This article is from the May/June 1998 issue of Dollars & Sense: The Magazine of Economic Justice available at

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This article is from the May/June 1998 issue of Dollars & Sense magazine.

Who Cares for the Caregivers?

Home Care Coops Struggle against Medicare Cuts

By Abby Scher

“I was in so much pain, working everyday,” Betty Cooper was saying. She is not the sort of woman who complains of her troubles. Even now, resting up from knee surgery in her highrise Harlem apartment, she doesn’t spend a lot of time dwelling on them. “You don’t know how long it will take to heal—I’m not in my 20s anymore, I’m 60.”

Betty Cooper—the sort of woman who knows how to take care of everyone else—has to take care of herself for a little while now. She raised four children. She took care of her son while he was dying of AIDS. And, when she was able, she traveled twice a week to visit her mother at a Long Island home. All this, at the end of her 8-hour workdays as a home health aide with Home Health Care Associates, a worker-owned coop in the Bronx.

Who takes care of caregivers like Betty Cooper? In Cooper’s case, it is partly her coop, which, unlike other home care agencies, pays full health and vacation benefits. But in an industry largely created by Medicare reimbursements (Medicare pays for half of all home care), we must ask whether Congress, with all of its attention on budget cuts, payment scams, and malpractice by home are agencies, is seeing to it that the caregivers are cared for too. When Congress cut Medicare’s budget last summer, it failed to ensure the burden of those cuts would not fall on the aids, who, because of their low pay and erratic hours, earn an average of $10,000 a year. The government created and controls the low-wage labor market for the aids, yet it makes no move to secure adequate conditions of work within that labor market.

You hear a lot of horror stories about home health aides. Americans are rightly concerned about the quality of service they receive since we have come to rely more and more on aides like Cooper as the labor force and hospital industry are transformed. An estimated seven million people are assisted in their homes by paid caregivers who make them dinner, change their sheets and bedpans, help clothe and bathe them, and even administer medications. Our traditional caregivers—mothers and daughters—are working full time in historic numbers. At the same time, there are more and more elderly Americans living longer, becoming frail, and needing care. In the late 80s, advocates and policy makers discovered home care as a way to allow the elderly to remain in their communities while avoiding costly nursing homes. And with profit conscious managed care and insures in control of health decisions, hospitals are discharging patients who are still too ill to care for themselves.

If not for home care, the burden of these shifts would be borne largely by those who usually shoulder such burdens—the women in the family. But the marketplace treats the aides who are their liberation with the same disrespect it treats child care workers and others hired to do traditionally “women’s work.” Agencies take 75% of the fee Medicare pays for the aides’ visits – far more than the 40% to 50% the agencies reserve from visits by nurses and therapists. Even before the cuts, the aides received less than the $8.16 an hour officially recorded as the median because the agencies—including one of the coops—fail to reimburse them for their travel time between jobs. Once as little as three hours of travel time are taken into account for a 5-hour work day, aides are paid less than the federal minimum wage of $5.15 an hour.

Still, the number of home care aides keeps growing—doubling from 344,000 to 610,000 from 1991 to 1995. Home aides are in the fastest growing job category in one of the fastest growing sectors of the economy. Despite the importance of the work, however, the jobs are taken by those who have almost no other choice. And the government is not pursuing the most obvious and equitable way to improve the quality of home care and to reward committed caregivers like Cooper—improve the conditions of the workers through regulation.

Congress Seeks Scandal Not Solutions

Cooper felt a calling because of her own horror stories—the disrespectful and uninformed aides who stayed with her ill son Eric while she was at work as a lab technician. She entered the business after she was downsized partly because she didn’t want other families to endure the same humiliations. “The problems he had! My son asked me, ‘Mom, make sure you let them know I’m HIV positive. Sometimes the agency doesn’t tell them.”

“I just watched the people who came into my house—one girl sat in my house from 9 a.m. to 5 p.m. with plastic gloves in her hands,” not even aware of how the HIV virus is transmitted.

Knowing the public’s concern, Congress conducts investigations into home care hoping for blaring headlines back home. There are plenty of scandals for them to find. There are home health aides who steal from their clients, mistreat or even kill them; agencies that overcharge Medicare of Medicaid for work never done… It’s a mess. The scoundrels may be a small, fly-by-night agency—but home health care is notoriously underregulated—or a big multinational. Last year, the government secretly taped Columbia/HCA Healthcare Corporation staff agreeing to falsely charge Medicare for home care instead of hospital stays to boost their earnings—after all the company only got a per diagnosis fee for hospital treatment but could charge by the hour for care given outside of the hospital. The Government Accounting Office told Congress last June that only 6% of claims are spotchecked, a drastic drop even as home care has quickly grown. Between 1990 and 1996, Medicare spending on the service grew 20% a year.

What Trickled Down to Home Health Aides in 1996

  • Average Medicare payment for a home health aide’s visit: $55
  • Average payment of home care aides/homemakers per visit: $14
  • Average hourly wage of home care aides/homemakers: $8.16
  • Average annual income of home care aides: $10,000
  • Source: Basic Statistics About Home care, National Association for Home Care (November 1997).

Fraud seemed so out-of-control that in September President Clinton issued a moratorium on any new home care agencies getting business with Medicare patients (an initiative that incidentally helps expand the business of the established corporate players in home care who pad Democratic Party coffers). And it is exactly this fraud and rapid growth that make home care a favorite target of budget cutters. Last summer, in behind-the-scenes wheeling and dealing, Republicans targeted Medicare for cuts in the balanced budget agreement, and “the President swallowed the Republican plan without talking to the stakeholders—the was no input,” says Paul Kumar, of the Service Employees International Union (SEIU) in Washington D.C. “They simply looked at the home health care budget—‘it’s ballooning, there must be fraud, chop’—without looking at all the reasons for growth1” says Deborah Briceland-Betts, executive director of the Older Women’s League.

The shakeup is slowing growth in the industry without helping either patients or the Betty Coopers of the world. In typical managed care madness, the balanced budget agreement caps spending below 1993 levels, and limits both the number of visits and amount that can be spent per patient. This cut Medicare’s home health spending by 22%, to be followed by another 15% cut in the year 2000. Plus it phases out an HMO-style payment scheme that, by 1999, will pay, not for work actually done, or work actually needed, but a predetermined amount based on the patient’s diagnosis. Let me say that again. Far from improving their labor conditions, our government decided to pay home health care workers as though they are performing “piece work” in a garment sweatshop—taking a leaf from the HMO playbook, Medicare will pay agencies not per hour of work, nor even per visit, but per diagnosis.

The spending caps already in place have home health agencies in turmoil. Large agencies are swallowing smaller ones that can’t make it, and all of them are cutting back on pay and the quality of patient care, including the number and length of their visits. Layoffs have already begun. Is this the efficient industry the cuts were intended to create?

How the Coops are Coping

Until now, the coops pieced together an alternative model for fixing home health care. The were founded by former coop consultants with the ICA Group in Boston, who think big about the power of coops to reshape an industry. They know that callous treatment of workers means bad care of patients. While coops’ hourly pay is slightly lower than average, they pay benefits. And their managers make a concerted effort to give their caregivers full-time work. Most agencies don’t even try. They only hire caregivers for morning and evening jobs, the most requested times of the day. The coops also extensively train the aides (using welfare-to-work and other outside funding), instilling a sense of professionalism and commitment to the job. As coops, workers themselves elect their fellow aides to serve on boards overseeing the agencies’ management and operations.

Because of these strategies, turnover of worker/members at the coops has been surprisingly low, about 20%, no the 40% to 60% seen at other agencies. This is true at Cooper’s coop in the Bronx, but also at its sister coops in Philadelphia, Boston, and a brand new one in Lowell, Mass. Their trained workforces—almost entirely former welfare recipients—have won the respect of the Visiting Nurses Associations and others who hold contracts with them. And because the New York coop is so large—with 250 workers—it can help set a standard other agencies are challenged to meet.

Cooper’s commitment to her job prompted her to travel as far as the subway would take her. She has slept in a dorm at a New York university to work with a disabled student who needed an assistant 24-hours-a-day. She traveled to the North Bronx by two buses and a subway to provide care for an elderly woman suffering from chronic pain, who lived crowded in a small, one-bedroom apartment with a psychologically impaired son who was utterly unable to help. Cooper felt lucky because these jobs were full-time. Those days are long gone. Cutbacks make it harder for the agencies to piece together a full day’s work schedule for the aides and reward their commitment. “Most of the cases are two-hour cases, so to get a full day you have four cases,” says Lysa Miller-Reid, the 25-year-old mother of two boys who is an administrative assistant and occasional aide with Cooperative Home Care of Boston, and a worker representative on its board.

Seth Evans, president of the Boston coop, recalls, “When Lysa first came here, it was easier for us to get full-time work for people. We averaged about 35 hours a week for people, and that was our goal. We’re down to 32 now.” Throughout the country, only 56% of home care aides worked full time in 1993, a proportion that can only have worsened.

“In New York, we’re much more protected because there are more Medicaid dollars here,” says Steve Dawson, president of the Paraprofessional Health Care Institute, the nonprofit linking the various home care as part of their Medicaid package. Dawson even predicts the New York coop will grow by 25% this year—the same as last year—because of growing business from its biggest customer, the Visiting Nurses Association (VNA). Although VNA was slapped with a 25% budget cut, it is giving the coop an even bigger share of its home care business because “they’ve decided to compete on the basis of quality, and they can’t do that with the big providers that treat their workers horribly.”

The Boston coop does not have it so easy. But it has come up with creative ways to forstall turnover and help stabilize its workforce in the face of the cuts. Unless the coop can guarantee full-time work, it will lose its trained worker/members to other jobs, especially now that the overall job market is tight. This could lead to high turnover among aides, and eventually, to declining quality of care as more of its workers are newly trained—surely the opposite of what Congress intended. High turnover also means the coops will not be able to train their members for leadership—an important goal for the coops since most of their members are black or Latino, while their founders are largely white.

How Much Medicare Money Do Health Caregivers See for Their Home Visits?

Average Charge Per VisitPercentage Paid to Caregiver
Home Health Aides$5426%
*Includes physical and respiratory therapists
Sources:Basic Statistics About Home Care, National Association for Home Care (November 1997).

The Boston coop plans to guarantee a minimum number of hours for its senior aides. “It’s going to cost us a lot of money, but we’re going to pay for it with foundation grants,” says Evans. It also began charging more to pay aides for their travel time in between assignments. This may put the coop’s care out of reach for their lower income clients who have no insurance to provide a “copayment” above what Medicare will reimburse.

“We also stopped our entry level training program, directing the money to hire new marketing staff so we can be more diversified in the services we offer,” Evans continues. This will build business for the coop workers with private clients who don’t depend on Medicare reimbursements, and also with nursing homes and other facilities that might need their help occasionally.

“With many aides leaving home care because it’s a deadend job, the Boston coop is devising a job ladder for its members. Since the days of Florence Nightingale, nurses improved their standing in health care by professionalizing—they became better trained and took on more medical responsibility, allowing them to bargain for higher wages. The Boston coop is considering something similar by offering its members training as certified nurses assistant at a community college. This would open a career ladder into better paying work in the home care field and open up more opportunities for a coop member to piece together a full-day’s work.

The Need for Government Action

Although the coops sidestep the damaging, profit-minded habits of giants like Columbia, there is only so much they can do on their own about declining wages and disappearing full-time jobs. But just as the New York coop can influence its local home care industry, so too can coops influence the national scene, albeit in a limited way. “Our presence in the mix makes a difference. I’ve seen it in the whole crisis,” says Evans. “We think like organizers.” The coops are forging alliances among elder advocates, unions, and the most business-minded industrial players to stop the transition of Medicare to an HMO-style payment scheme. Congress is already deliberating about whether to slow down, though not cancel, the implementation of the cuts.

The coops also are leading a public relations lobbying effort in alliance with the Older Women’s League and Service Employees International Union to convince Congress that it must do more to raise labor standards within the whole industry. After all, it is an industry controlled by the government. If we stretch our memories, there was once a time, back before privatization, when we expected that city, state, and federal governments, by respecting their own employees and paying them well, would help to set a standard and elevate the conditions for workers throughout a labor market. As it stands, the government in its budget cutting frenzy is paying little attention to the working conditions of home health aides, who, though not government workers, are paid with government money through subcontractors. Congress does not seem to notice or care that bad treatment of workers lead to bad care for the most vulnerable, homebound patients. It does not ask how much of Medicare of Medicaid reimbursements to home care agencies and HMOs actually trickle down to the home care worker, nor does it require agencies to report on labor conditions so we know how women are treated throughout the field. Yet this kind of disclosure might give home care consumers the power to influence work conditions in the field, say the coops. How much are workers actually paid? How many hours do they work? Do they receive health benefits? How were they trained for the job? Is there a lot of staff turnover? If the government forces agencies to disclose this information to their potential clients, it gives the power to build relationships with fair employers. Most dramatically, before Congress approves any more Medicare cuts, the agencies argue, it should devise a “labor impact statement” that determines how the cuts would affect workers, and require that aides be paid 150% of minimum wage and receive health benefits.

Without regulations enforcing fairness, government cutbacks in home care will lead, not to “efficiency,” but to work speedups and even worse care. “It’s a very confusing time about whether the paraprofessional workforce will be valued or not valued,” says Dawson. “But there’s potential for turning things around.”

Sources: “Basic Statistics About Home Care,” National Association for Home Care (November 1997); “The Balanced Budget Act of 1997: Effects on Medicare’s Home Health Benefit and Beneficiaries Who Need Long-Term Care,” Harriet L. Komisar and Judith Feder (Institute for Health Care Research and Policy, Georgetown University, February 1998); “Assuring Quality Care by Creating Frontline Jobs,” Statement of Home Care Associates Training Institute submitted to Advisory Commission on Consumer Protection and Quality in the Health Care Associates Training Institute submitted to Advisory Commission on Consumer Protection and Quality in the Health Care Industry (September 1997); “Medicare: Control Over Fraud and Abuse Remains Elusive,” Statement of Leslie G. Aronovitz to Permanent Subcommittee on Investigations, Committee on Governmental Affairs, U.S. Senate (June 26, 1997).

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