623 Sector , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , Adjusted for Inflation Source: Bureau of Labor Statistics, Quarterly Census of Employment & Wages TABLE A.9: Trend in Ambulatory Health Care Personal Income in Indiana, Year Personal Income in dollars ,954, ,391, ,630, ,152, ,335, ,623, ,892, ,146, ,486, Note: Adjusted for 2010 inflation using CPI data from Bureau of Labor Statistics Source: U.S. Bureau of Economic Analysis The Home Health Care Industry in Indiana 25

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