What is the Kaiser Permanente Labor Management Partnership?

On December 7 and 8, 52,000 nurses and other health care workers at Kaiser Permanente will be voting on the tentative agreement for a new four-year contract backed by the Alliance of Health Care Unions (AHCU). The 10-union coalition, which includes the United Nurses Associations of California/Union of Health Care Professionals (UNAC/UHCP), announced the deal November 13, less than 48 hours before 32,000 KP workers were set to strike in California, Oregon, Washington and Hawaii.

While the unions predictably praised the deal, it ignores all the major demands of workers for safe staffing levels, significant wage increases to protect them from the surge of inflation and an end to existing wage, pension and health care differentials across geographic regions.

Kaiser Permanente healthcare workers rally earlier this month. (Source: Twitter/MorePerfectUnion)

Aside from Kaiser, the main beneficiaries are the executives who head the Alliance of Health Care Unions. According to an AHCU statement, the deal will “strengthen the Labor Management Partnership,” a corporatist body established in 1997, which includes Kaiser management and representatives from the AHCU unions and the rival Coalition of Kaiser Permanente Unions. The coalition, led by the Service Employees International Union-United Healthcare Workers West (SEIU-UHW), signed a similarly miserable four-year contract in 2019, blocking a strike by 80,000 KP workers.

Part of the partnership’s expanded powers will be the setting up of a “national Affordability and Competitiveness Task Force” to boost profits at the expense of workers and patients. The tentative agreement also ties performance-based bonuses to “joint initiatives for cost-cutting in 2023.”

As part of this joint cost-cutting effort, in the third year of the contract, nurses will be offered a $2,000 bonus if they do not use more than one of their 10 allotted sick days in a year. Thus, staffing shortages will addressed not by compelling KP to hire even a single new nurse but by using economic pressure to force the existing staff to work even if they are sick or exhausted.

As a reward for this collaboration, Kaiser will funnel an additional $15 million to the Ben Hudnall Memorial Trust, an “educational and training” fund that provides union officials with ample opportunities for paid positions and perks. The LMP will also receive, at a minimum, $8 million per year in corporate funding for each year of the contract.

The newly formed Kaiser Workers Rank-and-File Committee is calling for a “no” vote and the mobilization of all Kaiser workers to demand adequate staffing levels enforced by nurses and health care workers themselves, annual 10 percent wage increases, together with cost-of-living increases, the elimination of all wage and benefit tiers and the enforcement of contractually mandated breaks.

The roots of Kaiser’s Labor Management Partnership

To understand the battle Kaiser workers face against both the company and the unions, it is necessary to review briefly the evolution of this incestuous relationship.

From its very inception, Kaiser Permanente, founded in 1945 by steel, aluminum and shipbuilding magnate Henry J. Kaiser and physician Sidney Garfield to provide medical coverage to Kaiser’s industrial workers, KP has had the closest ties to the unions. The United Steelworkers, International Longshore and Warehouse Union (ILWU) and other unions at Kaiser agreed to get other employers to add his medical plans to their labor contracts, while any gains made by KP workers were added to the cost of the plans.

Kaiser’s system of setting prices for standardized medical treatments and delivering services for pre-paid premiums became the model for all Health Maintenance Organizations (HMO) and allowed Kaiser to become the largest “non-profit” health care provider in the US. This coincided with militant struggles by American workers in the decades following World War II to win substantial improvements in their living standards, including greater access to medical care, which led to a significant increase in life expectancy.

But by the 1980s and 1990s the situation had drastically changed. US corporations, facing powerful competition from international rivals, destroyed millions of industrial jobs and clawed back the hard-fought gains of the working class. The universal demand coming out of every corporate boardroom was to cut “excessive” medical costs. In the name of making the corporations “more competitive,” the United Steelworkers, the United Auto Workers and other unions betrayed one strike after another and accepted sweeping wage and benefit concessions, including inferior medical plans that reduced coverage and shifted costs onto workers.

This change was no less profoundly felt at Kaiser. Throughout the 1980s there was a series of bitter strikes by UNAC nurses (1980), a seven-week walkout by SEIU Local 250 members in the Bay Area (1986), and a 58-day strike by Oregon nurses (1988). Despite the determination of the workers, the unions accepted two-tier wage systems, pay freezes and other concessions.

However, even with these and other givebacks, Kaiser faced stiff competition from lower-cost “for profit” competitors, including Foundation, Health Net, Blue Cross/WellPoint and PacifiCare, and by the late 1990s it was losing hundreds of millions of dollars each year. When it began closing facilities, slashing jobs and demanding ever greater workloads, the situation reached a boiling point with a series of strikes in 1997, limited to one and two days by the California Nurses Association (CNA), against wage cuts of as much as 15 percent, staffing cuts and reductions in their own health care benefits.

Faced with the danger of an uncontrollable revolt by workers, the unions proposed the formation of the Kaiser Permanente Labor Management Partnership in 1997 to prevent strikes that “threatened to derail the organization,” according to the LMP website.