Setting the context for talks

Key takeaways from some of the opening-day speakers follow.

Professor Ken Jacobs, director of the University of California's Labor Research & Education Center, on US economic trends:

"We're seeing a squeeze on working families," said Jacobs. "Their buying power is down. Wage growth is weak. Employment is down. And don't expect a quick recovery." More specifically:

• Productivity has increased steadily in the US, but average wages have stagnated since the mid-1970s. On average, real wages for workers across all industries did not increase from 2005 to 2007.



• Real wages for all US health care workers increased, on average, just 1 percent over the same period.



• Job growth in the health care industry grew at twice the rate of job growth overall, and health care now accounts for about one-third of all new jobs in the US



• While union representation has fallen across US industries overall (to about 8 percent of the workforce) it has increased in health care (to about 12 percent of the workforce).



• Job-based health care coverage is falling as health insurance premiums rise; although 82 percent of union-represented workers still get health coverage through their employer, only 66 percent of nonunion employees do.



• More than 50 percent of all economic growth between 1973 and 2005 went to the wealthiest 10 percent of Americans; most of that went to the top 1 percent.

Bernard Tyson, executive vice president, Health Plan and Hospital Operations, on Kaiser Permanente's current performance:

"We have tremendous assets: 150,000 great people. A great management team. Our Labor Management Partnership," said Tyson. "If we were for-profit, we would be in the Fortune 100" group of largest companies....We also have tremendous challenges." A few examples of the mixed picture:

• We have invested heavily in our medical centers—in staffing, technology; capital improvements, and competitive wages and benefits. But we are lagging on service. We're improving, but the rest of the market is improving, too, in some cases faster than us.



• Health plan purchasers will accept some service gaps if we can provide a 15 to 20 percent price advantage, but we have lost most of that price advantage in recent years.



• We're making progress in controlling costs. Our goal is to be 1 to 2 percent below the industry average in our rate of expense growth. We've significantly reduced our annual cost increases (this does not mean cutting budgets, just limiting the rate at which we grow each year). But we need to do more.



• We're not growing membership as fast as we need to—and growth is important to long term success.



• Employee engagement, commitment and satisfaction are high. The People Pulse survey's "people index" rose to a 75 percent positive rating in 2008, up from 68 percent in 2005. (The survey also showed that employees who are most involved in LMP activities have the most favorable scores on workplace items such as engagement and empowerment.)

Professor Thomas Kochan, of MIT's Sloan School of Management, co-director of the MIT Workplace Center, on the impact of the Labor Management Partnership:

"The LMP is the largest, most innovative such partnership in US history," said Kochan, a long-time observer and co-author of a forthcoming book on the LMP. Among the partnership achievements he noted:

• Two National Agreements, a landmark employment and income security agreement to support the rollout of KP HealthConnect, and, after the bitter disputes of the 1980s and ‘90s, a decade of labor peace.



• Contribution to KP's financial turnaround over the last 10 years; significantly fewer grievances, increasing job satisfaction and performance improvement.



• KP and our unions are positioned to have a voice in two coming national debates: health care reform and labor law reform. In each case we've shown we have a model for others. Current challenges include the full implementation of unit-based teams; continuous performance improvement, including in attendance; growing health plan membership; and, across KP, "getting things done—implementation and follow through."

Jack Cochran MD, executive director, The Permanente Federation, on the state of health care in the US:

"Our success has never been more important to this country," said Dr. Cochran, noting the dire state of the US health care system:

• Per capita health care spending in the US is more than $7,000 a year—double what other developed countries spend. But we're 37th in the world in terms of outcomes, according to the World Health Organization.



• As the cost of care increases, the ranks of the uninsured and underinsured continue to grow.



• Kaiser Permanente, with its integrated model of care, innovative use of technology, and committed staff and physicians, provides an alternative model of care: "In the US, the voice not represented is the patient. But at KP we can do that, we can make the voice of the patient heard."



• We provide a delivery system prototype for the nation, and our model should be an "ethical prototype" for population care.



• When it comes to having a voice in health care reform, "performance gets you the podium.... We've got to stop loving our potential and start living our potential."



• Positive change at KP requires "complex conversations and sharing the context" of where we are today and where we need to be.