‘Millions of Americans are Safer Today,’ Union Leader Declares After Kaiser Permanente Strike

“This historic agreement will set a higher standard for the healthcare industry nationwide.” - Caroline Lucas, executive director, Coalition of Kaiser Permanente Unions.

By Bob Hennelly

Tens of thousands of union healthcare workers who work for Kaiser Permanente in several states have won a 21 percent pay increase over four years following a three-day strike earlier this month, the largest such action in U.S. history.  The tentative deal includes restrictions on outsourcing and measures to promote staff retention, a key concern of the coalition of unions led by SEIU.

“Millions of Americans are safer today because tens of thousands of dedicated healthcare workers fought for and won the critical resources they need and that patients need,” Caroline Lucas, executive director of the Coalition of Kaiser Permanente Unions, said in a statement. “This historic agreement will set a higher standard for the healthcare industry nationwide.”

The Oct. 4 to Oct. 7 strike by the Coalition of Kaiser Permanente Unions was organized by eight unions including members of SEIU and OPIEU in California, Colorado, Maryland, Oregon, Virginia, Washington, and Washington D.C. Staffing, and higher wages were key demands.

"It was a bumpy ride," Steve Shields, Kaiser’s senior vice president of labor relations, told reporters, describing the marathon negotiations. "We are committed to the mission and committed to caring for people in our communities. It is a challenging environment in the U.S. in general for healthcare. We don't have enough healthcare workers…we have an interest in helping build the health care workforce of the future.”

The new tentative deal is the first negotiated since the pandemic with the previous contract inked back in 2019. The Kaiser Permanente union contract had expired at the end of September. Union members start their ratification process later this week. 

Dave Regan, president of the SEIU-United Healthcare Workers West, which represents most of the workers covered by the tentative deal said it set an important precedent because it applied in several states where Kaiser Permanente has facilities.

“We’ve never achieved a contract settlement that had equivalent, annual pay increases for people no matter what part of the country they’re in,” Regan told the Chief Healthcare Executive. “Given the pandemic, given the state of the economy and the inflation, this was something that was enormously important to us, and we’re really proud to report that we achieved unified, consistent pay raises.”

Kaiser Permanente, a California based non-profit, generated over $95 billion in 2022, compared to  $93.1 billion the year before. It generated $2.1 billion profit for the quarter. It operates 39 hospitals, hundreds of medical offices as well as a health plan that has 13 million participants.  

In 2021, the chain’s CEO was paid close to $16 million and dozens of other top managers made more than $1 million annually according to the Kaiser Permanente’s tax filings. 

Kevin Holloran, a healthcare analyst for Fitch Ratings, told Investopedia the labor agreement was “vital” to Kaiser Permanente’s “financial stability” because it was  “far less exposure to further strikes.” 

Since the pandemic, nominally non-profit hospital chains Kaiser Permanente have been subject to greater scrutiny.

A report released last week  by Sen. Bernie Sanders (I-Vt.), Chairman of the Senate Health, Education, Labor, and Pensions (HELP) Committee, documents “that many nonprofit hospital systems across the country are failing to provide low-income Americans with the affordable medical care required by their nonprofit status – despite receiving billions in tax benefits and providing exorbitant compensation packages to their senior executives,” according to press release announcing the study.

“In 2020, nonprofit hospitals received $28 billion in tax breaks for the purpose of providing affordable health care for low-income Americans,” said Sanders. “And yet, despite these massive tax breaks, most nonprofit hospitals are actually reducing the amount of charity care they provide to low-income families even as CEO pay is soaring. That is absolutely unacceptable.”

Sanders continued, “At a time when 85 million Americans are uninsured or underinsured, over 500,000 people go bankrupt because of medically related debt, and over 60,000 Americans die each year because they cannot afford to go to a doctor when they need to, nonprofit hospitals should be providing more charity care to those who desperately need it, not less. And if they refuse to do so, they should lose their tax-exempt status.”

The announcement of the watershed Kaiser Permanente deal coincided with California Gov. Gavin Newsome signing legislation that established a $25 minimum wage for most of the state’s healthcare workforce.

The legislation includes cutouts for rural hospitals and smaller facilities like urgent care clinics and skilled nursing facilities where pay goes to $21 an hour next year, getting up to $25 an hour by 2028.

"For all the dedicated healthcare workers who are struggling to pay bills and support themselves and their families, higher pay will make a huge difference in their lives," the SEIU-United Healthcare Worker West said in a statement. "Raising wages means that workers who were considering leaving can stay and new workers will be attracted by the higher base pay."

The break though contract and legislation in California comes as the nation’s healthcare system continues to report across the board staffing challenges. Earlier this year the National Council of State Boards of Nursing reported that 100,000 registered nurses had exited the workforce over the last two years, with another 610,388 planning to leave by 2027. Stress, burnout, and retirement were the reasons most often cited.

“Today California is putting a stop to the hemorrhaging of our care workforce by ensuring healthcare workers can do the work they love and pay their bills — a huge win for workers and patients seeking care,” Tia Orr, executive director of SEIU California, said in a statement.

The only government data on occupational COVID deaths was kept by the Centers for Medicare and Medicaid Services for nursing homes. Since June 2020, 3,009 nursing home workers have died from COVID with the country averaging 18 nursing home worker COVID deaths per week, according to a AFL-CIO research report.

According to the Guardian newspaper and Kaiser Health News, 3,600 nurses died in the first wave of COVID.

“Both sides credited the involvement of acting U.S. Labor Secretary Julie Su, who was there in person when the final version was hammered out at 3 A.M. in San Francisco,” NPR reported.

"This agreement demonstrates what is possible when workers have a voice and a seat at the table," Su told reporters at the joint union/management press conference. "Collective bargaining works. It may not always look pretty. But unions have, throughout our nation's history, built the middle class."

President Joe Biden said the nation owes a “tremendous debt to health care workers and the hard-working men and women who make their work possible. I’m grateful to Kaiser Permanente and the Coalition of Kaiser Permanente Unions for coming together in good faith to ensure these workers can continue caring for our neighbors and loved ones.”

Biden’s statement concluded with, “Health care workers and support staff kept our hospitals – and our nation – going during the dark months of the pandemic. They had our backs during one of our nation’s toughest times. We must continue to have theirs.”