{ April 20, 2022 }
This post continues the threads of a previous post, The Value of CDC Subsidy for Family Home Providers. In that post, we covered the implications of temporary policy and reimbursement changes (Step One) made by the Michigan Department of Education. In this post, we will review the changes from Step One to Step Two and introduce a second version of the calculator.
As a reminder, we’re using a cloud tool (JSCalc.io) to develop custom revenue calculators specifically for family home providers serving children with CDC subsidy. The goal is to show the revenue a home child care, serving up to six children, could make accepting only CDC payments.
Step Two of the Rate Increases
The figure to the right contains all of the Step Two rates published by MDE and are valid from April 10, 2022 through October 8, 2022.
Note, however, that we’re now talking about a decrease–an approximate 10% step down from Step One. This is the trend planned through Step Four (where the plan is to remain at Step Four ongoing as of April 9, 2023).
How will this step change our prior revenue estimates? Let’s find out.
If you want to brush up on how to interact with the calculator, please quickly scan through our previous post introducing the calculator (The Value of CDC Subsidy for Family Home Providers).
A few thing to keep in mind: it’s possible for you to enter combinations of children and hours of care that are incompatible with child care regulations (e.g., staff to child ratios depending on child ages). For example, full-time care of half a dozen infants by a family home (capacity 6) is not possible due to obvious staffing ratio limitations. When entering possible combinations please keep licensing regulations in mind. You can find them here, on page 8.
We will continue to update our blog with new calculators as the rates change so stay tuned.
Test Case: What is it Worth?
Continuing with our previous example, here is a home provider with a 3 Star rating with Great Start to Quality that cares for two toddlers 81+ hours per week. As you can see in the screenshot below, I answered the GSQ question and the age and hours questions for two children (inputs) and our results show a biweekly revenue of $1,386.00 ($693.00 x 2 children) and a monthly revenue of $2,979.90 (outputs).
Recall that the same family provider situation (3 Star rating with GSQ and serving two infant/toddlers 81+ hours biweekly) yielded $742.50 per child per biweekly period. Since the new biweekly rate was $693.00 per child per biweekly period, that means we’re seeing a relative decrease of 9.33% ($693 / $742.50) for the same work. In this scenario, let’s assume the provider works 90 hours (the same figure used in MDE block billing to represent 81+ hours).
Try the embedded calculator below!
If the embedded calculator above doesn’t work for you then please see the link below.
