1933-1945: ‘There is no such thing as labor relations’

The health care program now known as Kaiser Permanente began in the Mojave Desert when Dr. Sidney Garfield, fresh out of medical school, opened a clinic for 5,000 Colorado River Aqueduct workers in 1933. Dr. Garfield soon found his practice foundering because insurance companies were sending the most serious—and most profitable—cases to Los Angeles hospitals. He developed a prepaid plan with a focus on safety and illness prevention, and it worked. The hallmarks of what would become the Kaiser Permanente Health Plan—prepayment, prevention and group practice—were forged here, but it would be 12 years before members of the public could join.

In 1938, Henry J. Kaiser and his son Edgar persuaded Dr. Garfield to create a similar medical program for workers building the Grand Coulee Dam in Washington.

The resulting industrial health plan was so popular, the unions insisted dam workers’ families be included. That feature carried over when Dr. Garfield built the largest civilian medical care program on the World War II home front, covering almost 200,000 Kaiser workers in California, Oregon and Washington.

With the traditional labor pool—young, healthy white males—serving in the military, thousands of African Americans and other people of color migrated to the shipyards, securing good union jobs after the long hurt of the Great Depression. Women came out in force, too. The Permanente Foundation Health Plan, both the on-the-job care and the broad coverage of the 50-cent-a-week supplemental plan, was extremely successful.

For the first time in their lives, ordinary people could count on affordable medical care.
 

1946-1989: ‘If not for organized labor’

On July 21, 1945, with the war in Europe over and the shipyards beginning to close, the Permanente Foundation Health Plan opened to the general public. A year later, on Aug. 1, 1946, Dr. Garfield signed the Permanente Foundation’s first union contract, with the CIO-affiliated Nurses’ Guild. The contract, in a first for Alameda County hospitals, established a 40-hour workweek, down from 48 hours.

Key support for the Permanente health plan came from unions. Harry Bridges, president of the International Longshoremen and Warehousemen’s Union, was an early advocate. He defended the plan against attacks by professional medical associations, whose members called prepaid group practice unethical, and brought all 6,000 ILWU members on the West Coast into the plan. Almost 15,000 members of the Retail Clerks Union in Los Angeles, a large and prominent union led by Joe DeSilva, joined in 1951.

But by the mid-1960s, financial pressures began creating divisions. In 1966, registered nurses in Northern California, represented by the California Nurses Association, became the first nurses in the state to conduct a work action. Major strikes erupted in 1968 in both Northern and Southern California. The strife simmered, and in 1986, a seven-week strike by SEIU Local 250 had some 9,000 clerks, certified nursing assistants and technicians walking the picket line at 14 Kaiser Permanente facilities in California. The action didn’t prevent a two-tier wage restructuring plan, but there was one positive outcome: The first Joint Conference on Service Issues, a precursor to the Labor Management Partnership agreement.
 

When I think about the Labor Management Partnership and Kaiser Permanente’s history, I can’t help but believe the creation of the LMP was inevitable—and that it’s been the linchpin to KP’s success after the financial challenges of the 1970s, ’80s and ’90s.

From the very beginning, Kaiser Permanente’s management and its unions shared a philosophy of engagement. This culture never went away entirely, but when the competition from for-profit HMOs mounted in the 1980s, it got pushed to the background. Kaiser Permanente did what many businesses do—it reduced its workforce and made other cost-cutting changes. Union members became frustrated, believing the changes undermined KP’s mission and eroded working conditions.

The unions responded with traditional work actions and strikes.

But I’d say four milestones changed the landscape.

First, in the early 1990s, the Industrial Union Department of the AFL-CIO created the KP Coordinated Bargaining Committee to improve the unions’ bargaining position. That committee, which included most of the major unions at Kaiser Permanente, became the Coalition of Kaiser Permanente Unions. We were charged with coordinating a full-scale “corporate campaign” against KP.

But we realized we might do permanent damage to the company and to our 57,000 coalition union members. So we opted to pursue an alternative strategy. In the mid-’90s, we approached KP with a bold new idea—partnership. Unlike other union-employer “cooperation” arrangements, where management would come to labor for help after decisions had been made, the proposed partnership called for labor’s integration into KP’s management and operations structure.

After almost a year of discussions, Kaiser Permanente agreed, and in 1997, the Labor Management Partnership was formed. The decision demonstrated courage on both sides. It placed a value on the knowledge possessed at every level of the organization, from the boardroom to the front line. Building on that, we broke away from traditional, reactionary problem solving and turned to interest-based problem solving and consensus decision making.

This led to the fourth milestone—the decision to conduct national bargaining using those same problem-solving methods and to include operational leaders and rank-and-file union representatives at the bargaining table.

Other factors have contributed to KP’s financial turnaround, but there can be no denying the impact the partnership made—and continues to make—in ensuring that Kaiser Permanente is the national leader in health care, with a great place to work and industry-leading salaries, wages and benefits. Its position did not come about by accident, but by the courage of leadership and the power of partnership.

Visit Kaiser Permanente's 70th anniversary mini-site.

Elizabeth Rollice, RN, always knew that the Intensive Care Unit at the Woodland Hills Medical Center in Southern California was a great place to work.

As a staff nurse there, she and her co-workers enjoy good teamwork and excellent communication, and they deliver high-quality care to the sickest patients.

Now they have proof of their success.

This spring, the unit received the Gold Beacon Award for Excellence from the American Association of Critical-Care Nurses, the world’s largest specialty nursing organization. The award recognizes hospital units that demonstrate exceptional care through improved outcomes and greater overall patient satisfaction.

The team will be honored at the National Teaching Institute & Critical Care Exposition in San Diego, May 18-21.

“I knew that we did a good job and that everyone worked well together,” says Rollice, a member of UNAC/UHCP and a representative on the department’s unit-based team. “This award validates the quality of our work and tells us, ‘Yes, we are doing a pretty good job.’ ”

What’s best for the patient

Superb communication and a culture of collaboration among all members of the care team are key to the team’s success, enabling the consistent practice of evidenced-based medicine that has improved the quality of care.

Daily multidisciplinary rounds, for example, involve everyone on the care team who touches the patient.

“It’s about working in partnership with physicians, nurses and other staff to deliver high-quality care based on the newest evidence,” said Lynne Scott, RN, a clinical nurse specialist for the Critical Care and the Definitive Observation Unit. “We’re constantly moving forward.”

Nurses say team rounding gives them an opportunity to speak up and influence care decisions that affect their patients.

“We’re able to talk together about what’s best for the patient,” said Erica Bruce, RN, a UNAC/UHCP member who is the team's union co-lead. “If I feel that something is inappropriate, then I get a chance to ask the doctor. Family members get to ask questions about their concerns, too.”

Multidisciplinary rounding has produced an unintended benefit—higher member satisfaction. “I started in the ICU in 2002. We didn’t have a big rounding team at the time. Families sometimes felt unsupported,” recalls Paramjeet Dhanoa, RN, a staff nurse and UNAC/UHCP member. “Now that we have a big team, our families are more satisfied, because they feel they are not alone in making decisions. They are more comfortable.”

Open communication

Communication is vital in a department where staff members work around the clock in rotating shifts. To ensure information is consistently shared from shift to shift, the team:

• practices Nurse Knowledge Exchange Plus (NKE Plus)
• holds monthly UBT meetings, with members of the representative team responsible for sharing information with individual staff members
• holds quarterly staff meetings; those who miss the meeting must review the staff meeting binder and sign a form indicating they’ve read it
• uses a bulletin board to post important news and activities

The bulletin board, sandwiched between the nurses’ station and the staff restroom, attracts passersby with colorful fliers and posters.

“Your eyes are drawn to that communication board,” Rollice says. “You pass by a wall full of fliers, notes and postings, you can’t help but stop and look. It’s in a prime location.”

Conducted at the patient’s bedside, NKE Plus provides nurses with a template for patient safety and communication.

“It helps promote open communication and it helps us understand what’s going on with the patient,” says Judy Stone, RN, a staff nurse and UNAC/UHCP member, of the structured, in-depth, face-to-face handoff between the outgoing and the incoming nurse.

Stone says an additional itemized checklist “forces us, as nurses, to have all the pieces of the puzzle ready in the morning for multidisciplinary rounding. It really focuses us on everything that is going on with the patient so that we can deliver the best care that we possibly can.”

Clinical successes

Building the culture of collaboration and openness has had a big payoff:

• No ICU patient has contracted VAP since the first quarter of 2011.
• There have been no central line-associated bloodstream infections since the fourth quarter of 2011.
• The unit achieved the 86th percentile on the HCAHPS (Hospital Consumer Assessment of Healthcare Providers and Systems) patient satisfaction survey from January 2013 through August 2014.

“To consistently deliver the best patient outcomes, you must have the processes and structures in place,” says Kareem Younes, RN, nursing project coordinator for Woodland Hills. “It’s about doing the right thing at the right time, every time.”

Fists pounding on tables, demands, showdowns, strikes. So went traditional collective bargaining: Each side fighting for a bigger slice of the same pie. Each side gunning for a narrowly drawn agreement on pay and working conditions, leaving mutual concerns about patient care, quality and affordability unaddressed.

But Kaiser Permanente and the Coalition of Kaiser Permanente Unions abandoned the traditional approach in 1997, when they founded the Labor Management Partnership.

Our negotiations feature committees, observers and flip charts of options. Since 2000, KP workers, managers and physicians have worked together to craft four National Agreements and one reopener amid relative labor peace. On March 30, some 150 representatives will begin to negotiate a fifth agreement. Assuming all goes according to schedule, the new contract for the 100,000 workers represented by 28 locals in the coalition will be ready to go into effect when the 2012 National Agreement expires Sept. 30.

In an age of growing health care costs and increased competition, the joint goal is to provide our health plan members and patients with better, faster, less expensive and more personal care and to maintain and improve the best health care jobs in the United States.

Bernie Nadel is director of customer service and call center operations at Patient Financial Services in Southern California. He co-chairs the Regional Operations LMP Council, bringing together 27 business units, including the regional laboratory, central refill pharmacy and optical services.   

None of us was born into a unit-based team. Partnership is learned. Teams and their leaders need guidance and a playbook.

I tell other managers partnership makes my job easier. I have 10 other people helping to come up with solutions. I know some managers are uncomfortable with that approach. They act as though they can opt out of the Labor Management Partnership. It’s as if they said, “I know we have KP HealthConnect™, but I want to use this other computer program.” I say, if you don’t want the LMP, don’t work at Kaiser Permanente. You don’t get to opt out of the company’s policy.

Owning the work

Recently, our UBT went through a list of issues to work on. Call volume is up 30 percent, and we’re figuring out how to deal with that. We are going to do several tests of change. UBT members are gung ho about it. If I were to try to make those changes myself, I’d miss things. I would not get the insights of the people who interact with our members every day. And the people doing the work wouldn’t have the ownership and energy that comes with having a voice. Employees know I believe in partnership—and I give them the time to do it. That is a challenge. But you can’t solve the problems if you don’t invest.  

Not that long ago this call center was a toxic environment. There was low trust and low morale. All that has switched 180 degrees. A big step was my predecessor attending a sponsorship training class, which led her to involving UBTs more in day-to-day operations. I wanted to build on that.  

Taking the first step

LMP is a dance between labor and management, and management has to take the first step. When labor sees that management is serious, that’s when it changes. We’ve shown that you can change the culture.

Recently, we had a meeting with top executives about improving the consumer financial experience. Our UBT representative group prepared a report, and it gave our executives insights they couldn’t get any other way. It was not slick, it was real. I’m grateful to the group for the experience, commitment and knowledge they bring to this work every day.