Kaiser Permanente's alliance with most of its labor unions, unveiled late last month, is either: A) A ground-breaking management-labor partnership that will benefit both patients and workers; or B) A well-crafted smoke screen to quiet labor complaints about poor patient care and working conditions.
For those who are parties to the agreement, the answer is A.
"Kaiser's quality care for patients and quality jobs for employees go hand in hand," said Kathy Schmidt, president of the Oregon Federation of Nurses and Health Professionals. "We've seen it work at Saturn and seen it work at Levi Strauss."
The Service Employees International Union hailed it as "one of the largest labor management partnerships ever and the first national partnership in the healthcare industry."
SEIU President Andrew Stern said the same principles that have "allowed America to make the best cars, build some of the best steel" are now going to let people "talk about how we're going to provide the best healthcare."
The agreement comes amid a swirl of allegations by federal and state health inspectors that Kaiser facilities in California and Texas have provided substandard care (April 28, p. 12). The source of many of those allegations was complaints by union workers.
Kaiser's work force is among the most highly unionized of any healthcare provider, and its industrialist founder, Henry J. Kaiser, believed in cooperating with organized workers.
Kaiser has 7.9 million enrollees, of whom about 2 million come from unions. Of Kaiser's 90,000 employees, 65,600 (73%) belong to unions. Of those, 55,310 belong to AFL-CIO affiliates, while 10,290 are from other unions. The rank and file of the AFL-CIO affiliates must approve the pact before it goes into effect.
Today's Kaiser management, Stern thinks, "is absolutely committed" to involving its workers. "This is not a panacea, but it's a very positive process that we hope other employers in the healthcare industry will seriously consider."
Yet the California Nurses Association, which is engaged in a protracted contract dispute with the HMO in Northern California, lost no time denouncing the pact. The CNA represents 7,500 Kaiser employees.
In a statement released the same day as the AFL-CIO's news conference, the CNA pronounced Kaiser's goals "immediately suspect." The CNA said the partnership lacks any enforcement mechanism and that employees' views will be outgunned by Kaiser's expertise and authority as the employer.
As part of the deal, Kaiser and its unions will create a senior partnership committee of Kaiser senior executives and senior union leaders. The committee is supposed to establish "concrete targets, goals, objectives, time lines and other partnership initiatives." Such joint committees of labor and management are envisioned throughout the Kaiser structure.
Kaiser hopes its collaborative stance will make it the first choice of unions buying healthcare for their members. The AFL-CIO wants union trust fund fiduciaries to consider "quality, not just cost" when choosing health plans, which should give Kaiser a leg up. That should, in turn, create more job security for Kaiser's employees.
The agreement requires union employees who participate in strategic planning to keep Kaiser's proprietary information confidential.
The CNA called that a "gag" on employees who might otherwise speak out against Kaiser's policies or standards of care. This would undermine the nursing union's credibility with patients and consumers, the CNA said, "by creating a conflict of interest between the RNs' role as patient advocates and a requirement that RNs promote Kaiser Permanente."
Schmidt countered: "There is nothing that will ever take my advocating for patients away. This will give me the ability to impact decisions on behalf of patient care. We're not as involved as we need to be in advocating for quality."
David Lawrence, M.D., Kaiser Foundation Health Plan chairman, said the issue is "finding more and more effective ways of institutionalizing that patient advocacy." When you let employees participate, he said, "issues of cost and competitiveness take care of themselves."
But "institutionalization" by Kaiser is the last thing on the CNA's agenda.
"It's all hooey. Complete propaganda," said Chuck Idelson, the CNA's public relations bulldog. He emphasized the CNA doesn't wish to pick on the unions that signed the pact. Their members, after all, supported the nurses in their one-day strike against Kaiser in April.
Rather, "the problem is that most of what Kaiser is doing right now would not be affected by this agreement. That includes their decision to close hospitals and increasingly ratchet down availability of services.
"They have a strategic plan in place, which has to do with their rapid expansion, premised on signing up new members, reducing services to low-income groups and limiting services to seniors," Idelson said.
The CNA's long-running contract dispute with Kaiser touches many areas, including the wage givebacks Kaiser is demanding.
The CNA has made a point of refusing to endorse the linkage between employee compensation and a role in marketing the health plan. Other nurses unions, such as the United Nurses Association of California, already have assented to this principle. The labor contract Kaiser has proposed rewards nurses for improved patient satisfaction and membership growth, among other things. Such alignment of incentives is common in healthcare compensation.
The labor leaders in the press conference, John Sweeney, AFL-CIO president, and Peter DeCicco, head of the federation's industrial union department, tiptoed around the CNA, never referring to it by name but alluding to certain "independent unions" that were not party to the agreement. Acceptance of the deal by other unions further isolates the CNA within organized labor.
The CNA is not part of the AFL-CIO and has prickly relations with some nearby healthcare locals, especially the SEIU, not to mention its nemesis, the American Nurses Association.
The CNA won't compromise what it sees as the nurse's role as the patient's last line of defense against rapacious healthcare robber barons. Anything else would be a sellout.
Sweeney, asked whether the pact signaled an end to confrontational tactics of traditional labor, said, "I see this as a bridge-building partnership." When a reporter wondered whether labor was getting nothing more than "feel-good committees" out of the pact, DeCicco said the stress on quality of care will work to the unions' advantage, as will the consensus-building on major decisions.
Also, Kaiser has committed itself to remain neutral on union activity. It will neither advocate nor oppose union organizing drives. As an added fillip, it pledges to recognize unions through card checks, bypassing the tortuous election process of the National Labor Relations Board.
Most important, Kaiser's Lawrence stressed, is that "union individuals can look forward to a career where their minds and creativity can be tapped." True quality of care comes from involving people at the bedside level, not from better science or better systems, he said.
One thing that draws Kaiser and the labor federation together is a philosophical skepticism toward the profit motive. Part of Kaiser's marketing strategy will emphasize its not-for-profit orientation. Nobody at Kaiser has to advocate for the shareholder, Lawrence said.
"For-profit HMOs are driving patient-care standards down," Sweeney said. "A dollar diverted from patient care is a dollar diverted to profits."
The CNA doesn't buy this argument. The corporatization of healthcare afflicts not just the firms with shareholders but all healthcare organizations. Such distinctions can no longer be made, the CNA contends, when even not-for-profit Kaiser is piling up hundreds of millions of dollars every year in retained earnings.
The Kaiser health plan and hospitals had $537 million in net income in 1995 and $265 million in 1996. However, those retained earnings declined to 2% of revenues in 1996 from 4.2% in 1995.
Participants in the press conference seemed eager to equate patient-care quality with worker participation and not-for-profit orientation. "The best knowledge is resident in people taking care of patients," Lawrence said. "Not just physicians but nurses, therapists, technicians." Beyond such soft-focus sentiments, nobody defined what kind of quality they were talking about.
Kathy Sackman, president of the UNAC, said she viewed the pact as an important opportunity but added: "I think it's going to be a harder job than everybody's looking at. We've had four very difficult years. You can't do anything like this unless you can build up some trust and a relationship. It'll take a while."
The CNA is in a very difficult situation, she said. "It takes a long time to turn around in midstream. I hope they will eventually be willing to join with us."
Nurses and other healthcare workers have long desired a more active role in setting standards of patient care, Sackman said. They've been frustrated watching Kaiser squander its proud tradition trying to follow the competition. "If there's a forum and way to do it on a meaningful basis, without everything coming from the top down, we absolutely have to try it," she said.