Wisconsin Leads the Way in Caregiving Co-ops

Thursday, December 28, 2006 10:44 AM CST

Editor's Note: This week's column is written by Margaret Bau, a cooperative development specialist with USDA Rural Development in Wisconsin.

We in rural Wisconsin are the future.

By the year 2030, about one in five Americans will be over the age of 65. In many parts of rural Wisconsin, this is already true.

Thanks to advances in medicine, public health, and good nutrition, we are living longer, healthier lives than any previous generation. In fact, the fastest growing segment of the population are those aged 85 and over. People are also surviving injuries and illnesses that in previous decades would have been fatal.

These trends have profound implications for how we care for our parents, each other, and ourselves. Almost 55 percent of those aged 85 and over need help with the basic activities of daily living such as bathing, grooming, toileting, and getting around the house. Others need assistance with preparing meals, housekeeping, and managing medications.

Needing care does not mean a one-way ticket to a nursing home. Nationally, only 18.2 percent of those aged 85 and over (and 4.5 percent of those aged 65 and older) live in nursing homes. With a little assistance a few hours a day, most seniors can live in their own homes. With consistent and reliable help to get ready for the day, people with disabilities can enjoy independence and participate in the workforce.

To assure that elders and people with disabilities can be cared for at home, we need to cultivate a quality workforce of caregivers. But the current situation prevents that from happening.

The labor reality

There are people in Wisconsin who have a desire to care for others. Caregivers describe it as a vocational calling or their life's mission. But the sad fact is that individuals cannot pursue a vocation of home caregiving without plunging themselves and their families into poverty.

The labor reality for home care is grim. Nationally, the median wage is $8.12 per hour. Most caregivers receive no health insurance or benefits. Some do not even earn workers compensation. (Technically, some homecare is considered domestic labor and therefore exempt from workers compensation coverage.)

Labor economists refer to home care as a pink collar labor ghetto. Nine out of 10 caregivers are women. Due to the nature of homecare, injury rates are high. Most elders or people with disabilities request care early in the morning or in the evening, making it difficult for caregivers to piece together a 40 hour work week.

Caregivers report that some in society look upon their work as menial or even unskilled. Nothing could be further from the truth. Consider the psychology necessary to negotiate with a senior confused by Alzheimer's or to comfort a young man coming to terms with paralysis.

With all of these economic disincentives to pursue home caregiving as a career, is it any wonder that 40 to 100 percent of caregivers quit during the year. Most entry level caregivers last less than three months on the job.

This labor force turmoil is startling; especially since research shows that for frail elders, quality of life is dependent upon developing a long-term relationship of trust between caregiver and care recipient. How can an elder feel at ease when her front door becomes a revolving door for well intentioned but underpaid caregivers?

Something special in Wisconsin

Something special is quietly happening in Wisconsin that may transform the way homecare is delivered - worker cooperatives of home caregivers.

Rural Wisconsinites are familiar with the co-op model when it comes to providing vital services such as marketing milk, acquiring electricity, and accessing financial services. Now add to that list the provision of homecare to the elderly and people with disabilities.

As with any cooperative, the members own the organization, they have a democratic voice in setting policies, and all benefits return to them. Worker cooperatives tend to be flat organizations and keep overhead to a minimum. Co-ops need not make a return on investment for external shareholders or pay royalty fees to a national franchise.

These structural elements allow worker co-ops to maximize caregiver wages and benefits while delivering services at market rates. Nationally, the average cost to consumers for personal care is $19 an hour and $17 an hour for chore services.

The co-op structure also facilitates decision-making and leadership among caregivers who know firsthand what is happening in the homes of their clients.

Waushara County lights the way

Wautoma is home to America's first rural worker cooperative of homecare providers. Cooperative Care opened its doors in 2001. The co-op's 95 member-owners care for over 120 people in Waushara, Green Lake, and Winnebago counties.

Most Cooperative Care member-owners earn $10.25 an hour - a full $2 an hour more than the industry median. Cooperative Care members have workers compensation. Depending upon the number of hours worked, members also enjoy benefits such as health insurance, time and a half pay for holidays, mileage reimbursement, and two weeks of paid personal time.

Since opening for business, Cooperative Care has been a financial success. Each year the co-op has returned patronage refunds (profit sharing) to members in proportion to the number of hours worked. Over the years, those patronage refunds have ranged from an additional $.58-$1.39 per hour worked.

Early in the history of Cooperative Care's formation, caregivers decided that every member should have access to health insurance. Presently, 14 members participate in the co-op's plan. Those insurance recipients receive a greater proportion of the co-op's benefits than the majority of members who are covered by external plans.

No one enters into the homecare profession with visions of getting rich. But for the members of Cooperative Care, the combination of wages, benefits, and patronage refunds totals roughly $12.92 per hour. Not bad for Waushara County with a per capita income of $22,220 a year.

The Fox Valley inspired

The success of Cooperative Care inspired another community effort to create a homecare worker cooperative, this one based in Appleton. The Circle of Care Cooperative commenced operations in April 2006. The co-op is owned by 38 members who care for 50 elders and people with disabilities.

The Circle of Care Cooperative serves a mix of urban and rural areas in the Fox Valley. This cooperative also started with experienced caregivers who provide homecare to low income elders and people with disabilities in Outagamie County.

Like Cooperative Care, the Circle of Care Cooperative entered into contracts with surrounding counties (Winnebago and Outagamie) to provide homecare. In addition, this co-op markets itself to people who pay for services out of their life savings or through long term care insurance.

In the Fox Valley, the Circle of Care Cooperative entered into a market already served by a dozen existing agencies. Some of those agencies are long established nonprofits; others are start-up for profit franchises. But all the agencies face a similar dilemma - recruiting and retaining caregivers.

With wages at $2-$4 an hour more than existing agencies and the potential for benefits and patronage refunds, caregivers are eager to join the co-op. The Circle of Care Cooperative is in the enviable position of currently having more member-owners than clients. This situation should soon equalize given that the co-op's service prices are at market rates.

It's about respect

But it is more than higher wages, benefits, and patronage refunds. Caregivers desire respect and being treated as professionals.

In our society, small business ownership is esteemed. Being an owner of one's livelihood carries a level of pride and responsibility. It is the difference between being a laborer and a craftsman, the difference between carrying out orders and being a professional.

Labor research suggests that front line workers desire a voice in decisions that affect them. The worker cooperative structure fosters a climate of initiative and leadership.

As with any Wisconsin co-op, only members - all of whom are caregivers - may serve on the board and set policy. Cooperative Care creates standing and issue specific committees to seek an array of caregiver opinions. For example, these committees identified training desired by fellow members, instituted a weekend coverage policy, and provide moral support to clients and caregivers through pay day socials, family picnics, and craft fairs.

Cooperative Care created a mentoring program. A grant allowed the co-op to train seasoned caregivers in leadership, coaching, and problem solving skills. Each mentor is matched with a half dozen fellow caregivers. The mentors are on call to brainstorm when problems arise, to reinforce proper lifting techniques, and to lend an ear when a caregiver just needs to talk.

Quality assurance is an ongoing concern in the home care industry. The personnel and education committees designed a performance review in which members self evaluate and hold each other accountable based on how well they demonstrate Cooperative Care's values. Though professional standard setting is common in other careers, it is practically unheard of in homecare.

Another concern in the homecare industry is the disruption of care. In agencies facing high caregiver turnover, clients often have no idea who will appear at the door to deliver care. At the fledgling Circle of Care Cooperative, caregivers created a back-up team approach. Each client receives care primarily from one caregiver. However, clients are assigned one to three back-up caregivers in case the primary provider falls ill or takes vacation. The client and back-up caregivers meet in-person, avoiding the awkwardness of a cold call.

Being an owner-member

The psychological conversion from being an employee to being an owner is not easy. Members will need continuing co-op education and leadership training. But it is worth the investment.

With collaboration, more local caregiver co-ops could be formed. But this will require seed money to engage a local coordinator and start the grassroots process. We are talking a $60,000 to $75,000 grant per project. But the return on a public investment - from the perspective of care recipients and care providers - would be money well spent.

Some may wonder if low income women with limited formal educations are up for the challenge of owning their own agencies. But look at the farmers of Wisconsin. Fifty years ago, few farmers had more than a high school education. Through skills developed via serving on cooperative boards and committees, many farmers assumed leadership positions on school boards, county boards, and the state legislature. Perhaps homecare worker co-ops could be a vehicle for low income women to become more engaged in their communities.

A sea change in Wisconsin

Wisconsin is undertaking a major shift in how low income elders and people with disabilities receive care. Historically, Wisconsin had one of the highest per capita number of nursing home beds in the nation. But we learned that institutionalization is the most costly and least desired way of delivering care.

The governor, state legislators, and the Department of Health and Family Services deserve kudos for directing more resources towards homecare and eliminating the two to 10 year waiting lists to receive services via the Family Care program.

But without an investment in a stable labor force of caregivers, this admirable program will grind to a halt.

Currently the reimbursement rates that the state and most counties pay to agencies is too low to cover rising business liability insurance, workers compensation, and health insurance costs. Co-ops render the biggest bang for the public buck. But even co-ops have a point at which they will be forced to limit the number of low income clients they can serve.

A win-win situation

From a public policy standpoint, homecare worker cooperatives are a win-win situation.

For families seeking homecare, they can take comfort that their life savings are directed to the people who provide care, not lining the pockets of corporate investors. For citizens paying taxes to care for low income individuals, they can be assured that their public dollars are going directly to caregivers.

For caregivers, the co-op model offers the highest level of wages and benefits given market constraints and reimbursement rates. Fair pay, benefits, and a voice in decision making allow caregivers the opportunity to make homecare a career, not just a job until something better comes along.

Most importantly, for adults with disabilities, dependable caregivers mean independence and the ability to get to work everyday. For elders, a relationship can be built with the same caregiver, resulting in an improved quality of life.

Margaret Bau has been a cooperative development specialist with USDA Rural Development in Wisconsin since 1998. She was intimately involved in the formation of Cooperative Care and the Circle of Care Cooperative. Cooperative Care was recognized as the Top Rural Initiative in 2003 by the Wisconsin Rural Partners and named a finalist in the prestigious 2004 Innovations in American Government award by Harvard University.

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