Simply the Best: CHCA’s Employee-Ownership Model

Cooperative Home Care Associates’ Proves the Business Case for Employee Engagement

Cooperative Home Care Associates Training

New employees of Cooperative Home Care Associates receive twice the legally required amount of training — improving employee morale, reducing turnover and enhancing care.
Photo by Kevin Chu + Jessica Paul

The offices of Cooperative Home Care Associates make a lovely sound. You’ll notice it when you step into the lobby of their office building in the Bronx, New York.
It gets a little stronger when you step into the elevator at the beginning of a workday. And it reaches its full volume in the sun-filled 13th-floor offices where CHCA’s business is conducted.

It’s the sound of happy, fulfilled people at work.

CHCA has, arguably, tackled one of the toughest jobs in America. It provides home health care for low-income urban clients. To do that well, it has to recruit and train about 600 health care workers every year from a community plagued by multigenerational unemployment. CHCA sends those workers into homes to attend to elderly and seriously ill clients, and then secures payment through the labyrinthine and often frustrating public agencies that serve the poor.

At its founding in 1985, CHCA established itself as an employee-owned cooperative. Today, it’s North America’s largest, with 2,300 employees, about 1,100 of whom are employee-owners. The majority of the worker-owners at any given time are Latina or African-American women who live in the communities they serve. CHCA generates almost $65 million in annual revenue. The company has been profitable for nearly all 31 years of its operation.

Like other companies that we have honored as Best for the World firms, CHCA was conceived in an uncompromising spirit. The founders set out to provide home health care to people who desperately needed it. They set out to provide the best care available. And they resolved to build a business that creates not only a high-quality product, but also high-quality jobs and shared prosperity among the people involved.

Surprisingly, the employee-owners have embraced both their own opportunities to own and run the company, and their right to negotiate with their managers and public agencies from a position of power. The workers are members of the Service Employees International Union, effectively allowing them to influence company policy and public policy from two perspectives — as corporate owners and unionized laborers. Yes, that means the workers are effectively negotiating with themselves to get the fairest possible labor agreements.

When CHCA managers recognized that bureaucracy was hobbling their efforts to treat workers humanely and provide high-quality care, they established the nonprofit Paraprofessional Healthcare Institute (PHI) to raise standards of care and to lobby for better policy. Frustrated by the standards of managed-care companies that seemed not to understand its mission, CHCA created Independence Care System, which has become a $500 million managed-care provider that focuses its work on chronically sick and disabled patients. Today, this managed-care provider supports about 60 percent of CHCA’s clients.

CHCA is proving the business case for employee engagement through ownership and shared responsibility. Health care workers at CHCA make about $17 an hour including benefits. They receive twice the legally required amount of training. “Case managers” help new employees find child care and, when necessary, secure the right to work from immigration authorities. After training, workers get a “peer mentor” who helps them navigate the myriad tasks associated with providing for the complex needs of their clients in their homes. The turnover rate at CHCA is between 15 and 20 percent, which is a third of the national rate for companies doing similar work.

Michael Elsas, CEO of CHCA, earns a little less than $200,000, about 10 times what the lowest-paid worker makes. The average company in New York state pays its CEO 405 times more than the lowest-paid worker. Across the nation, CEOs make an average of 204 times more than the median worker’s pay.

Elsas’ presumptive successor is Executive Vice President Adria Powell, whose mother, Peggy, founded CHCA in 1985 with Rick Surpin and a dozen caregivers. Surpin still runs CHCA’s managed-care provider, Independence Care System. Peggy Powell is now the director of workforce and curriculum development at PHI.

Since Rick Surpin, Peggy Powell, and their 12 original caregivers started up CHCA three decades ago, they’ve created unprecedented success, continuously, in one of the toughest businesses serving one of the most stressed communities in the United States. CHCA’s mission was woven into its structure as a worker-owned cooperative. And the founders believed — quite rightly, as it turns out — that the happiest workers in the business could provide the best care in the business. As Adria Powell says, “If you create a quality job, that’s the way you will create quality care.”

This approach flies in the face of traditional businesses designed to enrich their founders by serving the most people in the easiest markets, and charging the highest possible prices while paying the lowest wages.

CHCA has not made its founders wealthy. But they make a comfortable living and are immensely, and rightly, proud of what they do. They have created astonishing success by every standard they set for the cooperative. It has served the shared interests of clients, workers and owners continuously for more than three decades.

How could any business possibly claim to be more successful?

So while we designate businesses such as CHCA as “Best for the World,” my own conviction is that they’re also simply the best businesses in the world.

— Bryan Welch

bryan-welch

Bryan Welch, CEO and Publisher of B the Change Media

Illustration by Eric Palma

This article originally appeared as Bryan Welch’s department as “Simply the Best” in the Fall 2016 issue of B Magazine.


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