Once known for strong employee-management relations, its workers now say staffing and pay need to rise to attract and retain the staff Kaiser needs.

By Mark Kreidler, Capital & Main

This story is produced by the award-winning journalism nonprofit Capital & Main and co-published here with permission.

Update: Kaiser Permanente health care workers began what they said would be a three-day strike on Wednesday, Oct. 4. Kaiser Permante said in a statement “we are disappointed that some unions have called on employees to participate in a labor strike,” and that its hospitals and emergency departments would remain open.

The sheer scope of the threatened Kaiser Permanente strike — more than 75,000 health care workers, including support staff and others, across multiple states — has riveted national attention on negotiations rooted in workers’ concerns about what it calls Kaiser’s understaffing.

But the heat and light notwithstanding, this isn’t a new phenomenon. Kaiser employees for years have accused the company of cutting corners to drive net income and warned that patient and worker safety was at risk. It all feels far removed from Kaiser’s long reputation as a business with a successful employee-management partnership.

“What we’ve seen from Kaiser Permanente in recent years is an abandonment of its commitment to good relations with its workers and safe staffing for its patients,” said Sal Rosselli, president of the National Union of Healthcare Workers.

The NUHW is not a part of this week’s proposed national job action, which is being coordinated by the Coalition of Kaiser Permanente Unions and includes 11 labor groups. Negotiations continued Tuesday, and workers were scheduled to strike Wednesday if no agreement is reached. The most prominent group in the coalition is SEIU-UHW in California, which represents more than 57,000 Kaiser workers. (Disclosure: NUHW is a financial supporter of Capital & Main.)

But Rosselli speaks from experience. Last year, more than 2,000 NUHW Kaiser therapists struck in Northern California to protest what they said were dangerous patient-staffing ratios and delays in care at multiple facilities, only to see Kaiser dig in for more than two months before settling on a new contract — this despite the company’s documented history of inadequate levels of mental health services and state fines for overbooking its therapists.

They were hardly the first to note a changing climate at Kaiser, whose health plan enrolls nearly 13 million members in eight states plus the District of Columbia. The early stages of the COVID-19 pandemic were marked by Kaiser nurses protestinginadequate provisions of personal protective equipment, and the company narrowly averted a strike last year by more than 21,000 members of California Nurses Association/National Nurses United, who held out for the creation of 2,000 new jobs in Northern California alone.

When the omicron wave of the coronavirus arrived in 2021, Kaiser employees said their understaffed hospitals were no better equipped to handle the surge in patients than they had been the year before. The pandemic pushed hospitals and health systems into staffing crises they’d seldom seen, but the context of most of the nurses’ comments was that they’d been asking for increased staffing for years.

“We are very short staffed versus what our levels were even two years ago” before the pandemic, said Jill Leon, a registered nurse at Kaiser Permanente Walnut Creek Medical Center, at the time. “And we’re short staffed everywhere, not just with nurses. We are in constant critical need.”

Kaiser for years stood relatively tall in the health care industry for both its staffing levels and its relationship with employees, anchored in a system in which both sides collaborated on hospital and clinic decisions on staffing, equipment and other things. But union critics said that model began to deteriorate as the company’s revenue ambition grew.

Kaiser Permanente, the nation’s largest nonprofit HMO, reported $2.1 billion in net income in the second quarter of this year alone, keeping it well on track to easily make up for a reported net loss in 2022 — the only year since 2007 that the company reported losing money. Kaiser recorded an all-time record of $8.1 billion net income in 2021.

While it may sound odd for a nonprofit to record net income, the reality is that Kaiser is broken into several components, and its Kaiser Permanente Medical Groups functions as a for-profit entity. One of the issues, union critics contended, is that under the KPMG model, physicians after some years of employment essentially become shareholders in those groups and qualify for bonus money — which is closely tied to the bottom line. One way to control costs and maintain that line in the black is to keep staffing levels as low as possible.

Without question, the pandemic exacerbated staffing crises across all health care settings, not just at Kaiser. The commercial intelligence site Definitive Healthcare reported that more than 333,000 health care workers left their jobs in 2021 alone, and longer-term projections are for massive shortages of nurses and physicians nationwide.

In the current Kaiser negotiation, the union coalition has been pushing for the sorts of wage increases that it argued will keep current workers on the job and encourage prospective employees to join Kaiser: a nearly $25 an hour increase over the next four years. The company said this summer that it added 6,500 jobs toward a goal of filling 10,000 new positions by the end of the year, but the two sides remained far apart Tuesday on the topic of wages.

It is part of a recurring theme, said workers and union leaders. Kaiser has kept staffing levels low and pushed back on pay increases. The result, the workers said, is inferior care for patients and a growing exodus of employees out of Kaiser, one that may dampen the effect of new hires.

“For a long time, Kaiser executives were serious about making the HMO the best place to work and receive care, but those days appear to be over,” Rosselli said. The company’s response to this latest labor crisis will help determine whether that’s true.

Disclosure: SEIU and the California Nurses Association/National Nurses United are financial supporters of Capital & Main. 

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