How Home Care Co-Ops Are Sidestepping Some of the Industry’s Biggest Challenges

While there are thousands of home care agencies operating across the U.S., very few are currently considered true “home care co-ops,” or organizations that are owned and directed by the workers themselves.

Some believe that may change moving forward, with the workforce-driven co-op model potentially gaining more popularity amid ongoing labor challenges.

“As a member, you are a co-owner of the company, along with all of the other members that made this same decision,” Katrina Kazda, program director of home care at ICA Group, told Home Health Care.

When caregivers join a home care cooperative company, there’s typically a period where they’re employees. Once they’ve been onboarded and meet a certain threshold — usually a specific wait period — caregivers become eligible to become “members.”

If caregivers choose to become members, they make an equity contribution to the company. Typically, this is a low financial commitment, Kazda explained.

“The equity investment is really low, usually only a couple of $100,” she said. “Often, there are programs where a very small amount of money is taken out of the caregiver’s paycheck each month to pay for that equity. In other [kinds of] cooperatives, the buy-in can be thousands or tens of thousands of dollars.”

Once caregivers join and make that equity contribution, they usually have to sign a member agreement, which outlines what it means to be a member while noting their rights and responsibilities.

“What that [then] means in practice is that you have a voice and a vote in the company,” Kazda said. “You vote for the board of directors, … and the board is made up of people who work at the cooperative. The board oversees both hires and oversees the management of the company.”

Many home care co-ops also have a number of committees pertaining to things like advocacy, member happiness and peer mentoring – all of which can, in theory, help with worker retention. The general idea is to give every member an opportunity to provide input and help strengthen the company, Kazda said.

Co-op launches picking up

Despite the opportunity the co-op model presents for caregivers, adoption has been slow. Currently, there are just 15 home care co-ops operating across the U.S., according to data from ICA Group.

“For the first 25 to 30 years, there was really only one new cooperative that launched every eight years,” Kazda said. “Starting in 2012, we’ve started to see some uptick — at least one to three new cooperatives getting launched every year. I think that the No. 1 barrier is just a lack of information. It’s not a well-known model in the home care industry, but I think that’s changing.”

In particular, Kazda has seen caregivers interested in forming home care startups that would operate as co-ops. There’s also been interest from community groups and nonprofit organizations.

One of the largest and oldest home care co-ops, Cooperative Home Care Associates (CHCA), has been operating since 1985. The organization has largely centered around improving job quality for caregivers, which in turn strengthens care delivery, Adria Powell, president and CEO of CHCA, told HHCN.

“There are many factors that go into the quality of the job,” she said. “We’ve built a model around investing in the workforce, in the form of training supports, job readiness supports, career advancement, and we were working to provide the highest wages and benefits that were possible. When [CHCA] first started, we were able to pay workers higher than the industry average.”

CHCA is a licensed home care service agency located in the Bronx, New York. The organization includes roughly 1,700 home care workers.

When it comes to wages, CHCA isn’t an anomaly. In 2019, home care co-ops paid caregivers, on average, $1.93 more than traditional home care agencies, according to ICA Group.

In 2019, direct care workers earned a median hourly wage of $12.80, according to PHI data.

As far as training and career advancement, nine out of 10 home care co-ops provide training that surpasses state-minimum requirements, and seven out of 10 offer training for board members around financial literacy in order to beef up transferable leadership skills, according to ICA Group.

Additionally, working at a home care co-op might allow caregivers to draw upon all of their talents, Kippi Waters, executive director at Peninsula Homecare Cooperative, told HHCN.

“I have somebody who is a caregiver, and she takes care of clients,” she said. “She also has a lot of experience in marketing and finance. She comes into the office several hours a week and helps me run the business. There are several other caregivers at Peninsula who have that same opportunity of utilizing their specific talents, strengths and skills to help run the operations.”

Port Townsend, Washington-based Peninsula Homecare Cooperative provides home care services to Eastern Jefferson County. The organization has 17 caregivers.

An ‘important differentiator’

At a time when the home care industry is facing major staffing challenges, the co-op model has been singled out for having less turnover than non-co-op counterparts.

The average co-op caregiver turnover rate was 36% in 2019, compared to the industry average of 64%, according to ICA Group.

“This is an incredibly important differentiator for this sector, and one of the primary reasons we believe that it’s going to continue to grow,” Kazda said. “Home care cooperatives are fundamentally structured to support value and support caregivers. There’s a sense of community — really being a part of something.”

Still, home care co-ops are not immune to facing challenges, including ones around staffing. As a result of the COVID-19 emergency, CHCA has gone from roughly 2,200 caregivers to 1,700.

As one of the larger organizations in this sector, CHCA has also had to navigate maintaining a certain level of communication and participation.

“When you get larger, being able to maintain the level of communication and participation that we were able to experience when we were smaller starts to change,” Powell said. “We have to try different strategies and initiatives in order to give people the opportunity to stay connected.”

Waters also pointed to the challenge of maintaining a co-op work environment amid a larger culture that steers away from democracy in the workplace.

“Figuring out what it means to be a worker-owner is not in our culture,” she said. “With worker ownership, you’re really steering the boat. You have authority and responsibility. That takes trial and error.”

Looking ahead, Powell believes that home care co-ops could become more common in home care due to the model’s ability to elevate caregivers while addressing a myriad of industry issues.

“Workers who are the owners think about what’s in the best interest of the workers, but also the organization,” she said. “They want the organization to be successful. There’s certainly an opportunity for co-ops to be the model for the future of home care. We know that the retention rates are higher, and we’re able to recruit workers with the promise of them being able to have agency and governance with the organization.”