Good Business

The business section of Sunday's Philadelphia Inquirer featured an agency that provides aides to elderly and disabled in their homes, Older population, new health-care issues. An agency that is run by a friend of mine:

Sometimes the margins are so tight between what her agency gets paid to provide home health services and what she must pay the aides who do the work that Karen Kulp wakes up panicked and starts counting the dollars.

"It weighs heavily on my mind - when I'm in the shower, when I'm driving, whenever," said Kulp, president of HomeCare Associates, a worker-owned agency in Philadelphia.

In one way, it would not be hard to build profit, Kulp said. "You can make all your workers work 20 hours a week. Then you don't have to pay them any benefits. But it affects your quality. You can't give consistent care."

Aides visit several times a week, providing companionship and unskilled care, helping with bathing, toilet needs, meal preparation and tidying up.

Kulp's struggling with the margins reflects the entire industry. People need more care as they age, so demand is up. Yet workers are in short supply because of low wages and working conditions. Many agencies do not pay benefits, as HomeCare does.

But what is even more of a struggle is finding the money to pay reasonable wages - let alone benefits. The cost for private care is beyond the reach of many families.

Government reimbursements through Medicare and Medicaid have not increased in four years. They can range from $13 to $19 an hour, and vary by county, state, provider and individual circumstance, Kulp said.

For example, the government will reimburse the agency for home care of a disabled person at one rate. When that same person turns 60, the care is funded through another stream, which reimburses about $3 an hour less and brings the cost just below what HomeCare Associates pays an hour in wages and benefits.

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As it is, the agency payroll for home health aides eats up about 82 percent of every dollar from reimbursement revenues. The remaining 18 percent pays the rent, Kulp's salary, utilities and, among other items, the 5-foot-high by 15-foot-long wall of latex gloves the agency buys by the pallet and stores in its crowded offices.

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What makes HomeCare different from most other agencies is that it is a worker-owned cooperative. Employees can buy $500 shares after three months. Of the dozen directors, seven are worker/owners, who can vote to fire Kulp, if they want.

About half of the agency's 160 workers are shareholders. In 2004, they received a $900 dividend. In 2005, it was $400. Business was bad last year, so the directors voted to give all the employees a small bonus, forgoing their own dividends.

It all adds up to a lot of sleepless nights for Kulp, who joined the 14-year-old agency in 2001.

"When I wake up at night, I'm thinking over the margins," Kulp said. "Are there ways we can cut costs? Is there more business we can get? And can we do it without compromising our quality or without compromising the quality of our jobs?"

As the companion piece, Older population, new health-care issues, said of the home health workers in the "field" -- the homes of the elderly and disabled:

They are important eyes and ears of the medical profession, but they have the least status and power.

On the job, they do the toughest work: cleaning dirty bottoms, dealing with garbage, rodents, roaches, maggots, diapers, bedsores, rough relatives, rough neighborhoods.

Here we have a good business that provides needed services to a fragile segment of the population, yet they are inadequately reimbursed for their services by the government. They care about their employees as well as their clients. They are well run, so they should be a model, yet they are struggling. What's wrong with this picture? They aren't Halliburton.

Tags: News