UW Center for Cooperatives
Fostering critical thinking and understanding about cooperatives.

Co-op Development Spotlight: Homecare Co-ops

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By Esther West, Cooperative Development Specialist

As the U.S. population ages, there is historic and growing demand for quality, in-home care. Across the nation, more than 2 million homecare workers help people stay in their homes by assisting with daily tasks such as eating, dressing, and bathing. The Census Bureau projects that by 2035, the U.S. population over 65 years old will increase by about 30 million people. In order to meet the rising demand for homecare services, there is an urgent need to recruit and retain homecare workers and to improve working conditions in the industry. Homecare cooperatives are uniquely positioned to address this crisis.

Homecare Industry Challenges

The homecare industry as a whole faces many challenges, which are compounded by insufficient governmental reimbursement rates and complicated regulations. Low quality jobs are particularly taxing on homecare workers, who — according to the homecare specialist institute PHI — face the following issues:

  • Low wages – In 2017, the average annual income for homecare workers was approximately $15,000. As a result, one-fifth of homecare workers live below the federal poverty level and more than half of homecare workers receive public assistance. Wages adjusted for inflation have remained virtually flat over the last decade. A major reason for low wages is the sector’s reliance on low reimbursement rates set by Medicaid.
  • Limited benefits – Most homecare agencies do not offer their employees benefits, and more than half rely on public assistance.
  • Part-time and inconsistent hours – client needs vary dramatically and may change over time.

Cooperatives as a Solution

Cooperatives are playing a role in addressing the homecare crisis. There are 12 active homecare cooperatives in the U.S., two of which are in Wisconsin. UWCC is part of a growing movement focused on using the worker co-op model to address homecare industry challenges in the following ways:

  • Working together at scale – The ICA Group found that while homecare cooperatives provided 3.4 million hours of direct Graph depicting difference in employee turner between co-ops and industry standards. Co-ops have a 30% turnover rate while the industry average is 67%care services in 2017, there is a substantial opportunity for growth since co-ops are only 0.1% of the industry. A larger homecare co-op sector can have a stronger political impact and reduce costs through sharing resources. Another path to scale is through the conversion of existing homecare agencies to the cooperative model. In September, UWCC and The ICA Group will deliver a presentation to homecare agency owners on the opportunity to sell their business to their employees at the Wisconsin Personal Services Association’s 2019 Summit.
  • Worker-focused jobs – Improving worker livelihoods through higher wages and having a voice improves care and increases retention rates. A recent survey by the ICA Group showed that amongst the 2,600+ homecare cooperative workers, wages were $1.84/hour higher than the industry average. Furthermore, it also showed that co-ops outperform non-cooperative agencies in worker retention. Homecare cooperatives have an average turnover rate of 30% compared to the national average of 67%.
  • Support structures – UWCC participates in the annual National Homecare Cooperative Conference, provides direct technical assistance to homecare co-ops in Wisconsin, and contributes to the growing body of resources for new and established homecare cooperatives. These activities help homecare co-ops address issues related to retention, financial literacy, and understanding cooperative governance.

While there are many challenges to overcome in the homecare industry, we continue to grow our power to support better livelihoods through cooperatives – for both workers and those who rely on their care.

How can you get involved?

  • Learn more about the Cooperative Development Foundation’s Homecare Cooperative Initiative here.
  • If you need a homecare services in Wisconsin, consider using the services of:
  • Interested in starting your own homecare co-op? Attend the National Homecare Cooperatives Conference this November in Dulles, VA.

 

References

Cooperative Development Foundation, ICA Group, Lund, Margaret. (2017). The Cooperative Solution to the Caregiver Crisis: A National Strategy Analysis. Retrieved from https://icagroup.org/wp-content/uploads/2019/04/The-Cooperative-Solution-to-the-Caregiver-Crisis_A-National-Strategy-Analysis.pdf

Kazda, K., The ICA Group (2018). 2018 Home Care Cooperative Landscape. Presentation.

U.S. Census Bureau (2018). An Aging Nation: Projected Number of Children and Older Adults. Retrieved from https://www.census.gov/library/visualizations/2018/comm/historic-first.html.

PHI (2018). U.S. Home Care Workers: Key Facts.