Pennsylvania is a paradox of a home care market. It has one of the largest elderly populations in the country, an unusually well-developed Medicaid managed care infrastructure, and operationally lean agencies producing margins that compare favorably to the national average. It also has a workforce crisis severe enough that, by the Pennsylvania Homecare Association's own count, more than 112,500 caregiver shifts go unfilled every month across the state.
If you operate or are looking to start a home care agency in Pennsylvania, the gap between those two realities is the most important thing to understand about the market. This post pulls together data from the 2024 Activated Insights Benchmarking Report (PA custom edition), Pennsylvania Department of Human Services studies, Bureau of Labor Statistics wage data, and PHA's policy filings to lay out what the Pennsylvania home care market actually looks like right now — and what it means for operators.
The Demand Picture: A State Aging Faster Than It's Staffing
Start with the demographic backdrop. Pennsylvania has one of the oldest populations in the United States, and it's getting older quickly.
According to PHA testimony before the Pennsylvania House Aging Committee in January 2025, the state is moving from roughly 1 in 4 Pennsylvanians over 65 today to 1 in 3 by 2030 — a population of more than 4.3 million seniors in just over five years. More than 400,000 Pennsylvanians currently rely on in-home care services, and that number is climbing.
Demand is structurally locked in. The harder question is supply.
The Bureau of Labor Statistics counts roughly 213,000 direct care workers in Pennsylvania today. SEIU Healthcare PA estimates the state needs roughly six times that workforce to meet existing and projected demand. Whether you take SEIU's number as gospel or treat it as advocacy-leaning, the directional point holds: there are not enough caregivers, and there will be progressively fewer relative to need each year.
This is why the headline figure in the 2024 Activated Insights Benchmarking Report's Pennsylvania edition — that 78.3% of PA agencies turned down cases at some point in 2023 due to caregiver shortages — is not an outlier. It's the operational signature of the market dynamic above.
Pennsylvania agencies turn down cases at the highest rate in the country. The binding constraint is caregiver staffing, not demand.
PA leads the country in cases turned down. The Northeast region as a whole is at 66%. National is at 63.3%. Even the high-revenue "Home Care Masters" benchmark — the top-quartile agencies nationally — sits at 61.7%. PA is structurally constrained by staffing, not demand.
The Wage Problem Is the Whole Problem
Read enough Pennsylvania home care reporting and the same number keeps appearing: $13.35–$15.00 per hour. That's the average wage range for direct care workers in the state, depending on which 2023–2024 dataset you pull from.
The 2024 Activated Insights Benchmarking Report puts the median PA Companion/Homemaker wage at $14.00/hour and the Personal Care Attendant wage at $14.25/hour. PHA cites a BLS-derived average of $13.35 in its legislative testimony. A February 2024 Pennsylvania Department of Human Services study estimated that bringing all direct care agency workers up to even $14.58/hour would require an additional $809 million in state funding.
For context on what these workers' alternatives look like, PHA testified that gas stations, warehouses, retail stores, and rideshare driving in the same Pennsylvania labor markets routinely start at $16–18/hour. The wage gap is not subtle, and it's the dominant reason for the workforce attrition the rest of the data captures.
That attrition shows up most clearly in turnover:
2024 Activated Insights / PA custom edition (PA); PHI National 2024 (national). PA agencies replace their entire caregiver workforce every year, plus some.
| Geography | Median caregiver turnover |
|---|---|
| Pennsylvania (Activated Insights, 2024) | 104.3% |
| National (PHI, 2024) | ~75% |
The typical PA agency replaces its entire caregiver workforce every year, with some left over. PA is running roughly 30 percentage points hot vs. the national figure.
The reimbursement context explains why agencies struggle to close the wage gap themselves. Pennsylvania's Medicaid Personal Assistance Services rate is $20.63 per hour. Every neighboring state pays meaningfully more — West Virginia is at $25.44, and others run 25–75% higher than PA, according to PHA. Of that $20.63, PHA estimates roughly 85% flows to direct care worker compensation and benefits, leaving 15% for everything else an agency does — overhead, scheduling, compliance, training, supervision, billing.
A 2024 Shapiro Administration study of Pennsylvania's home and community-based services rates recommended a 23% increase in PAS reimbursement to bring the system into balance. The 2025–2026 state budget allocated $21 million targeting roughly 6% of the workforce — the participant-directed Community HealthChoices model — leaving the agency-employed majority of caregivers out. PHA has since requested a 10% across-the-board increase ($370 million); as of this writing, the broader rate question remains unresolved.
The takeaway for operators: wage compression in PA home care is structural, not cyclical, and it's tied to a Medicaid rate that hasn't moved meaningfully in a decade. Any retention strategy that depends on outpacing local labor market alternatives by waiting for Harrisburg to act is a strategy that loses caregivers in the meantime.
What's Actually Working: The PA Operating Model Is Quietly Efficient
Here's the part of the story that usually gets buried under the workforce headlines.
The 2024 Activated Insights data shows that PA agencies, when they can staff their cases, run leaner than the national average on almost every operating metric:
Three of four major cost lines run leaner in Pennsylvania. Source: 2024 Activated Insights Benchmarking Report, PA Custom Edition.
| Metric (% of revenue) | Pennsylvania | National |
|---|---|---|
| Total Direct Care Expenses | 66.0% | 74.1% |
| Total Sales & Marketing | 3.3% | 5.4% |
| Total Operating Expenses | 20.1% | 27.2% |
Three other PA operating advantages worth flagging:
- Median Weekly Billable Hours per Office Staff Employee: 308 in PA vs. 196 nationally — over 50% higher back-office productivity.
- Median Customer Acquisition Cost: $496 in PA vs. $800 nationally — 38% cheaper.
- Median Annual Revenue: $2.69M in PA vs. $1.64M nationally — PA agencies are larger by a meaningful margin.
The combination of greater scale, higher staff productivity, and lower acquisition costs means the structural margin profile of a Pennsylvania agency is genuinely attractive.
The catch is utilization. With caregiver turnover at 104% and 78% of agencies turning down cases, that efficient back office is sitting on substantial unused capacity. The growth ceiling in PA isn't demand, marketing, or back-office leverage — it's the staffing pipeline.
This shows up in the customer growth numbers:
Despite cheaper customer acquisition and a leaner cost structure, PA agencies barely grew in 2023 — because staffed cases are the bottleneck, not new clients.
PA agencies posted a median customer growth rate of just 0.6% in 2023, against a national median of 10.5% and a Northeast region figure of 8.6%. Cheaper customer acquisition, larger average agency, leaner operations — and yet near-zero growth, because cases that come in can't be staffed.
The Pennsylvania Payer Mix Is Distinctive — and Strategically Important
Most national home care content treats payer mix as a footnote. In Pennsylvania it deserves its own conversation.
According to the 2024 Activated Insights data, PA agency revenue breaks down roughly as follows:
MCO revenue (Community HealthChoices) is the standout: 14.2% of PA agency revenue vs. 0.8% nationally. PA's managed-LTSS infrastructure is structurally distinct.
| Payer Source | Pennsylvania | National |
|---|---|---|
| Private pay | 51.2% | 59.6% |
| Veterans Administration programs | 14.4% | 9.7% |
| Managed Care Organization (MCO) | 14.2% | 0.8% |
| Medicaid Waiver | 11.2% | 3.9% |
| Long-term care insurance | 5.8% | 10.0% |
The MCO line is the standout. Pennsylvania's Community HealthChoices (CHC) program — fully implemented statewide as of January 2020 — consolidated three legacy waiver programs (Aging, Attendant Care/Act 150, and Independence) into a single Medicaid managed care framework administered by three MCOs: AmeriHealth Caritas, PA Health & Wellness, and UPMC Community HealthChoices. Roughly 148,000 Pennsylvanians receive Medicaid-funded in-home support, the bulk of it through CHC.
CHC creates a payer environment that simply doesn't exist at scale in most states. For PA operators, this means:
- There is real, contracted volume available through MCO relationships that doesn't depend on private-pay marketing — a structural advantage over operators in states without managed LTSS.
- Rates are politically determined, and as the wage section above makes clear, those rates have not kept pace with the labor market. Agencies with heavy MCO/Medicaid Waiver concentration are exposed to compression risk that private-pay-heavy operators are not.
- The administrative complexity is substantial. Three MCOs, multiple service authorizations, EVV requirements, and state-level oversight mean that operating efficiently in CHC requires real infrastructure.
The strategic implication: Pennsylvania operators benefit from being deliberate about payer mix rather than letting it drift. Agencies with 70%+ MCO/Medicaid concentration are essentially running a regulated utility. Agencies with 70%+ private pay are running a competitive consumer business. The two require different teams, different marketing, and different back-office investment. Most successful PA operators we see treat the choice as deliberate strategy rather than accident.
Where Pennsylvania Customers Actually Come From
The 2024 Activated Insights report ranks the top customer marketing sources for PA agencies in 2023:
- Word of mouth referrals (past/current customers and loved ones)
- Healthcare professionals — Continuing Care Retirement Communities (CCRCs)
- Internet lead sites — A Place for Mom
- Caregivers/employees
- SEO (organic search)
The CCRC ranking at #2 is a Pennsylvania-specific signal worth noting. Pennsylvania has one of the densest CCRC populations in the country, and the data confirms what experienced PA operators already know — these communities are reliable, repeatable referral sources for private-pay home care work. If CCRCs are not in your top three referral channels as a PA private-pay operator, that's a structural gap in your sales motion.
The recruiting side tells a parallel story. Top caregiver recruitment sources in PA for 2023:
- Indeed.com
- Current employee referral programs
- Agency websites
- Word of mouth/reputation
- "Other" sources
The recruitment cost data backs this up:
Recruitment efficiency frontier in PA: a strong Indeed presence + a paid, structured employee referral program. Paid print is roughly 3.4x more expensive per hire.
| Channel | Mean cost per hire (PA) |
|---|---|
| Church / ethnic newspaper advertising | $4,560 |
| Employee referral programs | $1,361 |
Indeed-sourced hires cost dramatically less than newspaper or ethnic media advertising, and employee referral programs in PA carried a mean acquisition cost of $1,361 versus $4,560 for church/faith-based and ethnic newspaper advertising. For most PA agencies, the recruitment efficiency frontier is a strong Indeed presence plus a real (paid, structured) employee referral program — not paid print.
Five Strategic Takeaways for Pennsylvania Home Care Operators
Pulling all of this together, here's what we'd focus on if we were running or starting a PA agency in 2024:
1. Treat retention as the single highest-leverage investment. Every percentage point you take off PA's 104% caregiver turnover flows directly to revenue (cases you no longer have to turn down), margin (recruitment costs you no longer incur), and quality (consistency that drives referrals). The Activated Insights data showed the PA agencies using vendor-delivered in-person training had dramatically lower turnover than peers using mentor-to-peer or in-home training models — even allowing for small sample sizes, it's a directionally real finding. Structured training, predictable scheduling, and a wage that is at least within shouting distance of warehouse and rideshare alternatives are the table stakes.
2. Decide your payer mix on purpose. PA's CHC infrastructure gives operators genuine optionality between an MCO/Medicaid-heavy book and a private-pay-heavy book. Most agencies drift into a mix without ever making that strategic choice explicitly. Make the choice, then build the operational stack (sales channels, intake process, billing systems) around it.
3. Build a CCRC referral motion if you don't have one. PA's CCRC density is a structural marketing advantage that operators in most other states don't have. The Activated Insights data ranks it #2 for a reason. A dedicated community liaison role, run consistently for 12 months, almost always pays for itself in a PA market.
4. Audit your billing rates on long visits. PA median billing rates lag national medians most sharply on 6–11 hour visits ($30.50 in PA vs. $34.00 nationally) and 12–24 hour visits ($31.00 vs. $33.00). For private-pay operators, that's $3.50/hour of compression on the visit lengths most likely to drive lifetime client value. MCO and Medicaid Waiver rates are what they are, but private-pay rate cards deserve a fresh look.
5. Stay close to the policy story. PA's reimbursement rate trajectory will substantially determine which agencies thrive in the next three years. PHA's 10% rate increase request, the Shapiro administration's 23% recommendation, and the periodic budget cycles in Harrisburg are not background noise — they're upstream variables for any agency with meaningful CHC or Medicaid Waiver volume. Operators who track this actively will have better strategic visibility than competitors who don't.
The Bigger Picture
Pennsylvania is not a market where you grow by being slightly better at marketing than your competitors. It's a market where you grow by being meaningfully better at recruiting, training, and retaining caregivers — because that's the binding constraint, and everything else is downstream of it.
The agencies that figure this out get to enjoy the rest of what makes PA an attractive home care market: large average agency size, lean operating cost structure, well-developed managed care payer infrastructure, dense CCRC referral networks, and demographic demand that's locked in for the next decade. The agencies that don't figure it out spend their energy turning down 78% of the cases that come through the door.
The numbers aren't ambiguous about which path produces better outcomes.
Read this with the rest of the series
- The 7 numbers that tell you whether your home care agency is healthy — including the Home Care Pulse retention data (79.2% annual, 57% of churn in first 90 days) that explains where PA's 104% turnover is concentrated.
- Independent vs. franchise home care: the 5-year profit math — the choice between the two paths in any state, including PA.
- Why home care agencies under-invest in marketing — PA agencies actually under-spend even more than national norms (3.3% vs 5.4%).
Sources
- 2024 Activated Insights Benchmarking Report, Pennsylvania Custom Edition (formerly the HCP Benchmarking Report). Data reflects 2023 operations from 52 PA home care providers across 84 locations.
- Pennsylvania Homecare Association testimony to the PA House Aging Committee, January 28, 2025
- Pennsylvania Homecare Association budget statement, April 8, 2025
- Pennsylvania Department of Human Services HCBS rate study, February 2024
- PHI National, "Understanding the Direct Care Workforce," 2024
- Bureau of Labor Statistics Occupational Employment and Wage Statistics (May 2024)
- Pennsylvania Department of Human Services, Community HealthChoices program documentation
- Spotlight PA and Home Health Care News reporting, 2024–2025
- Industry framing pulled from Carezano's franchise database