Kaiser, Union Coalition Enter 5-Year Collaborative Contract

Kaiser Permanente and a coalition of unions have agreed to an unprecedented five-year national contract that will raise pay, guarantee job security to 62,000 workers and strengthen their role in staffing decisions that affect patient care.

The contract, to be announced today at a press briefing by AFL-CIO President John Sweeney and Kaiser Foundation Chairman David Lawrence, involves 25 union locals representing nurses, clerks, housekeepers and cafeteria workers.

“With this agreement, Kaiser Permanente is creating industry standards for collaboration among all its employees on behalf of enhanced patient care,” Sweeney said in a statement prepared for the briefing. “It represents a challenge and a prod, and it will inevitably improve the practices of all health-care organizations.”

Oakland-based Kaiser Permanente is the largest health maintenance organization in California, and the second-largest in the nation.

Three years ago, it entered a partnership with the AFL-CIO under which the labor federation agreed to help market the health plan and Kaiser Permanente ensured that new facilities would be unionized. This contract, which has been ratified by nearly all the unions involved, is an outgrowth of that partnership.

All workers covered will receive at least 4% annual raises. Wages for registered nurses will increase by 6% a year. In addition, union members will be eligible for bonuses if certain goals--including improved patient satisfaction and reduced medical errors--are met. The contract also guarantees no layoffs unless an entire Kaiser Permanente facility closes.

Coming after years of bottom-line thinking in the health care industry, the emphasis on quality of care and service is significant and could inspire changes in the way HMOs are run if adopted by other employers.

However, meeting financial targets also qualifies workers for bonuses, and officials of a rival nurses’ union said they found that part of the contract troubling. “You can’t put health care professionals in the position of being mercenaries,” said Roseanne De Moro, director of the California Nurses Assn., which represents Kaiser registered nurses in Northern California.

“It goes to the heart of why CNA did not join and will never join the partnership,” De Moro said. “They can’t be on the side of the market and the public at the same time. It’s an inherent conflict of interest.”

But David Bullock, president of Local 399 of the Service Employees International Union in Los Angeles, who helped write the contract, said safeguards against such a conflict are built into the contract.

The contract also creates committees with equal numbers of union members and managers that will determine staffing levels and other matters that affect patient care. And it formalizes training to help teams of health care providers, from phone screeners to doctors, work together more smoothly.

“Medical care today is so complex, it requires teams of people. If those people aren’t able to work together in constructive, collaborative ways, the quality of care suffers,” said Lawrence, the Kaiser chairman. “What makes this contract so exciting is that now we’re all in the same boat rowing together.”

That Kaiser and its unions would come to such a comprehensive agreement is not surprising. The nonprofit HMO was set up to serve union members at Henry J. Kaiser’s steel foundries and shipping yards. For decades, most unions--as well as Democratic Party political appointees--have offered Kaiser Permanente to employees or been members themselves.

But the agreement is as much a product of the difficult and rancorous years that managed care has experienced since the early 1990s as it is of Kaiser’s history. During that period, large employers pushed insurance premiums down--in California even more than in the rest of the nation. At the same time, the health plans began to cut back on the fees paid to doctors and hospitals for caring for patients.

Huge cuts in the work force at hospitals--particularly among nurses--and tremendous labor strife followed.

Oliver Goldsmith, medical director for the Southern California Permanente Medical Group, said that under the new contract, nurses and other employees would be able to work with management to set appropriate staffing levels. And the contract, which settles a host of labor issues for five years, buys Kaiser a long stretch of peace.

“We’ve got enough problems in health care,” Goldsmith said. “Working effectively with our work force just takes one problem off the table, frankly.”