Kaiser strike called off as company, unions reach tentative agreement

https://www.healthcaredive.com/news/kaiser-strike-called-off-as-company-unions-reach-tentative-agreement/563523/

UPDATE: Sept. 25, 2019: Following two days of discussion, Kaiser Permanente has come to an agreement with the Coalition of Kaiser Permanente Unions, which has called off the strike. Under the terms of the four-year tentative agreement, some 85,000 unionized Kaiser employees will receive guaranteed annual wage increases through 2023, additional education, training and advancement opportunities, a defined benefit pension plan, higher travel reimbursement and incentives for using Kaiser’s mail-order prescription service.

The coalition of unions and Kaiser reached a consensus Tuesday following roughly five months of bargaining. The agreement still needs to be ratified by coalition union members. Voting is expected to be completed by the end of October and, if approved, the contract will have an effective date of Oct. 1.

Arlene Peasnall, Kaiser’s interim chief human resources officer, said the company and its workforce “may disagree at times, but we have always been able to work through our challenges to align on common goals,” she said.

Dive Brief:

  • An overwhelming majority of Kaiser Permanente workers voted to authorize a strike in October over the not-for-profit integrated health system’s labor practices. It will be one of the largest strikes in the last two decades if the system and the union coalition fail to come to an understanding.
  • The final unions voted over the weekend, bringing the total of U.S. Kaiser employees in support of the strike to almost 51,000 (97% of all Kaiser coalition union members). Three percent, or 1,348 workers, voted ‘no’ on the strike.
  • The Coalition of Kaiser Permanente Unions are meeting with Kaiser leadership Monday and Tuesday for a two-day bargaining session. If no agreement is reached, the strike is scheduled to begin Oct. 14 and run for seven days.

Dive Insight:

The final votes on a Kaiser Permanente strike trickled in over the weekend. The last three unions located in Washington, D.C. and Southern California finished voting on Friday, though a Coalition representative declined to break down votes by individual union.

Union leaders counted 50,884 ‘yes’ votes in support of the strike and 1,348 ‘no’ votes, accounting for 97% and 3% of workers represented by unions under the coalition, respectively.

Kaiser, which has previously blamed worker support for the strike on “misleading” ballot questions, said it would continue to work with the union coalition toward a mutually beneficial outcome. For example, the not-for-profit giant’s most recent contract proposal for its Colorado workers offers guaranteed wage increases and no changes to pension benefits.

“We are offering a proposal that’s fair, equitable, and aligned with our other union agreements,” Arlene Peasnall, Senior Vice President for Human Resources at Kaiser told Healthcare Dive. “We hope the Coalition will not call a strike on October 14. However, we are preparing to deal with all scenarios.”

Support for the strike has continued to mount over the past few months, with labor interests across the country skewering the Oakland, California-based nonprofit provider for soaring profits and what they see as unfair labor practices.

Along with sitting on more than $37 billion in reserves, Kaiser took in more than $5.2 billion in income in the first half of the year alone, heightening scrutiny of the system.

California Governor Gavin Newsom, a Democrat, signed a bill into law earlier this month mandating Kaiser be more transparent within its financial disclosures, including breaking down expenses and revenue on a per-facility basis, revenue by type of payer and rate increases by type of medical service provided starting in 2020.

It’s been almost a full year since the Kaiser workforce’s national contract expired. Kaiser was charged by the National Labor Relations Board for failing to bargain in good faith in December, and union employees have been working without a national contract ever since.

However, it appears matters have come to a head, with the strike garnering support from California community leaders, religious figures and influential politicians, including House Speaker Nancy Pelosi, presidential hopeful Senator Kamala Harris, D-Calif., Sens. Ron Wyden, D-Ore. and Jeff Merkley, D-Ore., and Rep. Maxine Waters, D-Calif.

 

 

 

Healthcare jobs grow at rapid clip, but wages lag amid consolidation boom

https://www.healthcaredive.com/trendline/labor/28/#story-4

Image result for Healthcare jobs grow at rapid clip, but wages lag amid consolidation boom

Healthcare employment is growing at a record pace, but wages remain stagnant, which some experts say likely results in part from the trend of consolidating health systems.

The latest Bureau of Labor Statistics numbers show the industry gained 49,000 jobs in March and 398,000 over the past 12 months. Analysts at Jefferies say the month-to-month growth is the second largest increase on record for the sector. Healthcare job growth has surpassed non-healthcare job growth and nudging the share of total jobs to an all time high, according to consulting firm Altarum.

Hospital employment grew by 14,000 jobs in March, adding up to a total of 120,000 for the combined first quarter of 2019. BLS tallied ambulatory jobs at 27,000 and home health and skilled nursing jobs at 9,000.

At the same time, real average weekly earnings for production and non-supervisory employees across sectors grew 0.1% over the month according to BLS. That growth in earnings is due to an increase in average weekly hours.

For nurses and pharmacists working in hospitals in heavily concentrated markets, annual wage growth has been lagging behind national rates by as much as 1.7 times. That’s according to researchers Elana Prager and Matt Schmitt, of Kellogg and UCLA, respectively, whose working paper compares wage growth rates in markets where mergers have occurred.

The paper drew the ire of the American Hospital Association.

“Among the many serious concerns about the study are its lack of rigor in the definitions and assumptions it used, and absence of data on total compensation and the recognition of other obvious factors that could affect wage growth,” an AHA spokesperson said in a statement criticizing media coverage of the research.

Academics researching the impacts of consolidation have asked the Federal Trade Commission to look at the impact horizontal mergers have on labor and consumers before they become difficult to challenge. FTC green-lit hundreds of horizontal hospital mergers over the past decade, maxing out at 115 in 2017, according to the National Institute for Health Care Management. In 2009, there were 50 such deals.

A Penn Law paper on mergers and labor markets published last year found employer consolidation has had a direct impact on wages and productivity in concentrated labor markets in the past. Wages, the authors write, tend to dilute when competition is scarce and labor concentration is “very high, as high or higher overall than product market concentration.”

Jason Plagman, a healthcare analyst at Jefferies, agreed, telling Healthcare Dive it becomes an “oligopsony situation where there are only a handful of buyers of a product” — in this case, labor — “you tend to see [employers] exert more control.”

As AHA noted, hospital and health systems tend to offer non-wage benefits, “such as employer-sponsored insurance, time off and education benefits” rather than increase wages. That’s an important caveat, said Dennis Shea, a health policy professor at Penn State.

 

Labor push

The debate comes as nurses unions have been pushing hard for additional staff and higher wages for hospital workers in consolidated states like California, New York, Massachusetts and Pennsylvania. Hospital consolidation has raised prices as much as 20% to 40% when they occur in the same market, according to National Institute for Health Care Management, with some prices reaching as much as 55%.

Unions argue hospitals can afford to pay extra to hire more nurses. Jefferies analyst Plagman said it’s not that easy. About 50% of hospital revenue goes to salary, wages and benefits, he said, and half of that chunk of revenue goes to nurses. “If they give a 3% raise to all nurses, that’s a big impact on their overall expense line,” Plagman said.

The lack of competition bars labor from seeking work elsewhere. A nurse in a concentrated labor market can’t quit their job to work for the hospital down the street, because it’s probably owned by the same health system, Shea said.

Shea and Plagman agreed that movement of labor away from concentrated markets is one way to break the wage slump. But lack of mobility was one of the consequences of concentration found in a National Bureau of Economic Research published in February 2018. The paper suggests a negative relationship between consolidated markets and wages that becomes more pronounced with higher levels of concentration and only increases over time.

Pay raises have historically been pushed by labor unions, and though some hospitals have already raised wages, few have been inclined to raise staffing levels as well.

“Strikes are picking up,” Shea said. “That’s always an indicator that wage and salary growth will pick up a little bit.”

While labor disruption has been on the rise over the past year, Plagman ​said he expects employment and wage growth to continue at the current pace. At some point, he said the market will have to resolve itself.

“What we’re seeing is hospitals and healthcare providers are hiring, but they’ve been very disciplined over the past few years giving raises to nurses and therapists,” Plagman said.

In testimony to the FTC in October, economist Alan Kreuger alleged employers in concentrated markets “collude to hold wages to a fixed, below-market rate,” even when the economy is booming. Union membership has plummeted 25% since 1980, and without a counterweight to balance the power of a monopsony, he argued, employers are free to set wages at will — even if they lag behind inflation rates.

Pressures to contain costs and move from volume to value is forcing health system executives to be extra delicate with their labor expenses. When nurses strike, hospitals have temps at the ready. That’s a boon for staffing agencies like AMN Healthcare Services and Cross Country Healthcare.

Cost control in healthcare is a bit like “pushing on a balloon,” Shea said.

Slow growth or declines in one sector means business is booming for another. In this case, ambulatory added 27,000 jobs month-to-month in March, up from 22,000 in February, and Jefferies analysts are looking favorably at temporary staffing agencies.

While “all indicators” say healthcare wages should be pushed up, Shea said, he wouldn’t be surprised if the growth rate continued to limp along for a little while longer.

 

 

 

 

 

Hospitals hit bump, but healthcare jobs showed steady growth in July

https://www.healthcaredive.com/trendline/labor/28/#story-1

Image result for hospital job growth

Dive Brief:

  • A total of 30,000 healthcare jobs were added to the U.S. labor rolls in July, representing 18% of all new jobs added during the month, according to the Department of Labor.
  • Virtually all of the healthcare job growth occurred in ambulatory care — that segment accounted for 29,000 new jobs alone.
  • The weak spot was in hospital job growth, which was down by 2,000 jobs from the month before.

Dive Insight:

Hospitals are often the biggest employers in many towns and medium-sized cities, but their job creation has been uneven at best in recent months. According to an analyst note from Jefferies, employment by hospitals dropped by 2,000 on a seasonally adjusted basis, although that grew to a net 1,000 new jobs on an unadjusted basis.

By comparison, hospitals added a seasonally adjusted 9,000 new jobs in June, 25,000 on an unadjusted basis. However, much of that boost was created by the minting of new residents who just graduated from medical schools.

Hospital employment is still growing at a 1.8% annual clip (compared to 1.4% as of July 2018), although that’s down from the 2.1% rate reported in April.

“Overall, healthcare employment growth continues to demonstrate strong momentum, but hospital jobs growth appears to be moderating,” the analysts said. Inpatient providers account for more than 5.2 million jobs nationwide.

However, Jefferies’ analysts believe that healthcare will continue to be a big job engine for the foreseeable future.

“We believe the supply of clinical labor continues to struggle to keep pace with solid demand growth, resulting in tight clinician labor markets and strong demand for healthcare temp staffing services,” they said.

Although healthcare job growth has been extremely robust, wages have been stagnant in recent years, a phenomenon attributed in part to continued consolidation among industry players.

The ambulatory care segment has been growing rapidly in recent years. Its addition of 29,000 new jobs was up from 17,000 in June, and significantly outpaced the year-to-date average monthly growth of 22,000.

Home healthcare services added 11,000 new jobs last month alone — the highest rate since 2017. The segment’s annual growth rate is currently 5.3%, up from 3.2% in July 2018.

The nursing home segment added another 1,000 jobs.

 

 

Kaiser workers block traffic in Labor Day protest

https://www.beckershospitalreview.com/human-capital-and-risk/kaiser-workers-block-traffic-in-labor-day-protest.html

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About 50 employees blocked traffic in front of Kaiser Permanente’s downtown Sacramento, Calif., office on Sept. 2 as part of a planned Labor Day protest in five cities, reports The Sacramento Bee.

The workers held strikes in Los Angeles, Sacramento, Denver, Portland, Ore., and Oakland, Calif. Police said 54 people were cited and released after the protest in Sacramento, according to CBS Sacramento.

“We support the rights of workers to publicly demonstrate and celebrate Labor Day,” Sandy Sharon, RN, senior vice president and area manager of Kaiser’s Sacramento office, told The Sacramento Bee. “Unfortunately, there were acts of civil disobedience that taxed our city and police resources.”

The Kaiser employees are protesting the system’s “unfair labor practices and shift from prioritizing patients and the community to profits and enriching top executives,” the Coalition of Kaiser Permanente Unions said in a press release cited by The Sacramento Bee.

The coalition’s bargaining team and Kaiser have been negotiating a new contract for workers, as the current contract is set to expire this month.

The protests come as workers continue voting on whether to call a nationwide strike in early October. If a nationwide strike is called, it would be the country’s largest since 1997, according to the coalition. The strike would affect more than 80,000 workers in California, Oregon, Washington, Colorado, Maryland, Virginia and the District of Columbia.

John Nelson, vice president of communications at Kaiser, previously accused the unions of using the strike threat as a bargaining tactic, “designed to divide employees and mischaracterize Kaiser Permanente’s position, even though most of the [union] contracts don’t expire until October.”