Kaiser will ‘spend significantly’ to bolster operations, guard reputation amid huge strike
Kaiser Permanente faces two days of massive strikes in Northern California starting Thursday, and the company and experts in labor and finance told The Bee on Wednesday that the walkouts could pose a risk to both Kaiser’s reputation and its bottom line.
Insurers, government agencies and employers pay Kaiser a set fee to care for each member over a set period of time, and those payments won’t stop when a strike happens, said Paul Ginsburg, a senior fellow with the Schaeffer Center for Health Policy & Economics at the University of Southern California.
However, he said, that does not mean Kaiser can repeatedly reduce services amid a strike without consequences.
“If Kaiser doesn’t deliver the services, Kaiser faces major penalties as far as people deciding, ‘Well, I don’t want to enroll in Kaiser, and I get an open season each year to decide. Maybe Kaiser isn’t reliable anymore,’” Ginsburg said. “Instead of financial short-term impacts, the downside to them is ... people could sour on the Kaiser products.”
In a statement issued to The Bee, Kaiser said it will have to “spend significantly” to hire, train and relocate contract replacement workers – even if it never deploys them and that it must coordinate alternate services and community providers for patients it does not have the staffing to treat. In some cases, company officials said, they also will have to relocate patients, and incur other expenses related to security, technology support and more.
“Any care that must be deferred during a strike is generally either referred to another provider or made up in the days and weeks that follow a strike,” according to the Kaiser statement. “This can create overtime costs, and certainly furthers the exhaustion that our workforce has already endured over the last 20 months. Strikes cost money, strain our resources, burden our staff, and more importantly they unfairly put our patients in the middle of a union’s bargaining demands.”
Union members, however, have lambasted Kaiser leaders for putting their drive for profits over people, hurting patients and union workers.
The engineers in International Union of Operating Engineers Local 39 “play a critical role in maintaining our facilities and the equipment we use to take care of patients,” said Ethan Ruskin, a health educator at Kaiser Permanente Medical Center in San Jose. “Kaiser needs to put patients first and deliver a fair contract to the engineers.”
A handful of unions representing more than 60,000 Kaiser nurses, mental health clinicians and other health care workers will walk out in sympathy with roughly 700 stationary and biomedical engineers who have been on strike for two months. The picket lines will go up as early as 7 a.m. Thursday at Kaiser hospitals all around the Sacramento region and elsewhere throughout the north state.
Ken Jacobs, chair of the University of California, Berkeley Center for Labor Research and Education, noted that Kaiser serves 912,000 workers insured through 454 union trusts, and all those members care deeply about how Kaiser treats its unionized workforce.
“I think the bigger effect is the...reputational issue,” Jacobs said. “There’s also a very large number of union members in the public sector who are enrolled through Kaiser, and Kaiser has made a real point of reaching out to unions not just on the price and quality, which they do, but also on the (idea) that ... they’re a good employer.”
Reputation matters when it comes to growing revenue, Jacobs said, or else the company would not advertise.
Kaiser member Nicole Quiñonez said she’s gotten expert care from Kaiser nurses when she gave birth to her two sons, now ages 5 and 7, and she was anxious as she approached her Wednesday due date with no signs of labor. Her labor had to be induced for her first two births, she said. and she expected the same this time around.
The planned sympathy strike complicated that, however.
“What I was told is that normally they like to schedule inductions for 40 weeks and two days, which unfortunately puts me right on Nov. 19, which is when the nurses and midwives are striking,” Quiñonez said. “So of course, they’re not going to schedule me for something that day.”
Instead, Quiñonez said, she received an appointment for Nov. 23 when she would be 41 weeks. But in the wee hours of Wednesday morning, Quiñonez got the surprise she’d hoped for: She went into labor and gave birth to a healthy baby girl at 5:49 p.m. Wednesday and had so far avoided any impact of the planned strikes.
Quiñonez said she didn’t bear any resentment over the planned strike but was disappointed that she was among those who could be affected.
“I have nothing bad to say about the system or the doctors and nurses,” she said. “But yeah, I mean, it’s just unfortunate, I guess, that it’s happening right now or that it’s happening at all, that they couldn’t come to an agreement.”
Kaiser officials said: “Our first priority is to ensure high-quality care for all of our patients, but a strike presents confusion and disruption to members and patients who may have already deferred care as a result of the pandemic. Some members and patients may be more than inconvenienced by having to receive care at another location, rearrange work or child care schedules to make a needed appointment on a specific day, or arrange for transportation at another time.”
There’s a larger labor issue at stake for the health care giant, though, Jacobs said. The company strained relations with its unions, he said, by pushing a proposal for a two-tier wage structure when negotiating with nurses, pharmacy workers and other union-represented employees in Southern California, Oregon and Hawaii.
The union membership decried it as an attempt to divide them, and the company ultimately settled on across-the-board wage increases.
“Two-tier contracts ultimately reduce ... pay for existing employees,” Jacobs said, and Kaiser did that “in the context of the pandemic where health care workers really put their lives on the line and worked extraordinary hours and under difficult and dangerous conditions.”
Rather than rewarding employees for the incredible work that they did, Jacobs said, Kaiser instead looked at trying to cut pay and benefits. That is instilling greater unity among its labor unions, Jacobs said, and that context is also important to understanding this sympathy strike.
Ginsburg said the stationary engineers may not have as much clout with Kaiser since patients don’t see the work they do, but now there will be a large contingent of employees whose absence will be notable for patients willing to get behind them and push the employer to get the engineers’ contract settled.
Moreover, Ginsburg and Jacobs said, the COVID-19 pandemic has resulted in stiff competition for nurses who work on an as-needed basis, driving up their wages. So, it hurts the company that the 22,000-strong California Nurses Association has called upon its members to walk out Friday.
The National Union of Healthcare Workers, representing Kaiser’s mental health clinicians, said the company also has more demand than it can handle for their services. The union’s 4,000 members are set to walk out Friday as well.
On Thursday, many other services may be affected because three unions representing 40,000 workers will hit the picket line. They include optometrists, clinical laboratory scientists, X-ray technicians, housekeepers and other front-line workers in the Service Employees International Union-United Healthcare Workers West, the Office and Professional Employees International Union Local 29, and the Engineers and Scientists of California Local 20.
