Unhealthy Debate

There's a new and nasty labor-management war. Health care is the battlefield. San Francisco is the front line.

The health care industry in Northern California, which leads the nation in managed care and hospital restructuring, is in a state of flux, marked by mergers and acquisitions, consolidations and closures. For years, even decades, there had been too many hospitals and too many insurers paying too many fees to too many doctors and specialists and testing labs.

Then managed care cut the fat with a scalpel, limiting the length of hospital stays and the discretion of doctors, making competition among hospitals a battle of the biggest and the cheapest and drawing Wall Street investors into the game. And with the health care revolution — the bloodless search for market share and maximized profit — has come a new kind of labor fight.

The fight is not just another struggle between unions and management, a wrestling match focused on the particulars of overtime and cost-of-living raises. This fight is bitter and deadly serious. It's a battle about the next phase of health care and what it will look like, and the public is on the battlefield, too, packed inside a windowless trailer hitched to a supply truck that's heading down a long, bumpy road toward the front lines.

The truck is full of politicians and lawyers and consultants and public relations professionals.

On an unseasonably warm day in April, the Oakland Medical Center, one of 16 California hospitals owned by health care giant Kaiser Permanente, is ringed by employees dressed in surgical scrubs and lab coats. The employees are carrying signs denouncing the evils of what they call “corporate health care.” They're encouraged by the regular honks and hoots of passing motorists — it's not hard for unions to find support in this blue-collar city.

From the strike's epicenter, you can see the top of Kaiser's headquarters, looking over downtown Oakland, the Kaiser name emblazoned across the front of the building in familiar blue letters. It would be an understatement to say the vision is ironic; Kaiser was built by labor. Its roots stretch back to the 1940s, when Henry Kaiser began a health plan for the workers in his shipyards, angering conservatives who considered him a union sympathizer.

But that was before the huge health care organizations of the 1990s were talking about eating Kaiser's lunch.

The California Nurses Association, which represents about 7,500 nurses working in Kaiser facilities across Northern California, has declared a one-day strike against 45 Kaiser hospitals and clinics. The health care giant is demanding that the nurses take 13- to 15-percent pay cuts during the next six years, despite the company's growth. During the past year Kaiser has gained 100,000 new members in Northern California alone, a 4 percent increase.

The pay cuts are really a whopping market correction for Kaiser, which has long paid its nurses among the highest salaries in California health care. At the same time, Kaiser is offering the nurses a bonus of up to 2 percent of pay, based on the attainment of certain goals — including financial goals. This proposal has particularly irked the nurses, who sponsored a ballot measure last November that would have banned health care firms from offering similar financial incentives to doctors. (Such incentives had led to repeated complaints that doctors working for some managed-care plans had protected their bonuses by refusing patients needed care.)

Patient care is, in fact, central to this labor-management battle, more important to the combatants, in some ways, than pay. In the age of managed care, health firms have reduced costs by wrenching down hospital admissions and limiting lengths of stay. Fewer people, therefore, are in the hospital, but those who are there are sicker. Meanwhile, the hospital industry has increasingly turned to lower-cost, less-skilled workers to handle patients, under the supervision of registered nurses, who are, by extension, responsible for more patients than in past years.

Nurses, legally accountable for patient care by the terms of their licenses, are concerned that hospital staffing is being based more on sheer numbers of patients than on how sick those patients are or what kind of care they need. The nurses want to be granted authority equal to management's when staffing levels are determined. But Kaiser has been unwilling to put those sorts of management details in a contract, and has refused to go back to the bargaining table without a federal mediator.

This strike is a particularly well-orchestrated event. Support from other employee unions, most notably Service Employees International, boosts the total number of Kaiser employees walking off the job to more than 23,000. An array of political activists, including the Berkeley Gray Panthers, have also joined the event. There is nothing like senior citizens picketing a hospital for good drama — and good media coverage.

In fact, the public relations battle between Kaiser and the nurses has been going on for a long while now, and Kaiser is not faring well. The nurses have been throwing piles of dirty Kaiser laundry to regulators, politicians, and the media. They, in turn, have been catching and examining it.

Last fall, the California Nurses Association sponsored the Patient Protection Act, or Proposition 216, a ballot initiative that contained several provisions that are anathema to most major health care organizations. The initiative lost, but the campaign in support of it hammered health care firms with daily missives titled “Casualty of the Day.” These press releases documented harmful effects of managed care across the state, many involving Kaiser, many of them fatal to patients.

More recently, the nursing union collected signatures from the entire East Bay congressional delegation and a host of local politicians on a letter that asked all Bay Area hospital administrators to stop plans to “reduce, downgrade, or consolidate” emergency or critical care services for 90 days. The letter was aimed at Kaiser, which is in the process of closing parts of its hospitals in the East Bay, including the Oakland Medical Center.

The nurses have also gone to the National Labor Relations Board, alleging Kaiser has unsafe staffing levels at some of its hospitals; the board has charged Kaiser with bargaining in bad faith for refusing to hand over information on patient care to the nurses. [page]

And nurse complaints have state and federal inspectors crawling all over Kaiser. Last August regulators found numerous deficiencies in service in Kaiser's Northern California region. In March, a patient died while being transported from Kaiser Foundation Hospital, Richmond Campus, to another hospital. She was the third patient to die in or awaiting transport since Kaiser stopped hospitalizing acute-care patients in Richmond as part of its hospital consolidation program.

Somehow, even consumer advocate Ralph Nader was persuaded to jump into the dispute; he's called for state regulators to prevent Kaiser from enrolling patients until the staffing and other problems are fixed.

Company officials have made a public apology for the staffing problems, which, they say, were created when more nurses and technicians than expected quit ahead of downsizing at three Kaiser hospitals in the East Bay.

Today, though, is strike day. The talk is about nurses, who are overflowing the sidewalk in front of Kaiser's main entrance. Official representatives of organized labor and political groups weigh in, pledging their support in passionate soundbites that carry for a two-block radius.

Security guards periodically move people aside to allow vans with darkened windows into the driveway. It's pretty clear the vans are bringing workers across the picket lines, some from other Kaiser facilities and some hired in from nurse registries.

Hospital officials cannot estimate the cost of this one-day labor action. All non-emergency procedures at Kaiser facilities have to be rescheduled, some patients are moved, doctors and supervisors must perform nursing duties. That's not to mention the contract nurses brought in at high hourly rates. In total, the number of hospital patients drops some 32 percent. Although Kaiser engages in a full-court media press, the publicity damage is enormous.

That cost, however, is one that Kaiser, with $12 billion in annual revenues, is apparently willing to bear. And Kaiser will have its responses to this union offensive. On the medical field of battle, the labor-management war is hardly one-sided.

The brochure, which advertises a May conference in Los Angeles, says it all: “Union Avoidance for the Health Care Employer.” Produced by New York-based Executive Enterprises Inc., the conference allows health care managers to learn about fending off health care unions while earning continuing education credits that are required to maintain certain professional licenses.

During the two-day seminar, health care executives will learn “New Union Techniques in Health Care Industry Organizing,” “Preserving the Supervisory Status of Nursing Personnel,” and “Winning the NLRB Election,” among other things.

Call it highly organized management responding to highly organized labor. Consulting to the health care industry is rapidly becoming one of the most lucrative businesses in the country, and advising health organizations about their labor problems makes up a big part of that consulting boom.

The current buzzword in health care is “restructuring,” something medical corporations can't seem to do on their own. For as much as $3,000 a day, consultants come in and provide health care firms with everything from consumer advertising to down-and-dirty union busting.

It is all but impossible for outsiders to ferret out how much each corporation pays to which consultants for what; financial disclosures required by the government don't provide that type of specific information. But here's a clue: Kaiser paid $96 million to consultants in 1995 for services that included direction of a massive advertising campaign, legal work, and the restructuring of Kaiser's hospitals and staffing.

Meanwhile, the large unions involved in health care — Service Employees International (SEIU), for one — have entire staffs of people dedicated to research, organization, and strategy. The AFL-CIO, to which the SEIU belongs, has its own Organizing Institute, which helps train health care's rank and file in warfare against management.

So not only are employers and employees fighting each other; the employer's consultants are fighting the employees' representatives. And this is trench warfare.

Corporate boards of directors, Wall Street investment bankers, consultants, and executives each have their own imperatives that boil down to one reality: Investors will judge them by the share price of the health care firm they run or advise. And those investors want lean, mean, profit-making health machines. They want downsizing. They don't want a union contract that restricts a health care firm's ability to buy, sell, merge, close, restructure, or cut.

And so the executives continue to go to union-crushing class.

Today, on a sunny day in April, a group of nurses and other health care workers, shepherded by newfound union leaders, is circling in front of the Tenderloin's Ambassador Hotel, carrying signs that bear the names and photographs of hotel residents they've cared for over the years. A nurse holding a sign in one hand passes out pieces of fried chicken to interested passers-by from an open box on the hood of a car.

The Ambassador is home to a program created by workers for a health care group known as Visiting Nurses and Hospice of San Francisco, in conjunction with city welfare agencies. The program provides medical care for low-income AIDS patients and drug users in the Tenderloin.

And that link to the city makes the Ambassador a particularly good place for Visiting Nurses and Hospice (VNH) workers to call attention to their battle with California Pacific Medical Center, which owns VNH.

This plan of attack runs directly through the community, supported by the well-established network of political activism in San Francisco.

In November, the Service Employees International Union held a “community election” for the right to represent the workers. This process for forming a union local has not been widely used for several decades. Essentially, the union had sidestepped a union election process under the auspices of the National Labor Relations Board, because the appeals process associated with an NLRB election can drag on for years. [page]

The November election was, indeed, a community event — but one that California Pacific didn't find at all pleasant. It was presided over by the Rev. Cecil Williams, the politically influential pastor of Glide Memorial United Methodist Church, and Superior Court Judge John Dearman, a former law partner of Mayor Willie Brown. They presented the overwhelmingly pro-union results of the election to California Pacific.

But management has steadfastly refused to recognize the community election format and its outcome.

“We don't know that it's the workers who are behind this,” says Sara Kelley, director of public affairs for California Pacific. “Our position is to abide by the NLRB process that is in place for this. We would absolutely honor an NLRB process.”

In fact, California Pacific filed a complaint with the NLRB alleging that the union had engaged in coercion, intimidation, and various other nasty practices. When the board found no wrongdoing in those regards, the company appealed. The union then filed an unfair labor practices complaint against management. Both complaints are still pending, but Service Employees International isn't waiting for NLRB action to flex its political muscle. That political backing is based not just on support for workers, but also on consumer concerns.

“We believe that there's a direct, fundamental, and necessary relationship between the empowerment of workers in the health care industry and the quality of care that consumers receive,” says Jeff Sheehy, a leader in the Harvey Milk Lesbian/Gay/Bisexual Democratic Club.

Delegations representing the gay, senior, and Asian communities visited the office of Dr. Martin Brotman, CEO of California Pacific Medical Center, and the law office of California Pacific board member Michael Roosevelt. The union leafleted Roosevelt's home in Orinda. Mayor Brown called Brotman.

During the last four months, more than 200 people from various organizations have rallied at the VNH offices on Geary Boulevard, at the entrance to the California Pacific Medical Center on Webster Street, and in front of the Financial District offices of Sutter/CHS Corp., the Sacramento-based health care conglomerate to which California Pacific is attached. On one occasion, 23 people were arrested.

“I've been at different actions where they [union sympathizers] have blocked patients from registering,” says Kelley. “They've blocked patients from access in wheelchairs. I've specifically talked to physicians whose windows are over the organizing, and the bullhorns and the drums are preventing them from talking to their patients.”

California Pacific still refuses to recognize the election.

At a lunchtime rally in front of the Visiting Nurses and Hospice offices last month, Eleni Hulenicki, a registered nurse who works for the agency, spoke out about the “human connection” she felt was being lost in the restructuring of health care. One of her patients also spoke out, saying he wished patients could join the strike.

Nurse and patient are connected by a lifeline. As managed health care shifts more of the sick away from hospitals, the home health care industry has grown by leaps and bounds.

Nurses, aides, social workers and therapists who work for home health agencies such as VNH care for the sick and dying in expensive homes, apartment buildings, and run-down hotel rooms all over San Francisco. They check on new mothers, frail seniors, drug users, AIDS patients. They feed and bathe people, administer medication, record vital signs, and sometimes call in other services to help. They hold hands. And sometimes, they are the last ones to say goodbye.

The day after the rally, Hulenicki was suspended from VNH. According to union representatives, the nurse had accepted an assignment from the agency in February to assess a patient's mental and emotional state.

What Hulenicki did was, quite simply, wrong. She is not legally qualified to make an assessment of a psychiatric patient.

VNH management told her she was being suspended because she did not follow policy on psychiatric patients. In other words, the agency was punishing her for not refusing the assignment given her by the agency itself. Hulenicki argues that she was unaware of the agency policy on psychiatric assignments.

Still, the timing of the entire incident is suspicious.
Management says the date of Hulenicki's reprimand for the psychiatric assignment — one day after she criticized VNH at a union rally — was merely a coincidence.

“I don't see the timing as relative,” says California Pacific's Kelley. “I see the behavior as relative.”

But union representative Andrea Staples says that VNH has never disciplined anyone in a similar scenario and calls the suspension retribution.

Standing in the bed of a pickup truck holding a microphone in front of the Kaiser Medical Center in Oakland, Nancy Cosazza is obviously a bit uncomfortable and definitely unrehearsed. Maybe it's the hospital uniform and the white sweater, her hair pulled back into a bun … there's just something wrong with this picture.

Cosazza has cared for the sick and wounded for 30 years, some of them as an Air Force flight nurse, the last decade as a registered nurse at Kaiser. Usually, if she's at the Oakland Medical Center, she's working in the emergency room.

Nurses didn't go on strike when Cosazza started in this profession. As a matter of fact, it wasn't until 1968 that the American Nurses Association lifted its official no-strike policy. Yet during the past year alone, the California Nurses Association has organized members in five Northern California hospitals. This is the kind of organized labor movement that many nurses considered unprofessional not long ago, and there is a reason for the general shift in attitude. It is a reason that relates directly to the societal shift to corporate health care, the merger of health organizations and the rise of the HMO.

Being a nurse has changed since Cosazza began her career, and most of that change, she says, has occurred during the past five years. [page]

“There was this guy in his 20s, who fell off a scaffolding and had 14 broken bones in his arms and legs,” she explains matter-of-factly. “I picked up the chart and it said, 'crutches and splint and send home.'

“OK, he had a splint on one arm. The other wrist was sprained. He had a broken ankle and his other leg broken … there's no way this guy could walk on crutches. Plus, he's in and out of consciousness because of the [pain] medication.

“This guy was going to go home in the back of a pickup truck with his friend. He had to have a bedpan and a urinal and a hospital bed.

“I told the ER doctor, who fortunately agreed with me. I heard him on the phone saying, 'Just how many broken bones does it take to get somebody admitted nowadays?' ”

And, of course, there is no such thing as a routine day in the emergency room.

“If I'm in triage starting at 3 p.m., I might not have a second [nurse] until 6 p.m. If there are four or five people waiting … and here comes an ambulance in with a heart attack patient. I have to go to the heart attack patient. And I have to go get the charge nurse to help out, and I have to get the most stable patients out of there and into another room. There might be 10 people in line.

“It's my responsibility to keep an eye on that line and see if there's anyone who is really sick or bleeding from the head or what have you. I've got to take them in order of their condition,” Cosazza explains.

“And somebody is in the ambulance entrance saying, 'Can you help me to go to the bathroom?' What am I going to do as a responsible nurse? I'm going to have to tell them, 'I can't help you right now.' And sometimes I don't even have time to tell them that. It's perceived as inattention and rudeness, and people think we don't care.”

In business theory, this predicament is known as the “speedup effect.” Fewer workers must do more things. In health care, though, the speedup effect is not theory but reality, and it's challenging the professional practice of nursing. Registered nurses are required by state law to advocate for patients and to exercise independent clinical judgment. It's part of their license as nurses. This charge makes nurses officially sanctioned whistle-blowers, a status that is particularly annoying if you're a health care conglomerate and want to admit fewer patients and assign more and more routine tasks to unlicensed staff.

The more health care corporations restructure, the more nurses are squeezed by the push for profit. And so, three decades after becoming a nurse, Nancy Cosazza spends her time speaking at legislative hearings, and handing out leaflets to strangers. And standing in the bed of a pickup truck outside a hospital with a microphone, saying,

“Do we know why we're out here and not in there where we should be?
“Corporate tyranny.”

Throughout the first few months of this year, the residents of Castro Valley were inundated with television commercials about the caring world of the Sutter/CHS Corp. They received brochures in the mail telling them that Sutter could “save” their community's Eden Medical Center — a publicly owned hospital governed by an elected board of directors — from fiscal pressures that were jeopardizing its very existence.

Because Eden is owned by a hospital district, and hence the public, Sutter's bid to purchase it required a vote of the people. The proposed purchase also required Sutter to overwhelm opposition from unions, specifically, the Service Employees International Union. Sutter and the SEIU are archenemies. There is a history of bitter labor fights at other Sutter facilities. The SEIU was not about to let Sutter take over management of another hospital where the union represented employees without a fight.

The union managed to garner support from both the Republican and Democratic central committees, the California Congress of Seniors, the California Physicians Alliance, the Alameda County Firefighters, and a handful of local politicians.

But Sutter had a better weapon: money. Big money. The corporation spent more than $1 million on its campaign in favor of the purchase, outspending the union by about 6-to-1. Aside from television commercials, the money paid for advertisements in local newspapers, more than 15 mailings to prospective voters, and professional phone solicitors. It was the kind of electioneering generally reserved for statewide races.

The campaign worked. On April 22, 54 percent of those voting in the district election gave Sutter approval to purchase Eden Medical Center. And it appears to be a real deal. Sutter snagged Eden, with net assets of $52 million, for about $40 million. From now on, the Sutter corporation will take just under 2 percent of the hospital's operating budget for managing the place, which turns an annual profit of $8 million.

To say that Sutter is in acquisition mode is like saying that the Democrats were exploring fund-raising sources during the last election.

Until the mid-1980s, Sutter operated two hospitals in Sacramento. Today, the $2.5 billion corporation holds 25 hospitals, a handful of home health agencies, a health maintenance organization, 7,600 affiliated doctors, and more than 30,000 employees in its web.

That's the way the game works. And there is no place for the weak competitor.

Because of overbuilding in the 1980s, hospitals in the Bay Area average just 50 percent occupancy. Health care organizations are in a frenzy of buying, selling, and merging with each other. It is a process aimed at reducing the overcapacity and the costs of running the hospital capacity that does exist.

For-profit health systems — notably Tennessee-based Columbia/HCA — have shown Wall Street that bottom-line management tactics can increase profits in health care. And hospital profit margins have risen 10 percent since 1991, according to the government's Prospective Payment Assessment Commission. [page]

To stay in the game, nonprofits like Sutter/CHS and Kaiser have started acting like the for-profit chains, keeping a sharp eye to the bottom line. Big clients can play one health care provider against the other. Every incentive in the system tends toward the cheaper, leaner, more profitable. And after the obvious excess is gone, there's not a lot to cut except people.

On a Saturday morning in April, about 100 people sit on folding chairs in the auditorium of the Plumber's Hall on Market Street, sipping coffee and munching doughnuts. The mood is decidedly upbeat; seriousness and uncertainty have been temporarily overshadowed by camaraderie and programmed encouragement. The occasion is an impending vote on whether to strike over unfair labor practices — alleged coercion and intimidation of union activists — at Visiting Nurses and Hospice.

VNH has been in turmoil for some time, marked by frequent turnover of management and consultants. More recently, an eight-month federal survey inspection threatened to end the agency's Medicare certification; the threat was deemed serious enough that VNH scaled back on taking new patients while the agency worked on making the government happy. Many home care workers, who are paid by the visit, are seeing fewer patients than they used to; now, the workers want a greater say in scheduling and other issues related to patient care.

The past six months have been marked by marches, rallies, candlelight vigils, luncheon barbecues, songs, and bullhorn-led chanting outside both the Visiting Nurses and Hospice offices and the California Pacific Medical Center. All the while, company security officers in gold coats have surveyed the scene. Video cameras have whirred; steno pads have been filled with names.

Here, on the stage of the auditorium, a television sits ready for the videotaped address to the troops from AFL-CIO President John Sweeney, a former head of the Service Employees International Union who has vowed to make health care the cornerstone of a union resurgence. But first, a parade of prominent Bay Area figures moves to the microphone, each pledging support.

Among them are the required: the San Francisco Labor Council.
The political: the Harvey Milk Lesbian/Gay/Bisexual Democratic Club, the Senior Action Alliance, and San Francisco Supervisors Tom Ammiano and Sue Bierman.

The indebted: the California Nurses Association, which the SEIU supported only days before in its strike against Kaiser.

The recently organized: Lusty Lady strip club dancers, the first strippers in the country to form a union.

The academic: women's studies and labor studies professors from San Francisco State University.

And, of course, the perpetual grand marshal: Mayor Willie Brown.
“I love every second of this struggle,” Brown tells the exhilarated crowd. “And I will love the victory even more.”

It's no big surprise that there are nearly as many community folks and union staffers present in the auditorium as actual Visiting Nurses and Hospice employees. This is but one battle in the war for health care.

One of the big issues here involves the health care of the caregivers themselves. A good portion of the 500 or so VNH workers are contracted on a “per diem” basis, with work hours that vary with their patient load.

These employees don't have health benefits, even though they work for a hospital.

The mood in the auditorium sobers, and the discussion turns to fear. Only days ago, California Pacific CEO Martin Brotman told the workers that it was “not the right time” for them to form a union. That speech is still replaying in their heads as they take turns offering testament for and against the strike. Most of them talk about what's happened to their jobs, and how it has diminished the quality of care for patients.

“Management has screwed this place over for two years. Workers didn't do that.”

“We have doubts. I've had doubts since August. … The bottom line is that we're all scared.”

“Health care is in crisis. We need to be the little engine that could.”
Finally, it's time for the big event.
For the first time in hours, the room falls into dead silence as workers stand with their right arms raised in a vote that may jeopardize the only income many of them have.

They remain eerily quiet while a handful of “official observers” move through the crowd, counting votes. Dusty banners proudly displaying labor history hang from the ceiling, ghosts watching over a new era of organizing. It's hard not to be moved, regardless of how many times you've seen this same scene.

The answer is also no surprise. The nurses, aides, social workers, and therapists of Visiting Nurses and Hospice have voted to serve legal notice of a one-day strike against the company to protest its unfair labor practices. The crowd erupts into cheers and hugs. Finally comes the chant — “Union Power!” — loud enough, almost certainly, that the company security officers outside the hall can hear it.

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