Oct 4, 2023 - Health

Kaiser Permanente strike breaks long labor peace

Illustration of a caduceus wrapped around a protest sign.

Illustration: Shoshana Gordon/Axios

Kaiser Permanente's integrated care model and unique partnership with unions fueled years of labor peace — but that wasn't enough to shield the health system giant from the labor disputes rippling across the industry.

Driving the news: More than 75,000 Kaiser workers across six states and Washington, D.C., are set to begin a three-day walkout Wednesday that union officials say is the largest health care strike in U.S. history.

The big picture: A broad range of health workers and support staff are demanding higher pay and improved staffing levels — key issues that have driven health care strikes in the U.S. and across the world coming out of the COVID-19 pandemic.

  • The strike comes after years of relative harmony between the nonprofit health care giant and its unions, stemming from a landmark agreement roughly 25 years ago aimed at preventing such feuds.

What they're saying: "If it breaks down, I think it's a sign of a very fragile health care system, in general, that has come to Kaiser Permanente," said John August, a program director at Cornell University's School of Industrial and Labor Relations and former health care union organizer.

  • While workforce shortages have plagued health care for quite some time, Kaiser always seemed to stay ahead of the curve because of its commitment to having a strong relationship with labor and investments in workforce development, August said.
  • "I think that if those issues and pressures get to Kaiser, it just shows how severe it is."

Between the lines: Kaiser is the largest managed care organization in the country, coordinating coverage and care delivery for 13 million people in eight states and D.C. It's also the biggest health care provider in California and often regarded as an industry leader in the effort to provide better care at lower cost.

  • In 1997, Kaiser came to the Labor Management Partnership agreement with more than two dozen employee unions.
  • Among other things, they agreed Kaiser would maintain wages and benefits at or above industry standards for unionized employees and involve employees and their unions in decision-making on a broad range of issues.
  • The agreement worked well within the Kaiser framework and was seen as a model for how health systems could work with labor.
  • But in 2019, that began to break down with what the Los Angeles Times characterized as "bitter" contract talks. Strikes involving tens of thousands of Kaiser workers were narrowly averted in 2021.
  • Kaiser says it wants a "fair and equitable" agreement with the unions.

The big picture: Health care workers coming out of the pandemic are dealing with levels of stress and burnout probably unlike any other industry. But experts said there are some similarities between health care's labor disputes and the high-profile Hollywood and autoworker strikes.

  • "You're seeing labor coming out of a period of tremendous weakness, which happened in the post-recession of 2009-ish when a lot of concessions were made," said Robert Pearl, a Stanford University professor and former CEO of the Permanente Medical Group, which is composed of 23,000 physicians across Kaiser locations.
  • That included flat wages, poorer benefits and fewer protections against automation, he said.
  • "There is a sense this is the worker's time," Pearl said.

What to watch: Better contract terms for unions could help workers finally regain wages eaten away by heavy inflation.

  • But ultimately, it could lead to even higher costs to the health care system as employers get hit with higher prices and pass those along to workers in more expensive premiums, Pearl said
  • "Something's gonna have to give. If wages aren't going to give and drug companies aren't what's going to give, then it's going to be skimping on health care that we're about to see," Pearl said.
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