See the noisy, wet strike by UC Davis Health workers as private-sector partnership questions raised.
By partnering with a private-sector company to build a new rehabilitation hospital, UC Davis Health is subverting labor contracts with its employees and partnering with a company that has a record of suppressing the wages of health care workers, two unions allege in complaints to a California labor board.
Roughly 39,000 employees of Local 3299 of the American Federation of State, County and Municipal Employees and Local 9119 of the University Professional and Technical Employees will stage a one-day walkout on Thursday at the University of California’s 10 campuses and five medical centers.
It’s their fifth strike in the last 13 months. This time, union leaders and rank-and-file members, have repeatedly emphasized their concerns about outsourcing.
“The University of California has bypassed its workers at every turn, refusing to meet and confer about plans to outsource middle-class jobs in California to poverty wage contractors,” said Kathryn Lybarger, president of AFSCME Local 3299, which represents some of UC’s lowest-paid staff. “By cutting workers out of decisions about who will be providing the services that UC patients and students rely on, it’s clear that UC is focused on one thing – paying its lowest wage workers even less.”
Brad Simmons, the chief executive officer at UC Davis Medical Center, said the health system is forming a joint venture with Kindred Healthcare to ensure that the Sacramento region’s patients will have access to state-of-the-art rehabilitation care. The UCD health system will have to put the current space housing its rehabilitation unit out of commission by 2030, Simmons said, because it will not meet state seismic requirements.
“We reviewed their (Kindred’s) quality, all the quality infrastructure they have, and at the end of the day, we felt they could help us,” Simmons said. “We’re going to be able to provide double the amount of patient care than we currently are able to provide. We are at capacity every day in this area, and now we are going to be able to double that with Kindred. We felt that it was just a great alignment and a great partnership to provide better patient care and greater capacity than what we currently do.”
Health care industry analyst Jack Curran said specialty hospitals like this one represent a growing sector in the U.S. health care system as an aging population requires more medical care for strokes and other conditions. The joint venture has benefits for both organizations, he and other experts said.
“Working with an established and reputable enterprise like UC Davis will allow Kindred to enter the Sacramento area with a stronger reputation and access to resources,” Curran said. “The rehabilitation hospital will have better access to interns, residents and medical students, than an independent operation would have, because of the resources of UC Davis. Additionally, by partnering with UC Davis, the rehabilitation hospital will immediately have access to referrals from an established hospital.”
Russ Bailey, the chief operating officer at Kindred Hospital Rehabilitation Services, said the company has 22 joint-venture hospitals that rank higher than the national average on quality metrics such as their effectiveness at getting patients home and the rates at which their facilities have to transfer patients to acute-care hospitals.
He said the UCD-Kindred rehab hospital, which will be in UCD’s new Aggie Square development on the corner of Stockton Bouelvard and Broadway in Sacramento, will create roughly 200 new jobs that will pay middle-class wages. It will serve stroke and brain trauma patients, among others.
“This will be a brand-new, state-of-the-art hospital unlike anything currently existing in this area,” he said. “Kindred currently has 13 long-term acute care hospitals in the California market and our highly trained...professionals (in California) earn an average of $75,000.”
Bailey said that average salary includes wages paid to full- and part-time Kindred employees as well as per diem, or as-needed, workers who worked only in hospital settings like the venture Kindred will run with UC Davis Health.
AFSCME leaders noted that the company’s 2017 annual report showed that the median annual compensation for Kindred’s 83,788 U.S. workers was $22,100, far below the $56,624 the the California Budget & Policy Center calculates that a single-parent family needs to cover basic expenses without assistance from public programs.
The $22,100 compensation figure, however, included wages for per diem workers, in addition to full- and part-time Kindred employees, who then worked in home-care, hospice, rehabilitation and hospital settings. When Kindred’s 38,400 per diem workers were excluded, the company stated, the median annual compensation for full- and part-time workers rose to $47,594 in 2017.
That figure also was below the state budget center’s calculation for what a single-parent family needs to avoid public assistance and below the $60,239 median household income that the U.S. Census reported for Sacramento County residents in 2017.
Kindred did not file a public annual report in 2018 because it was taken private by two private-equity firms that year. As part of that transaction, the business known as Kindred Healthcare kept control of the company’s long-term acute care hospitals, in-patient rehabilitation facilities and contract rehabilitation services, but a separate company named Kindred at Home got rights to the home health, hospice, and community care businesses.
While per diem employees represented 46 percent of the workforce at Kindred in 2017, AFSCME said, the union’s collective bargaining agreement restricts UC entities to a much lower ratio. At UC Davis Medical Center, for instance, the number of per diem employees cannot exceed 8 percent of career full-time equivalents in AFSCME’s patient-care unit.
While the UC cannot outsource jobs to a foreign country, UPTE and AFSCME officials said in their complaints, it is effectively using the Kindred joint venture to circumvent collective bargaining agreements. It is not, however, cutting off its contracted relationship with UC physicians, they said.
“UC Davis is not going out of the business of providing rehabilitation services,” AFSCME leaders stated in the complaint. “It is simply arranging, through a series of contractual agreements to have another entity – one of its own creation – provide those ongoing services. Nothing about a joint venture or affiliation requires UC to sever its employment relationship with those who provide Rehab Services to UC patients.”
The Zuckerberg San Francisco General Hospital, for example, is independently owned and does not bear the UC name, but AFSCME-and UPTE-represented UC employees work there and get paid the same wage scale as their peers at other facilities. The same is true for the MLK hospital in Los Angeles.
There is ample time, union officials say, for UC Davis to rework this arrangement, but management has refused to supply information or has declined to negotiate over work there.
UC officials have said they see AFSCME’s contracting claims as a red herring. The real reason for continual strike activity, they said, is to gain leverage in negotiations over wages.
In a statement sent to The Bee this week, leaders of UC Davis Health said their organizations has added plenty of union-represented jobs and it will continue to do so. In the last five years, they said, UCD Health has added nearly 1,400 jobs, more than 1,100 of them represented by unions. That includes 400 new AFSCME-represented positions and more than 500 new UPTE-represented positions, they added.
“We’re not done yet,” they stated. “ UC Davis Health is looking to hire more people: We are currently recruiting for more than 700 positions and many of those are union represented.”
Simmons said he has tried in a number of ways– letters to employees’ homes, employee forums and letters to the editor in newspapers to communicate that there will be no layoffs as part of the Kindred joint venture and that no employee will be forced to interview for a position with Kindred.
As for wages, Simmons said: “Kindred is going to have to provide competitive wages for this market, and they know this,...and they are prepared for that.”
Bailey said the $60 million rehabilitation hospital could be completed in late 2020 or early 2021.
The 15,000 members of UPTE, a unit of Communications Workers of America, hold a range of research, technical and health care occupations. AFSCME 3299 represents 24,000 patient care and service workers.
The workers’ concerns over outsourcing have caught the attention of presidential candidates: U.S. Sen. Bernie Sanders, D-Vt.., visited the UPTE picket line March 20 in Los Angeles and San Antonio Mayor Julian Castro will walk the picket line with UPTE workers Thursday at University of California, San Francisco.
In Sacramento, Thursday’s strike could affect traffic on Stockton Boulevard between T Street and Broadway as the unionized workers march around the UCD Medical Center campus.
Editor’s note: This story was updated May 16 to correct the home state for Sen. Bernie Sanders. It is Vermont.