Amid labor talks, union unveils billboards highlighting Cedars-Sinai profits, CEO pay

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Healthcare workers at Los Angeles-based Cedars-Sinai Medical Center revealed a series of billboards that highlights profits and CEO pay at the hospital.  

The workers, who are represented by Service Employees International Union-United Healthcare Workers West, announced the billboards April 2 amid contract negotiations. The billboards are scheduled to appear throughout April at seven locations that are all within 1.5 miles of the hospital.

A union news release says the billboards aim to draw attention to “excessive profits and CEO compensation,” as well as the amount of charity care the nonprofit hospital provides.

“The public deserves to know that this elite hospital with huge profits and obscene CEO compensation, isn’t acting in the public’s best interests,” Dave Regan, president of SEIU-UHW, said in the release. “On top of paying no income or property taxes, Cedars-Sinai skimps when it comes time to care for the poorest people in our community.”

The hospital  addressed the union’s claims.

“The Cedars-Sinai Board of Directors believes in providing every one of our employees with compensation that is based upon merit of their individual performance, a rigorous review of each position’s responsibilities, and comparisons with other organizations for positions with similar responsibilities. For the president and CEO, the review process is even more extensive,” the statement said.

“[CEO]Tom Priselac’s compensation appropriately reflects his more than two-decade tenure of successfully presiding over the western United States’ largest nonprofit hospital. Under his leadership, Cedars-Sinai has earned national recognition for delivering the highest quality care to patients and has been ranked among the top medical centers in the country.

“Over the last 10 years alone, Cedars-Sinai has invested nearly $6 billion to benefit the local community by, among other things, providing free or part-pay care for patients who cannot afford treatment; by losses caring for Medicare and Medi-Cal patients; and by providing a wide range of free health programs and clinics in neighborhoods as well as education, health and fitness services in dozens of local schools.”

SEIU-UHW represents more than 1,800 service and technical workers at the hospital. The last contract with Cedars-Sinai expired March 31.




Labor board will charge Kaiser for refusing to bargain, union says

Dive Brief:

  • The National Labor Relations Board (NLRB) is preparing to prosecute health system Kaiser Permanente for refusing bargain with SEIU United Healthcare Workers West, according to the union. SEIU-UHW, part of the Coalition of Kaiser Permanente Unions, filed a complaint with the NLRB in the spring charging Kaiser for refusing to negotiate a new contract that covers 85,000 employees across eight states and D.C. Hearings for case will likely begin in the spring.
  • In their complaint, SEIU-UHW and the Coalition of Kaiser Permanente Unions claimed Kaiser tried to set conditions on bargaining that would ban unions from engaging in political action that could affect the healthcare organization. Kaiser issued a statement last week arguing the delay was due to a split that occurred within the coalition earlier this year, and said it is “confident the NLRB will agree that Kaiser Permanente has acted lawfully and in good faith” in dealings with SEIU-UHW.
  • That may not be the case. SEIU-UHW is planning on proposing a new arrangement. If Kaiser doesn’t agree to enter into that settlement proposed by the union, the NLRB is expected to issue charges by the end of the month — if not sooner, according to an email obtained by Healthcare Dive.

Dive Insight:

Kaiser has been wracked with labor woes this year. The health system reached an agreement with the Alliance of Health Care Unions — the 21 unions that broke off from the Coalition of Kaiser Permanente Unions — earlier this year. That split occurred the day before bargaining was scheduled to begin, and negotiations with the coalition did not move forward.

That contract, according to SEIU-UHW, included a condition prohibiting those unions from taking any kind of political action against Kaiser, including ballot initiatives, legislation or public policy campaigns. That’s the same condition that led SEIU-UHW to file its complaint earlier this year.

“The Coalition of Kaiser Permanente Unions strongly opposes such a proposal,” SEIU-UHW said in a statement, “and believes this condition violates their free speech rights.”

Healthcare Dive reached out to the NLRB for confirmation on its reported decision to prosecute Kaiser, but did not receive a response in time for publishing.

“The decision confirms what has been clear to workers for months now: Kaiser isn’t the labor friendly employer it claims to be, nor is it as committed to patient care as it claims to be,” Lanette Griffin, a laboratory assistant at Kaiser Permanente, said in a statement. “If Kaiser was committed to improving patient care, you would expect it to want to negotiate a contract to retain and attract the outstanding caregivers who have driven the corporation’s success. But Kaiser is showing its true colors when it avoids bargaining and wants to silence our voices.”

Last week, 4,000 mental health workers represented by National United Healthcare Workers engaged in a five-day strike against Kaiser, causing the system to postpone some surgeries. Kaiser has attributed the cancellations to California Nurses Association nurses joined the picket line in an authorized sympathy strike.

“The determination by the district 32 office of the National Labor Relations Board is not a verdict. It is the beginning of the NLRB’s process to hold evidentiary hearings to fully understand this complicated case,” Kaiser said in its statement.



Battle heats up between Stanford Health Care, union over hospital charge initiative

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Stanford (Calif.) Health Care and an employees union are disputing over a November ballot initiative to place a 15 percent cap on hospital charges in Palo Alto, Calif., The Stanford Daily reported.

Seven things to know:

1. The ballot initiative, initially filed in May, would place a 15 percent cap on the amount Palo Alto-based hospitals can charge in excess of direct patient care costs. Hospitals, medical clinics and other providers in Palo Alto would have to refund payers for charges exceeding the 15 percent cap within 180 days of each fiscal year.

2. The Service Employees International Union-United Healthcare Workers West sponsored the measure. It represents healthcare workers at Stanford Health Care — which has a main campus in Palo Alto.

3. Stanford University announced its opposition to the measure in a Sept. 28 statement.

The measure “would threaten Stanford Health Care’s ability to provide top-quality healthcare to patients from Palo Alto and across the region,” officials said.

“Such a policy is estimated to reduce Stanford Health Care’s budget by 25 percent, requiring significant cutbacks and the possible closure of many services and programs that are essential to high-quality healthcare in the local area.”

4. Union spokesperson Sean Wherley argued the measure will provide accountability for local healthcare providers and the city, according to the report.

“This is about transparency [and] letting people understand how much [they] are being charged, and why [they] are being charged so much more than the clinic down the street or in the neighboring community,” he told The Stanford Daily. “This is our chance as an organization to get healthcare costs under control.”

5. The union has also taken issue with Stanford Health Care’s profits, but the system said these are necessary resources to maintain its specialists, facilities and community benefit program, and that the system invests all its profit margin.

6. Palo Alto City Council members voted this summer to oppose the measure. According to the report, they attributed the decision to not having adequate bureaucratic infrastructure to regulate healthcare charges from local providers.

7. As of Oct. 3, the political action committee of the union and the opposition committee — Protect Our Local Hospitals and Health Care — had spent a combined $1.8 million on the measure.


California health system’s bankruptcy challenged by employee union

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El Segundo, Calif.-based Verity Health System, the nonprofit operator of six hospitals, filed for bankruptcy protection Aug. 31. The bankruptcy proceedings are being challenged by SEIU-UHW, a union representing 2,000 workers at Verity Health hospitals.

The hospitals were originally owned by Los Altos, Calif.-based Daughters of Charity Health System. The financially troubled system began seeking a buyer for the hospitals in 2014, and Integrity Healthcare, a company created by BlueMountain Capital Managementtook over the facilities in 2015 and renamed them Verity Health System. Billionaire Patrick Soon-Shiong, MD, bought Integrity in July 2017, according to the Los Angeles Times.

Dave Regan, president of SEIU-UHW, expressed concern about Verity entering bankruptcy.

“When Verity bought these hospitals from Daughters of Charity four years ago, they made promises to these communities that they would not lose access to the care they needed,” he said in a press release. “Now it looks like Verity’s billionaire owner wants to go back on those commitments.”

In the bankruptcy filing, Verity seeks court permission to sell the hospitals from any liens and encumbrances. SEIU-UHW contends this shows Verity’s “intent to nullify their obligations both to their union collective bargaining agreements and the conditions of sale imposed by former Attorney General Kamala Harris when Verity purchased the hospitals.”

By challenging the bankruptcy filing, SEIU-UHW intends to ensure the hospitals are kept open and continue to meet pension obligations and maintain current services and levels of employment.



Fate of Bay Area hospitals in doubt as hedge fund deal to save them sours

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Santa Clara County interested in buying O’Connor and St. Louise

Santa Clara County is hoping to buy a pair of struggling hospitals that have long served as a safety net for the poor, less than three years after they were sold to a New York hedge fund in a state-approved deal to ensure they remained open.

County Executive Jeff Smith said the county sees a renewed opportunity to acquire O’Connor Hospital in San Jose and St. Louise Regional Hospital in Gilroy as public hospitals to extend its reach and help relieve overcrowding at the county-run Santa Clara Valley Medical Center in San Jose.

“We’re watching carefully,” Smith said. “We’ve told them that we’re interested and asked them to let us know what their process is going to be.”

The county’s interest comes after Verity Health System, the Redwood City-based secular nonprofit that now runs the hospitals, announced the “potential sale of some or all” of the hospitals among options “to alleviate financial and operational pressures.”

It was less than three years ago that the Catholic Daughters of Charity, which provided medical care for California’s poor since the Gold Rush, announced the largest nonprofit hospital transaction in state history with the $260 million sale of six hospitals to a hedge fund.

The deal, blessed by a state attorney general under conditions that included facility improvements and no cuts to charity care, jobs or pay, was welcomed with guarded optimism: As hospitals struggle nationwide, a half dozen in the Bay Area and Los Angeles would stay open.

But already, the deal has soured. Verity saw operating losses of $55.8 million in the nine months that ended March 31.

The hospitals in San Jose, Gilroy, Daly City, Half Moon Bay and Los Angeles provide 1,650 inpatient beds, emergency rooms, a trauma center and a host of medical specialties, and employ 7,000.

But insurers are pushing to cut hospital stays to keep a lid on costs and premiums, shrinking hospital business. At the same time, demand for housing and commercial space has soared with California’s surging economy, raising the possibility that some of the hospitals could be turned into homes or offices.

Who would buy the hospitals, and what other alternatives are under consideration, is unclear. No hospital chains have announced interest.

“I don’t know of a system in California that would pick them up,” said Wanda J. Jones, a veteran health system planner and writer in San Francisco who has followed the deal.

San Mateo County officials could not say what might happen to Seton Medical Center in Daly City and Seton Coastside in Moss Beach, near Half Moon Bay.

“The potential closure of the hospitals and the impact on the residents they serve is very important to the county,” said Michelle Durand, spokeswoman for the San Mateo County county manager’s office. “However, we currently have made no decisions and also cannot speculate as to the potential interest of private hospital operators.”

But Santa Clara County officials have been vocal about their interest.

Daughters of Charity Health System had declined to sell the two hospitals to Santa Clara County because it wanted to sell all the hospitals as a package. After for-profit Prime Healthcare Services walked away from a potential $843 million deal to buy the six hospitals in 2015, calling then-Attorney General Kamala Harris’ conditions too burdensome, Daughters sold them to hedge fund BlueMountain Capital Management under similar terms.

A year ago, a Culver City company owned by billionaire doctor and entrepreneur Patrick Soon-Shiong, who also owns the Los Angeles Times and San Diego Union-Tribune, bought the hedge fund’s Integrity Healthcare division that owns Verity.

Smith said that in the current landscape for hospitals, O’Connor and St. Louise would always be money-losers for a private owner, but could pencil out as public hospitals. That’s because public hospitals get reimbursed by Medi-Cal, the state’s coverage for the poor, at higher rates than private hospitals, which rely on a mix of insured patients to cover charity care costs. O’Connor and St. Louise, he said, are in areas where they won’t attract enough insured patients.

For the county, acquiring O’Connor and St. Louise would make sense, Smith said. The county’s Santa Clara Valley Medical Center in San Jose is “filled to the brim with patients, and we have great need for services,” said René G. Santiago, deputy county executive and director of the Santa Clara Valley Health and Hospital System.

Some of the money to buy the hospitals could come from funds set aside for VMC renovation, Smith said.

But the six hospitals share debt and employee retirement obligations, which is what made Daughters of Charity unwilling to sell them piecemeal, Smith said.

There’s also the possibility that potential buyers may see greater use for some of the hospital properties for housing or offices. Smith said that while that wouldn’t satisfy the attorney general’s approval conditions, a seller could argue those terms were unworkable and seek a new deal.

Jones said the attorney general’s conditions made it impossible for the hospitals to survive in today’s environment, calling terms like no job cuts “insane.”

“Kamala Harris was so overboard in her requirement for what she wanted to happen,” Jones said. “You don’t put a condition like that on a buyer.”

The office of the attorney general, now under Democrat Xavier Becerra, had no comment.

Sean Wherley, a spokesman for SEIU-United Healthcare Workers West, which represents the hospitals workers, said when the possible sale was announced earlier this month that they were “disappointed.”

He said the union expects “Verity and any new buyer to be held accountable to keep hospitals open, maintain vital services, fund pension obligations, protect jobs and honor our collective bargaining agreements.”


Prime Healthcare Services unlawfully stopped nurses’ anniversary raises, court rules

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A federal appeals court ruled that Ontario, Calif.-based Prime Healthcare Services violated the National Labor Relations Act when it canceled anniversary raises for unionized nurses, according to a Reuters report.

Here are six things to know about the issue.

1. The U.S. Court of Appeals for the D.C. Circuit made the ruling May 18, affirming a previous ruling by the National Labor Relations Board.

2. The NLRB found Prime “violated both the unilateral change doctrine and the duty to provide relevant information during negotiations with its employees’ bargaining representatives, Service Employees International Union Local 121RN and SEIU United Healthcare Workers-West,” according to the May 18 ruling. The NLRB specifically found Prime canceled anniversary step increases for nurses after the expiration of its labor deals with the two SEIU bargaining units, and determined the private for-profit hospital operator failed to provide information about employee healthcare programs as requested by the units. The NLRB ordered Prime to resume the raises, take care of any owed back pay due to the discontinuation of the raises and provide the requested information.

3. Both sides reached a settlement regarding complaints related to UHW’ unfair labor practice charges in the matter, and the unfair labor practice charges filed by 121RN remained at issue, according to the ruling. Prime’s agreements with 121RN, as well as UHW, were effective from Jan. 1, 2007, through March 31, 2011. The 121RN bargaining unit represents registered nurses at Prime’s Encino (Calif.) Hospital Medical Center, while UHW represents service and technical employees at Encino and Prime’s Garden Grove (Calif.) Hospital Medical Center.

4. Prime argued, among other things, that the anniversary step increases were terminated when the labor deal with 121RN expired in 2011 because they were tied to annual pay increases in the expired contract, according to the ruling.

5. The appeals court found “no merit in these challenges, however. Accordingly, we deny the petition for review and grant the [NLRB] board’s cross-application for enforcement of its order.”

6. In response to the ruling, Jamie Konn, outside counsel for Prime, told Becker’s Hospital Review: “This is an old matter that is now behind us. Encino and 121RN entered into a collective bargaining agreement in November 2014. The parties will continue to work together, and this matter should be resolved soon.”


SEIU health workers set to protest potential Kaiser layoffs

Dive Brief:

  • “Thousands of healthcare workers” organized by SEIU-UHW are set to protest from May 1-18 at 33 California hospitals owned by Kaiser Permanente, the union said Friday.  At issue are a variety of announced plans to lay off pharmacy warehouse workers and relocate call center jobs.
  • Kaiser Permanente wrote to Healthcare Dive in an email that the decision to outsource the pharmacy storage and distribution network came after extensive discussions with SEIU-UHW and other unions. The company pointed to the “many regulatory, technological and efficiency challenges we face now and in the future,” as factors that influenced its decision.
  • But Service Employees International Union-United Healthcare Workers West argues that the decision is unbecoming of a nonprofit organization that had its profits rise 22% in 2017 with $28 billion in reserves on hand.

Dive Insight:

The protests appear to be the continuation of similar actions earlier this year when SEIU organized protests at 32 hospitals in February and March.

The company recently issued an official notice to lay off 61 pharmacy warehouse workers in Downey, California. According to SEIU-UHW, the company plans to lay off 175 more pharmacy warehouse employees in Oakland, Livermore and Los Angeles and relocate 700 call center jobs to cheaper areas of the state.

The union noted that 55,000 Kaiser Permanente employees in California are members of SEIU-UHW. The national agreement with Kaiser for a broader group of unions expires Sept. 30.

John Nelson, vice president of communications at Kaiser Permanente, called the claims by SEIU-UHW misleading.

“Kaiser Permanente is growing, and we are adding jobs overall. As one of the largest private employers in California with more than 149,000 employees and 16,000 physicians in the state, since 2015, we have added more than 13,000 jobs in California and continue to add jobs with more than 12,000 open staff positions and hundreds of physician positions,” Nelson said in a statement.

It appears that politics may be coming into play. Several elected officials have sent letters including California Democrat Reps. Tony Cardenas, Grace Napolitano, Adam Schiff, Lucille Roybal-Allard and Brad Sherman urging Kaiser Permanente to reconsider its plans.

“It is imperative that Kaiser Permanente continue to flourish by providing quality healthcare to patients while also being a good partner when it comes to job creation which benefits our community,” former California Senate President Pro Tempore Kevin De León wrote in a letter.


California Unions Secure 12% Raises from Kaiser Permanente, Dignity Health

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Under the terms of separate, five-year contracts, about 34,000 workers in the state expect their wages to rise at least 12%, with lump sum payments added thereafter.

Two labor unions in California announced Monday that they have reached separate contract deals with major providers in the state.

Oakland-based Kaiser Permanente, which operates 21 medical centers and other facilities in central and northern California, agreed to a 12% across-the-board wage increasefor the 19,000 registered nurses and nurse practitioners it employs, according to the California Nurses Association (CNA).

San Francisco-based Dignity Health, which operates throughout California, agreed to a 13% wage increase over five years for the 15,000 union members it employs as healthcare workers, according to SEIU-United Healthcare Workers (UHW) West.

The five-year deal with Kaiser Permanente is pending ratification by CNA members, while SEIU-UHW members already ratified their five-year deal with Dignity Health.

“Our new contract maintains employer-paid family healthcare and provides rising wages, and that security and peace of mind enables us to focus on caring for our patients,” Dennis Anderson, a laboratory assistant who works for Dignity at Mercy Hospital in Folsom, California, said in a statement.

The deal details: Kaiser Permanente

The tentative agreement with Kaiser Permanente will ultimately benefit patients, according to CNA Executive Director Bonnie Castillo.

“Protecting the economic security of our future RNs is essential to defending the health of everyone who will be a patient today and tomorrow,” Castillo said in a statement. “This agreement gives us a strong foundation for health security for Kaiser nurses and patients for the next five years in a turbulent time of health care in our state and nation.”

Key provisions of the contract, according to CNA, include the following:

  • Additional staffing: Kaiser will add 150 RN full-time-equivalents to assist in its migration to a new computer system, with 106 of those positions to be posted within 90 days of the contract’s ratification.
  • One wage scale: Kaiser agreed to withdraw a proposed four-tier wage scale for RN/NP new hires—a proposal the union said would otherwise “promote workplace divisions between current nurses and new RN graduates.”
  • Wage increases: The agreement calls for 12% wage increases for all RNs and NPs, with a 3% lump sum over five years.

The agreement also calls for 600 formerly non-union RN patient care coordinators to be included in the contract with the other RNs and NPs employed by Kaiser.

A spokesperson for Kaiser Permanente could not be immediately reached Tuesday for comment.

The deal details: Dignity Health

The ratified agreement between SEIU-UHW and Dignity Health—which lasts through April 30, 2023—includes the following key provisions, according to the union:

  • Benefits: Union members employed by Dignity will keep their fully paid, employer-provided family healthcare.
  • Wage increases: Workers secured 13% raises over five years, with a 1% bonus in the second year.
  • Funding for training: Dignity also agreed to contribute another $500,000 annually to a joint labor-management training program designed to keep workers on top of the latest changes in healthcare, the union said.

This deal comes as Dignity Health prepares to merge with Catholic Health Initiatives, based in Chicago, which would form one of the largest nonprofits in the country.

A spokesperson for Dignity Health could not be immediately reached Tuesday for comment.