Immigrants build wealth while caring for elderly
Inc. magazine listed her home-health-care company, Chesterfield Health Services, 13th among the nation's 100 fastest-growing inner-city businesses this year. The 1.2-million circulation magazine also dubbed Ogiale "one of America's 25 most fascinating entrepreneurs," alongside Steve Jobs of Apple Computer and Jeff Bezos of Amazon.
Her fortune in the making — from $20,000 to $13 million in annual revenue in the past eight years — comes from helping hundreds of older and disabled people on Medicaid live independently and avoid nursing homes. Half of her workers — the ones who do the cooking, cleaning and caring for these clients — are immigrants like herself.
Ogiale — the sole owner of her company — is one of several foreign-born entrepreneurs capitalizing on the elder boom and transforming the state's publicly funded home-care industry into a money-making enterprise, especially in King County.
"The passion is strong for people who have less," said Ogiale, 46, who lives on Mercer Island, sends three of her four young children to private schools and pays herself a six-figure salary. "So I love Medicaid clients. It doesn't mean I don't believe in wealth. I believe in wealth as well."
She calls herself a "social capitalist."
Nonprofit Catholic Community Services, the largest home-care provider in the state, has slipped from first to fourth place in King County in terms of hours billed to Medicaid — the federal-state health-care program for the poor.
The top Medicaid home-care provider in King County now is Armstrong Uniserve, a decadeold for-profit company founded in Tacoma and run by Leah Armstrong, a Korean-born American with a graduate degree and experience as a social-service-agency director and Boeing accountant. She expects $17 million in revenue this year.
Ogiale is No. 2. The third spot goes to Elite International Home Care, a for-profit firm founded by two immigrants, one from Russia and the other from Ukraine.
Sea Mar Community Health Services, once the second-largest provider in King County, fears its nonprofit home-care program that targets Spanish-speaking elders may not survive the growing competition, said program manager Nicole Mims.
Mims believes a handful of for-profit companies seem to be getting preferential treatment from Aging and Disability Services case managers who refer clients to home-care businesses countywide.
"The whole referral system as it works right now seems to be pretty dysfunctional because equal distribution of client referrals is not the goal," Mims said.
Case managers, however, say the for-profit providers are often hungrier and more willing to take the tough cases.
"They bend over backward. They really work with us," said Dick Sugiyama, who supervises the case managers who make home-care referrals for Aging and Disability Services in King County. "The competition is very positive."
Aging and Disability Services is part of the city of Seattle's Human Services Department. It's also one of 13 Area Agencies on Aging in the state, established by the federal Older Americans Act, that help monitor publicly funded home care.
Peter Nazzal, director of Catholic Community Services' long-term care program, attributes the for-profits' growth to "extraordinarily good marketing" with potential clients, who have the right to pick a home-care provider from an approved list.
The nonprofit agencies traditionally have been more passive and waited for referrals, assuming it was the government's job to educate Medicaid clients about home-care options. The Catholic agency does advertise its private-pay home-care business.
Entrepreneurs jump in
A dozen years ago, home care was the worst kind of business to start. Payments were low. Workers were hard to find and keep. Only three nonprofit agencies in King County — Catholic Community Services, Fremont Public Association and Sea Mar — were willing to shoulder the job, frequently at a financial loss.
But the "age boom" was about to explode.
The number of people 85 and older in Washington state soared nearly 50 percent in the 1990s, from about 56,300 to 84,000, the U.S. Census Bureau says. By 2030, the population of people over 65 years old is expected to double nationwide to 71.5 million people.
States began scrambling for alternatives to costly nursing homes, a huge drain on state Medicaid budgets. In 1995, Washington started diverting money to less expensive in-home and community-care settings, such as adult family homes and assisted-living centers.
Since then, the number of Medicaid recipients in nursing homes has dropped 25 percent to about 12,300 residents, while those being cared for in their homes has grown nearly 48 percent to more than 25,000.
Meanwhile, the state and federal governments' annual spending on in-home care in Washington since 1995 has soared nearly 180 percent, from $96 million to $267 million. Government spending on nursing homes in the state grew less than 7 percent, from $482 million to $514 million. Entrepreneurs took notice.
Immigrants were especially attracted to the opportunity. It required minimal financial investment or experience, and they had a natural connection to a pool of workers — other immigrants — who are a vital source of labor for all long-term care.
Perhaps more important, the work itself often fit with their personal values that caring for elders is an honorable thing to do.
"When I was young, my grandma, she was sick. My mom started to take care of her. Since then, I have an interest in helping older people," said Kunle Suleiman, a Nigerian who came to the United States in 1985 and first worked in nursing homes as an aide.
After earning a pharmacy-technician certificate from North Seattle Community College, he started Corinthians Health Care Services in 1997. Today, his home-health agency employs 70 people.
More than 25,000 people in Washington now receive publicly paid home care. Most of the caregivers are self-employed and often related to the client. The rest work for home-care companies and nonprofit agencies.
A home-care worker must pass a criminal-background check and go through 22 hours of training on the fundamentals of caregiving.
It may look simple, but the home-care business is fraught with challenges. Owners must satisfy government regulators, protect vulnerable clients, manage a work force prone to high turnover and counsel families worried about sick or disabled loved ones.
Then there's the matter of turning a profit. The government pays agencies $14.93 an hour for home care. In turn, agencies pay their workers between $8.50 and $10 an hour. The difference between the Medicaid payment and an employee's hourly wage, minus administrative costs and other overhead, is the profit.
The home-care system starts with state social workers who assess Medicaid clients who need care at home. The state workers then put out a request to a home-care company or nonprofit agency to serve those patients. Clients also can ask for a certain agency.
After the initial assessment and referral, a client's case is turned over for ongoing management to an Area Agency on Aging, such as Aging and Disability Services in King County. Those case managers also can send a client to a different agency depending on the client's changing condition or personal choice.
For the past year, Joseph Kariuki, a Chesterfield employee, has cooked, cleaned, shopped and provided personal care for Tony Raffenaud, a 58-year-old former warehouse worker paralyzed with multiple sclerosis.
Kariuki lives in Raffenaud's apartment in North Seattle most of the week, seeing his wife and five children on Saturday nights and Sundays. His wife is a home-care worker for another agency.
"For you to be able to do this job, you must have a strong heart and love for other people," said Kariuki, 54, who was an accountant in Kenya but has been a home-care aide since immigrating to Seattle in 2001.
Every morning, he helps Raffenaud take a shower, brush his teeth, wash his face. Then he cooks breakfast. Later, he manipulates Raffenaud's body through a range of exercises.
"It's give and take," Raffenaud said. "You gotta keep an open heart. You gotta realize we all have those needs that have to be filled."
Good care, extreme efficiency
In 1979, Ogiale moved from Nigeria to the United States at age 21 to get a college education, never intending to stay. But marriage and five children — including a son who is autistic — changed her plans.
In 1996, she found herself on the loading docks of United Parcel Service in Seattle, working nights in order to be with her children during the day.
"I knew there was more for my life. I knew I had more to give to society," said Ogiale, who grew up one of 11 children of an upper-middle-class businessman.
Armed with a master's degree in public administration, she borrowed $500 from her sister to obtain home-care and home-health business licenses, which allowed her to provide nursing services.
She named her company Chesterfield Health Services after Chester, her autistic son. Her first clients came in 1997. She soon learned the keys to making a profit were good care, extreme efficiency and a large volume of clients.
"If I make $1 or $2 for every hour of a worker's time, I knew I'd be able to do it," said Ogiale, who described herself as "possessed" her first two years in business.
She recently opened a pharmacy and started selling medical equipment, such as wheelchairs and canes. The idea is to deliver comprehensive home-health care so clients can one-stop shop if they'd like.
She now has 1,000 workers serving clients out of 11 offices in 19 counties.
Despite her success — or perhaps, some say, because of it — Chesterfield ran into trouble meeting certain state requirements in Thurston County last year.
Among the problems: A program manager failed to document that a worker was accused of stealing money from a client and that another client fell. A worker without a driver's license or car insurance drove a client, who was not authorized to get transportation, to the hospital. Criminal background checks on some workers weren't completed.
Ogiale corrected the deficiencies, but officials from the Area Agency on Aging that represents Thurston, Mason and Lewis counties weren't satisfied with her company's performance. They and Ogiale agreed that she'd stop accepting publicly funded business in those counties, said Dennis Mahar, director of that Area Agency on Aging.
About 5 percent of Chesterfield's business statewide is private, including a few clients in Thurston, Mason and Lewis counties.
"I didn't feel the office was staffed well or that they responded as soon as they needed to," Mahar said. "My impression was they had grown rather fast and weren't able to handle the load down here."
In contrast, Chesterfield's reputation in King County is excellent.
Off and running
Chesterfield receives about 40 job applications a week.
That's one reason Ogiale's modest headquarters remain on East Yesler Way where there's a bus stop right out front.
"Workers tell workers," Ogiale said. "They come every day. They bring their friends. They bring their relatives. It happens that way."
She wears a T-shirt and jeans topped by a designer jacket. A few buttons are missing on a sleeve. Her hair is a little wild.
But her verve and determination are intact. With characteristic intensity, she's off and running on the secret to her success, leaving listeners straining to keep up.
"Truly, it has to be business thinking. It has to be efficiency thinking. First of all, be true to your purpose of why you opened the door. And never deflect from it. My No. 1 objective is patients' care. ... Then how do we do it efficiently? Each day, we try to make operations better and better."
Marsha King: 206-464-2232 or mking@seattletimes.com
