A Brief History of Cooperative Home Care Associates

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Cooperative Home Care Associates is the largest worker cooperative in the United States with over 1,000 members (out of 2,000 workers) and revenue upward of $40 million.  How did it get so large?  Here's a brief introduction to the cooperative's 25-year history, with attached readings for a more detailed look.  CHCA's history is not just about it's size - it also provides a lens on the American worker cooperative movement over the last few decades as it reflects strategies and phases seen elsewhere:  

  • a "sectoral" strategy targeting a marginalized worker population for membership
  • a template for replication in other urban areas
  • a robust technical support network alongside the cooperative for education and policy work
  • a transition of cooperative technical assistance providers to business leaders
  • a hesitant but eventual union affiliation

Brief history of CHCA

After two less-successful projects organizing worker-owned businesses for low-income workers (a network of restaurants and a group of carpenters) the founders launched Cooperative Home Care Associates in 1985 as staff in a large nonprofit organization in New York City.  CHCA lost money for the first two years and was supported by the nonprofit during that period.  Because the cooperative has a primary purpose of assisting low-income people to obtain decent employment,  it (or its affiliated nonprofit) has had some foundation and government support throughout its history. 

 

The cooperative was strategically placed in a growth industry.  Changes in Medicare policy were encouraging hospitals to release patients earlier, creating a boom in demand for home health care.  It was also strategically placed to intervene and create systemic change within a labor market that employed the urban poor.  Where the market offered low-quality jobs that provided low-quality service, CHCA restructured jobs with intensive training and support, created full-time jobs from erratic ones, and build career paths where there had been few.   Doing so meant that their home health aides modeled a higher quality service that clients began to expect from all health aides.  In raising expectations across the sector, CHCA was also able to join with other providers to lobby Medicare for higher reimbursements which helped raise income to the workers. 

 

The cooperative created a training program that was initially housed at a local educational institution but quickly moved into the CHCA offices as an affiliated nonprofit.  The program began as the Home Care Associates Training Institute (HCATI) and later became the Paraprofessional Health institute (PHI), an international education and policy organization advocating "quality care through quality jobs."  This nonprofit educational wing began a replication program of CHCA in the early 1990s when the cooperative had around 300 workers.  Replications took place in Boston and Philadelphia, and were planned for other cities.  However, due to the turbulence of Medicare reimbursement policy in the late 1990s only the Philadelphia replication, Home Care Associates survived.  While not directly organized by PHI, the cooperative was used as a template in Wisconsin in 2001 and inspires other groups. 

 

The founding organizers, Rick Surpin and Peggy Powell, found early on that their leadership was necessary in the business, not just as advocates or supporters.  Surpin became the president of the cooperative, and Powell became the director of education.  In a similar migration from technical support, one of the founders of the Industrial Cooperative Association in Boston, Steven Dawson, joined on as the president of PHI after writing self-critically about being outside of the business world looking in. 

 

By the year 2000 CHCA had around 500 workers and was considered a preferred provider to some of the health care contractors in New York.  However, they were still dependent on large contractors that served hospitals and municipalities.  After several years of planning CHCA and PHI launched a third organization, Independence Care Systems (ICS), a contractor that then won a bid to provide labor to assist people with disabilities in several New York boroughs.   ICS contracted with CHCA (and other health care aide organizations) to provide the assistance, doubling CHCA's worker population to 1,000 by 2008.  After gaining another large contract from the city of New York  the cooperative had 1,600 workers by 2010. 

 

With these affiliated organizations, CHCA formed a complex that stretched through the industry's supply chain.  PHI trains workers for CHCA who provides them to ICS.  Meanwhile, PHI advocates for changes in policy to enhance CHCA's position - and the position of workers across the sector.  While cooperatives are not known for their ability to adapt to a changing market,  CHCA and its affiliated organizations made some impressive adaptations. 

 

In the early 2000s, SEIU local 1199 began an organizing drive in the cooperative.  While both the board and the workers were initially skeptical about the value of unionizing, it became clear over time that union affiliation could help the workers achieve policy changes in the industry at large.  In 2004 an agreement was negotiated.  Subsequently a joint Labor/Management Committee was formed as an additional path for workers to participate in the cooperative's governance.     

 

Democratic ownership of the cooperative is achieved with an equity buy in of $1,000, usually over the course of four years.  Members tend to earn a small patronage refund averaging several hundred dollars, but the cooperative maximizes hourly wage and a 401k investment rather than patronage.  The highest:lowest wage ratio was 11:1 in 2006.  Low-income workers tend to be paid at 10% to 20% above market rate, administrative workers at market rate, and executives at less-than-market rate.   80% of total revenue is allocated to wages and benefits of the home care workers.

 

Democratic ownership of the cooperative is enacted in several ways  

  • Serving on CHCA's Board of Directors -  8 of 14 board members are elected, and 95% of those elected have been home care workers  
  • Serving on the Worker Council, a group of 12 workers often made up of board candidates not elected 
  • Becoming a union delegate
  • Serving on CHCA's Labor-Management Committee with 1199 SEIU
  • Attending quarterly regional meetings
  • Annually ratifying the allocation of net income

 

Readings

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