Up From the Bedside

As hospital care has become prohibitively expensive, home health care has swelled into a $7 billion industry, generating a wave of corporate investment. Growth has been so rapid that the industry has even attracted interest from foreign companies. Yet the field also has spawned alternatives to the dominant corporate model, including cooperatives that aim to provide economic opportunity to the poor as well as personal care to the infirm.

Traditionally, of course, home care was the responsibility of a family member. If none could do the job, the family brought in a visiting nurse or an aide from a local agency, which was typically run under charitable and religious auspices. The character of home care, however, has changed enormously. The industry has not only burgeoned in size. It has also become more technical, as much of the growth has come from the shift of complex medical services from the hospital and clinic to the home. But there is still a "low-tech, high touch" end to the business, since many of the elderly mainly need help with physical functions to stay out of hospitals and nursing homes. Home care workers who provide that support are less than nurses but more than maids: they help around the house but also assist with rehabilitative exercises, giving medicines, monitoring the client's condition, and the like.

The prevailing pattern among companies that provide basic care-giving services is similar to "temp" agencies. Most home health services provide part-time, low-wage jobs for unskilled women in the urban labor force, with little chance for advancement. And while the women work in health care, they rarely get any health insurance benefits themselves.

At least two promising exceptions to this prevailing pattern stand out. One, the fledgling "service credit" movement, is encouraging seniors to help take care of one another. In a form of time-barter that resembles insurance, volunteers in good health lend assistance to other seniors in poor health, building up credit so they can claim help if and when they need it. Another new alternative is the employee cooperative.

Voluntarism and Enterprise
At Cooperative Home Care Associates (CHCA) in the South Bronx in New York City, the owners don't talk about "product lines" in the style of the corporate home health companies. They see their mission as providing quality care and developing career paths out of what is generally a dead-end job. At CHCA, the 98 owners are employees who care for the elderly and infirm and at the same time have voting control of the company's board.

After five years, CHCA has done well enough to inspire similar enterprises in Boston, Oakland, and Waterbury, Connecticut. This year it is starting an ambitious program to enable its 170 home care assistants -- most of whom were previously on welfare -- to become full-fledged registered nurses. "It was a bright ray of light in a system that didn't have many," says David Gould, a vice president at the United Hospital Fund of New York, an independent philanthropic and research organization that helped fund CHCA's start-up in 1984.

The cooperative shows that enterprise and local initiative don't have to be euphemisms for commercialism and social indifference. What makes CHCA work is a company culture of mutual support and concern. "All the workers love working for this company," says Sarah Lee, a board member who spent twelve years with conventional home care businesses before she came to CHCA.

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New York City alone has close to 100,000 home care workers like Sarah Lee. But they make up an industry that few people see, unless they need it. Home care workers have no central workplace and virtually no contact with their co-workers or, their employer -- a condition that makes union organizing exceedingly difficult. The employees are almost all women, primarily between the ages of 30 and 50. In New York they are mainly Hispanic and black, with a heavy West Indian contingent. Until quite recently, they worked for minimum wages, with no vacations or benefits.

The big money in home care is in technical services, such as kidney dialysis. Care giving alone is less profitable, but there is going to be a great deal of it. People age 85 and over comprise the single fastest-growing segment of the population. By the beginning of the next decade, the federal government alone will be spending billions of dollars a year taking care of the elderly at home. Outside of lavish resorts, two of the most expensive places for keeping people are hospitals and nursing homes. So to hold institutional costs down, the government is almost certain to push spending on home care up.

Home care really took off in the early 1980s after Congress changed Medicare's system for paying hospitals to fixed payments per admission, depending on the diagnosis. Since hospitals were no longer getting paid more for longer patient stays, they quickly saw the wisdom of moving patients out the door as quickly as possible. In an earlier era, daughters and wives could be counted on to take care of the infirm after discharge from the hospital. But with more women at full-time jobs, the task has fallen increasingly to home care workers. States pay most of the costs, and New York has one of the largest programs, along with California, Massachusetts, and Texas.

A Co-op for the Poor
In the early 1980s Rick Surpin was watching these developments from the Community Service Society (CSS), the oldest social service and advocacy institution in the country. He had convinced the organization to try a new direction: building enterprises to employ the poor. His first effort, a worker-owned construction company, was unsuccessful, but home care looked more promising. The field was growing, business relations were fluid, and there was a desperate need for something better than the exploitive temp-agency model on which most companies operated.

An organizer before he went to CSS, Surpin hoped to make a point about economic development as well. Many cities use tax breaks for real estate developers and other investors to spur development. Surpin wanted to show that creating enterprises for low-income workers could provide them real opportunities and keep dollars circulating through the local community There was grumbling that money should go instead to traditional minority businesses. But Surpin thought it wasn't enough to fund minority versions of the white-owned providers. "This was a different model, in which everybody shares," he says.

Surpin put together over $400,000 in loans and grants from such sources as the Campaign for Human Development, the National Coop Bank, and religious organizations such as the Sisters of Charity of Ohio, which support worker-owned enterprises through ethical investment funds. The failed construction company had taught him an important lesson. He had started with the "politically correct" view that management should evolve from the workers -- "an organizer's model instead of a business model," he now says. But the natural leader among the group turned out to be a poor manager and a mediocre carpenter, whose work didn't merit the respect of his peers. 'We started looking at how we could blend the ideological with the practical," Surpin says. "Owners shouldn't be just the first people to walk in the door. They have to earn their membership by proving they at east are good workers."

So CHCA began from the top, with a founder and staff, and recruited home care workers with some experience. Within a year, the company was close to bankruptcy anyway. Its main contractor, a local hospital, was providing only half he hours that CHCA had expected. CHCA's problems partly reflected a basic feature of the home care field. The home are industry has grown up in the shadow of the hospital. Under Medicare and Medicaid, which pay for most home health services, the work is channeled through hospitals and other agencies that provide primary medical care. The hospital wanted to schedule home care as though it were basically an extension of a hospital ward, with an emphasis on morning help with hygiene, medications, and getting dressed. That, however, was not all that clients needed, and it frustrated Surpin's aim to spread the work through the working day.

Surpin had expected to phase himself out after a couple years, but now he had to take over the daily operational side. The company struggled back, and after two and a half years they were making a profit. CHCA now has contracts with such stable customers as the Visiting Nurse Service and Montefiore Hospital. Last year the worker board was able to vote a $500 bonus for each member, the equivalent of a shareholder dividend in a conventional corporation.

Employees can join the coop after three months on the job, though they are not obliged to do so. If they decide to join, they pay one thousand dollars in $3.50 weekly installments over five years. (They get full voting rights after a $50 initial payment.) Close to a hundred of the 170 employees have joined to date. If employees leave or are dismissed, they get their investment back.

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Employee ownership suggests to many a large stream of profits diverted from absentee shareholders and distributed instead among the workers. In practice, that does not describe the low end of home health care. "No one is getting very rich off these companies," says Seth Allen, a business consultant with the Industrial Cooperative Association (ICA) in Boston, who is setting up the home care cooperative there. "It's a very competitive business."

There was enough money, however, for CHCA to pay $4.50 an hour, compared to the $3.35 to $3.70 then prevailing in the industry The coop also provided health insurance. Since then over half the city's home care workers have joined unions, and wages have increased to around $6 per hour. CHCA pays about the same level and is focussing now on a career ladder as well as bonuses for overtime, weekend work, and care of special patients like quadriplegics.

"We tend to think of [coops] as a legal governmental structure for allocating profits," Surpin says. "But that doesn't work if the culture of the coop doesn't fit it." Building a culture of cooperation has been perhaps the biggest challenge in an enterprise without a workplace. All new employees go through the same twoweek classroom training as well as other training sessions during the year. At team meetings they discuss their cases and problems with their co-workers. Employees take excursions to plays, outlet stores, and Atlantic City. The CHCA Christmas party is a big event; one quadriplegic client comes and dances in her wheelchair.

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The humanity of CHCA seems at least as important to employees as the structure of worker ownership. The firm provides an atmosphere that allows their best instincts to flourish. Sarah Lee, for example, was drawn to home care through an experience as a girl in North Carolina. Her father had a stroke, and the family was enlisted for daily twelve-hour bedside shifts. She did just about everything nurses do, and found she liked it. "I like people," she says. "I like helping them. Some of my cases don't have anyone." While her previous employers violated that spirit, the staff at CHCA seems on her side. Employee owners bring a stability and continuity to home care that temp-agency competitors are hard pressed to match. Since elderly people don't want someone new coming to their house every other week, creating good, stable jobs for home care workers can be an important benefit to their patients.

The Unions' Puzzle
Worker coops like CHCA represent a puzzle of sorts for local labor unions. How can a union organize and represent employees who are also owners?

To be sure, a tiny company with under 200 employees is hardly the unions' most pressing problem, especially given the 40,000 home care workers that remain unorganized in New York. But worker coops offer a fertile model that advances many of organized labor's most cherished ends. If unions don't find a way to work with cooperatives, a great opportunity could slip away.

To some extent, union caution regarding worker ownership is born of experience. "It has always come wrapped in bad news," says Allen of ICA. He has in mind the employee stock ownership plans adopted by large corporations such as Weirton Steel under clouds of crisis. But at those companies, employee ownership came in exchange for major contract concessions, and the employees are only passive shareholders rather than active participants in self-management.

In true coops like CHCA, on the other hand, workers function more like real owners. At board meetings they discuss the future of the business as well as wages and working conditions. They control six of nine board seats, and members vote on important policy decisions. "When they make these choices they can't complain," says board member Christine Edley. "It's not like having a boss hanging over you." Employees like Edley are wary of losing control to union officials. "We are not going to rush into anything," she says.

At a more mundane level, the weekly coop payments cut into scarce cash that is available for union dues. "It didn't seem feasible to organize them and then put an extra burden based on the income they were getting," says Ida Garcia, head of the home care division of Local 1199, a New York health care union. Garcia doesn't think that worker ownership, in itself, poses an obstacle to unionization.

Union benefit plans and legal staffs do have an appeal to cooperatives. The AFL-CIO has been encouraging member unions to extend "associate" membership to those who want to align with the labor movement but not necessarily in a full collective-bargaining relationship. Early on, there were discussions between CHCA and District Council 37 of the American Federation of State, Council, and Municipal Employees (AFSCME), impelled in part by the coop's need of a health insurance plan. The two sides agreed on a novel alliance, but it would have required a change in the local's constitution. That was more than the union bureaucracy could handle, according to Carol O'Cleireacain, then the union's chief economist and now Finance Commissioner of New York City

"That's the failure I left behind," O'Cleireacain says. "We could have done it, but it just never became high enough on anyone's priorities."

Surpin hopes to revive the union issue. Meanwhile, the coop is moving ahead with its career upgrade program, which has few if any parallels in the field today. David Snapp, an organizer with the Service Employees International Union, says of his union's home care members in California: "We don't have training for the work they are already doing, let alone a career track."

In essence, the career ladder is a kind of alternative track to a professional credential; CHCA workers will use their job experience to cut the classroom work they will need towards a nursing license. However, the program posed two difficult choices for CHCA. For one thing, the coop will pay these workers for the time spent in class, which means finding substitutes to fill in for twenty of its best people. On top of that, CHCA runs the risk of losing these workers if it cannot find a way to incorporate nursing into its business package.

Surpin thinks that is possible over the next few years. He sees the company growing to perhaps 200 to 300 employees, with 70 percent on full-time salary, which is virtually unheard of in home care circles. In Boston, meanwhile, the ICA's Allen has just completed the feasibility study for the home care coop there. He has lined up a contract with Somerville-Cambridge Elder Services, Inc, a progressive-minded agency, and is approaching funding sources for financing.

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Cooperatives do not face an easy road in the United States. In countries where cooperatives prosper, they usually enjoy the backing of a strong cooperative movement that seeds new organizations and provides technical support, capital, and political muscle. That kind of infrastructure does not exist in the United States. And, individually, coops have internal restraints on growth. Board members at CHCA, for example, worry about losing an atmosphere that is "close-knit and family-like," as Ms. Edley puts it.

To become a significant part of the home health industry, employee coops would need more capital and external support than they now receive. But if nothing else, the coop model demonstrates that there is another alternative to temp agencies employing low-wage home health workers with little hope of advancement. Keeping the elderly out of nursing homes and hospitals certainly makes sense. But the kind of home care services we encourage ought to be of equal concern. The "service credit" alternative and employee coops are two working models that the nation can promote.

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