Volume 4 Issue 16, August 1, 2017
The preponderance of contracted services for people with intellectual/developmental disabilities (I/DD) are provided by the employees of organizations, including nonprofit and for-profit entities. Because many of the services are labor intensive, these employees likely number in the hundreds of thousands nationally, with most in direct support of individuals with I/DD. Numerous factors, including worker shortages and downward pressure on reimbursement rates, are undercutting the traditional employee approach, especially in rural America.
In many states, the independent contractor (IC) model is emerging as a viable option. The IC model has a long history in many areas of our economy (e.g. the trucking industry), including private duty home care, and is scrutinized carefully by the US Department of Labor (DOL), as well as the Internal Revenue Service (IRS), for compliance with significant regulations. Recently, the expansion of the IC model for in-home and host home (aka child/adult foster care-type homes) I/DD services points to a new direction in service delivery.
The IC model has the potential to transform the I/DD marketplace in the following ways:
There is no question that the IC model does not fully address some of the important benefits, like health insurance, that generally are associated with the employee model. Yet, many employers are reducing these benefits to the point of becoming meaningless. What may be most important is a trend that was heralded by Daniel Pink in Free Agent Nation over 15 years ago – a workforce that values independence and autonomy to the point that they feel more secure as an independent contractor than as an employee.
Tom was the Founder and Managing Partner of VERTESS. He was a Certified Merger & Acquisition Advisor (CM&AA), consultant, and Licensed Psychologist with over 35 years of very successful national experience in the healthcare marketplace, including co-founding and building a $25 million behavioral health/disabilities services company. Tom represented sellers and investors across the healthcare spectrum and was recognized for his executive leadership in the 2005 Entrepreneur of the Year issue of Inc. Tom passed away in December 2018.