Cooperative Care: A Cooperative Model for Homecare

By John W. Lawrence

The keynote speaker at the Second U.S. Federation of Worker Cooperative Conference was Rick Surpin. In 1985 Rick founded Cooperative Home Care Associates (CHCA), the first worker-owned home care cooperative in the United States. CHCA now employs over 1,000 home care workers in quality jobs. Virtually all of the worker-owners of CHCA are African American and Latina women. CHCA aims to change the home health care industry by modeling their philosophy of "quality care through quality jobs." To that end, CHCA has spun off a number of partnership organizations. For example, Rick is currently the president of Independence Care System (ICS), "a nonprofit, Medicaid-managed long-term care program generating $50 million in annual revenue through its commitment to helping adults with physical disabilities live in their homes independently." Below is a synopsis of Rick's address.

Rick was introduced by Vivian Carrion, a worker-owner at CHCA. "Home health care combines domestic help with nursing services," she said. "I started as a home health aide. The training and job advancement at CHCA have kept many women off welfare. I am now a supervisor. After being at CHCA for a couple of years, I was on the board of directors!"

SYNOPSIS OF RICK'S SPEECH

I have known Vivian for 15 years. She had done homecare work before starting at CHCA without getting paid. She has been a Board member and member of the Worker Council. The work of a homecare aide is the same as a nurse's aide in the hospital. However, you don't have other support. You are a guest in someone's home. You have to manage relationships and do your job. It is a difficult job. All the training in the world does not replace good judgment.

In the 1980's home health care was projected to be a boom industry. We started CHCA with two premises. First, if workers own their own company, they can maximize wages and benefits. Second, good jobs would result in higher quality care. High quality care is not possible without quality jobs. We now have 1,000 home health aides. I never imagined that CHCA would be that large a company.

We did prove the first premise. On average, CHCA pays $11.90 an hour with benefits. We pay 20% higher than the industry average. Our annual staff turnover is 20%. The industry average is 50 to 60%. Forty percent of CHCA administrative staff started out as home health aides.

We could not do any of this without a healthy business. We average 1 to 2% profits a year. Our revenue last year was $21.5 million and we have $2.1 million in retrained earnings. 80% of profits go to workers; 20% to company. 70-80% of workers are owners. Only workers can be owners. A share of the company costs $1000. Usually, this is paid in installments of $3.65 a week for 4 1/2 years. The board consists of 13 members, including 8 elected worker-owners. There is a 20-person Worker-Council. They don't have to be owners.

A CULTURE BASED ON RESPECT AND FAIRNESS

The culture of CHCA is based on respect and fairness. You can only have democracy when the culture is there. Making money is hard enough to do. Creating a company that is good enough to be owned by its workers is a higher bar. Our industry makes money off its workers. Most companies pay their workers as little as possible and pocket the profits. The first three years of CHCA, I did not sleep. Sometimes, I didn't know if we would make payroll. We faced many major challenges. How do you create stable salary positions in an industry that is based on hourly work?

We decided that our future was dependent on influencing the development of Medicare and Medicaid policy. We started the nonprofit Paraprofessional Healthcare Institute (PHI) which is dedicated to supporting research, creating demonstration projects and promoting government policy that support the paraprofessional healthcare workforce. We started a homecare training program in New York City. We also started ICS that serves people with physical disabilities. I am currently the president of ICS.

There were a lot of decisions to be made. We decided not to provide nursing services because nurses (higher in the medical hierarchy than aides --eds) would control the culture of the company. We became unionized. There are pluses and minuses about being unionized. It was not a conflict-free decision.

I stand up here as one person. It took a lot of people to make it work. I would not be here now without the Industrial Cooperative Association (ICA) or without incredible colleagues, particularly Peggy Powell and Steve Dawson. (Peggy Powell is co-founder of CHCA. Steven Dawson is president of the Paraprofessional Healthcare Institute in the Bronx, NY, and co-founder of ICA--now The ICA Group--a technical assistance organization that promotes the development of worker co-ops --eds).

The legal structure is both the beginning and end of a company. It forces management to pay attention to the workers who own the company. I have never worked in a better place. I hope ICS can be equal. To own something and have a sense of ownership for good or bad is part of the American dream.

QUESTIONS

There were several questions from the audience.

How did you manage growth?

Growth has meant different things at different times in our history. We were community development people. We thought we would have a maximum of 200 people. We thought growth was an awful thing. We argued about it a lot. We had to grow to survive in the industry. Growth is hard. It is difficult to develop the administrative capacity to manage growth.

What has changed in the home health care market?

I had to learn the difference between need and market. Market is the ability to pay for services. Medicare and Medicaid have both tried to reduce the amount they are paying. The politics of healthcare has determined what the market is. There are no boutiques in this industry.

There is a legal issue in homecare that most companies don't pay overtime. We pay overtime at time and a half of the base wage. We are probably the only company that pays overtime. There is a major court case in the Supreme Court addressing the issue.

Since we treat dividends as extras we put as much as possible into salary for the aides. We try to pay office staff the market rate. Management is paid lower than the market rate.

Why do you need a union?

When we debated the merits of joining a union, we were worried that a union could undermine the cooperative. However, the union has a lot of political power. We wanted to influence the industry. We need to be allies with the union. In addition, if we were not unionized, we would not get contracts that other companies which are unionized get. At the start we had difficulty with the union. Their staff treated us as if we were in an adversarial relationship. This has been improving.

What is the management/worker pay ratio?

We started out at 10 times difference. It is now 11:1. It is much higher in other companies in our industry.

Rick Surpin can be reached at Independence Care System, surpin@icsny.org or 212-584-2520.

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