How the Kaiser Permanente strike could affect the whole health care industry
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The strike of more than 75,000 Kaiser Permanente workers may not wind up being that costly to the California-based health system — but its ultimate resolution could be a sign of things to come for the rest of the industry.
Driving the news: Kaiser health workers and support staff across the system began a three-day strike on Wednesday, with pay raises and staffing levels as major sticking points.
- The walkout, believed to be the largest health care strike in U.S. history, comes as the health care sector is grappling with workforce shortages and burnout stemming from the pandemic.
What they're saying: "They're really a bellwether, if you will, of future rate negotiations," Kevin Holloran, senior director at Fitch Ratings, told Axios. "That's the story here. Where does this end up and what does it do to the rest of the sector if they, too, have to negotiate or renegotiate contracts?"
Between the lines: Kaiser said it has proposed wage increases ranging between 12.5% to 16% over the next four years, with workers in Northern California and Washington getting the largest increases.
- The nonprofit health system also proposed a $21 minimum wage across multiple markets and a $23 minimum wage in California.
- Its union coalition says it will only accept a "unified" wage increase across all of Kaiser's regions, which include eight states and Washington, D.C.
Zoom in: The unions and Kaiser have reached tentative agreements on some points, including renewed outsourcing and subcontracting protections. But they are still negotiating over extending those protections to billing and payment staff, who are currently excluded.
- Kaiser has also tentatively agreed to increase reimbursement to remote workers for $50 a month for WiFi and $20 a month for phones, as well as a minimum 60-day notice if they are required to return to the office.
- Also still at issue, the union says, are proposed improvements to its bonus program, as well as a proposal to extend the right to organize to health systems Kaiser acquires. Earlier this year, Kaiser announced it would acquire Pennsylvania-based hospital operator Geisinger as part of a plan to bring more health systems under a new nonprofit venture.
The bottom line: "Kaiser is one of the premier health system brands in the U.S. Anything Kaiser does has a massive impact on the market," Russ Richmond, CEO of healthcare workforce management company Laudio, said in an email.
- "Impact is going to be felt throughout California. We will see other health systems receive similar demands from their unions, which will undoubtedly be on the wage front, but also on job duties."
