Coalition of KP Unions’ delegates
endorse tentative agreement
Over the weekend, 500 delegates representing 30 union locals and 96,000 Kaiser Permanente employees reviewed and unanimously endorsed the tentative agreement on a new, two-year National Agreement. This meeting was the first step toward the coalition unions’ ratification of the new National Agreement.
The tentative agreement now moves to the local unions for voting. Local bargaining will be conducted over the summer to renew the terms of the agreement only, unless, by mutual agreement, the parties decide to discuss non-economic issues. Exceptions to this are UFCW Local 555 and SEIU Local 121RN, which will be addressing specific issues.
If ratified, the contract will go into effect on October 1, 2010.
Kaiser Permanente and Coalition of Kaiser Permanente Unions reach Tentative Agreement for new Union Contract
Early Friday morning, after a three-and-a-half day marathon bargaining session, Kaiser Permanente and the Coalition of Kaiser Permanente Unions reached a tentative agreement on a new, two-year National Agreement. During negotiations, the parties made progress toward improving affordability, service and quality for health plan members and being the best place to work. The unique Labor Management Partnership – the most enduring, largest, and most successful of its kind in any industry – puts industry-leading performance improvement tools into the hands of empowered workers, organized into teams, fueling constant performance improvement.
The tentative agreement provides for two annual 3% across-the-board wage increases, maintenance of the current benefit package, an enhanced sick leave cash-out option, stable funding for workforce development trust funds, and strengthening the Labor Management Partnership, the watershed 13-year old agreement under which the parties have successfully negotiated three national union contracts using interest-based negotiating. A strategy to improve quality outcomes, unit based teams were reaffirmed as part of the operating model of Kaiser Permanente.
This tentative agreement is the result of many hours of meetings, brainstorming, caucusing, and discussion – conducted by a record-high number of 111 negotiating committee members and more than 100 rank-and-file union observers – all of which affirmed the strength of the National Agreement, and requiring only a narrow scope of language changes.
Economics
- Two across-the-board wage increases of 3%, effective October 1, 2010 and October 1, 2011, for all Coalition members in every region.
- An additional 0.5% for Southern California registered nurses, California clinical lab scientists
- Maintenance of all current benefits
- Funding for the Workforce Planning and Development Trust funds, which provide for worker training and skill upgrades both for current and displaced workers, at the rate of 0.27% of annual payroll
- Two-year agreement expires September 30, 2012
- Sick leave cash-out incentive increased to 75% (see below).
Sick Leave
New language in the National Agreement will increase a cash-out incentive for employees who bank their sick leave. Currently, employees with at least 10 days of banked sick leave at the end of each year can cash out up to 10 days of unused annual sick leave at 50 percent of value (or the proportional equivalent for part-time employees). Employees now have the option of cashing out up to 10 days at 75 percent of value if they have at least one year’s worth of annual accrued sick leave in their post-January 1, 2006 bank.
A change was also made to shift the date when employees receive their allotted sick time. The National Agreement currently frontloads employees’ sick time in January. New language changes sick leave distribution to an employee’s anniversary date. A transition year will be put in place as we move to this system. No days or benefits will be lost in the process.
Workforce Planning and Development
New language in the National Agreement surrounding Workforce Planning and Development addresses communications, redeployment, hard-to-fill positions, and funding of the education trusts. The new agreement provides that education trusts receive annual funding based on .27 percent of payroll. Those funds would support base services, such as the Individual Stipend, Forgivable Loan and Career Counseling programs. An additional $3 million a year will go to the Ben Hudnall Trust Fund.
New language also ensures that when positions are eliminated or staff redeployed, Workforce Planning and Development should be engaged as soon as the unions are notified, so that Coalition employees consistently receive assistance as early in the process as possible.
In addition, a task force wiil be created to identify the barriers in hard-to-fill/critical positions.
Labor Management Partnership and the Value Compass
Language changes will strengthen the workings of the Partnership through new mutually acceptable accountability systems, uniform national rating and tracking of unit-based teams, and progressive goals for increasing the number of high-performing unit-based teams over the life of the contact.
For the first time, the Value Compass is included in the National Agreement as a key operating strategy for Kaiser Permanente. Improving performance requires that everyone focus on the needs of our patients and members. The Agreement envisions a path moving from projects, to pilots, to whole systems improvement, recognizing that all four points of the value compass (affordability, quality, service and the best place to work) impact the total value that the organization creates.
Performance Improvement & Performance Sharing Program (PSP)
In the area of Performance Improvement/PSP, language changes were made to encourage and sustain high performance, and strengthen the connection between performance and rewards. Unit-based teams were reaffirmed as part of the operating model of Kaiser Permanente and their goals will now be aligned with national, regional, facility and unit goals to improve the performance of the organization.
Performance improvement and PSP (the Performance Sharing Program, which rewards Union Coalition-represented employees for meeting certain regional goals) are key elements of KP strategy. New language was added to bring greater clarity, consistency, and effectiveness to the programs—in effect, to maximize the returns for KP, for frontline teams that do the work, and ultimately for our members and patients. Among the recommendations are clearer timelines for PSP goal-setting; periodic communication about progress against PSP goals; LMP training for new employees; and a continued emphasis on “line of sight” goals whenever possible.
For endorsement, the tentative agreement will go to the Union Delegates Conference on June 12, and the Kaiser Permanente Program Group and the Kaiser Permanente Board of Directors will review the document shortly thereafter. The agreement will then be submitted to the members of individual unions for ratification this summer. If ratified, the contract, and the first annual wage increase, will be effective October 1, 2010.
CIC accepts subgroup recommendations, begins economics
The third session of national bargaining concluded yesterday with the Common Issues Committee accepting joint recommendations from the four CIC subgroups, and beginning the process of discussing economics. The next – and final – bargaining session will take place May 25-27 in Los Angeles.
“We’re mindful of the 160,000-some people who aren’t here at bargaining but who have a huge stake in what we do. We’re here to represent their interests and to represent the possibilities kept alive by the 2005 National Agreement,” said John August, executive director of the Union Coalition. “We’ve involved a lot of people in the unique process, including people who have not been involved before. And we’re here to solve problems and make a difference. That’s what our colleagues back home expect of us.”
The sub-group recommendations made to the CIC in this session reflect significant work by each subgroup to reach consensus on issues that need to be changed, highlighted, or enhanced in the current National Agreement. The subgroups took on the tough questions of partnership: how do we work together to address issues of performance improvement, working conditions, our work environment, and the future of our partnership.
“These conversations provide us the opportunity to understand each other’s work. We’ve been able to understand each other’s interests and how this impacts our workplace—achieving truly superior outcomes than are possible in a traditional bargaining process,” said Chuck Columbus, KP’s senior vice president of National Labor Relations. “We are grappling with the hard questions so that we can move toward concrete solutions—reaching consensus and not just compromise.”
During the final 60 minutes of the three-day session, chief negotiators for the unions and management began outlining their respective economic interests. The next step in the economic process will be discussing common interests, and brainstorming options for addressing the interests.
Economic Interests
Chuck Columbus, senior vice president of National Labor Relations, began by confirming that Kaiser Permanente wants to ensure that it is well positioned to respond to the opportunities presented by health care reform. However, while KP is well positioned to attract new members, there remains uncertainty about the actual environment in the new marketplace. For example, it is clear today that while more members may enter our system, the organization is likely facing lower reimbursements as our percentage of members in public programs grows, increased competition and new regulations.
“Now more than ever, the Partnership’s work to create market-leading performance in quality, service and affordability is essential,” said Columbus.
Taking into consideration this new marketplace, management presented three economic interests to the CIC:
- The on-going need to create value for our members, purchasers and patients.
- To achieve growth, KP must be more cognizant than ever of its price position, continually striving towards affordability.
- KP’s desire to recruit and retain the best people at the right market rate—those who are high performing, engaged and innovative.
Coalition Executive Director John August presented the Union interests. He said labor’s overarching interest is to “work with Kaiser Permanente to transform health care for the better in this country.” He emphasized the value proposition of “value equals quality divided by cost,” pointing out that empowered staff have the ability to significantly increase value, through higher quality and lower cost, for KP members and the communities we serve.
August said that as part of the value proposition, coalition unions have an interest in ensuring a high standard of living for working families – both KP staff and KP members – including strong middle class incomes, fair benefits, and the best possible health care. Within Kaiser Permanente, the Union Coalition has an interest in providing union members access to programs to develop their skills and education in response to changing workforce demands driven by health care redesign and technology.
In summary, he said, “We want to transform health care, deliver on the value proposition, protect and improve our standard of living with a reasonable wage increase, and provide access to skill and career development.”
CIC accepts sub-group recommendations
The recommendations from the sub-groups covered only the highest-priority, agreed-upon interests—and were the result of many hours of meetings, brainstorming, caucusing and discussion. In addition to driving language for the National Agreement, a substantial amount of their work will shape the Labor Management Partnership during the term of the next contract.
August and Columbus said that the participants in each of the subgroups made a lot of progress and the outcomes were very positive. The subgroups addressed attendance; labor management partnership priorities; performance improvement and the performance sharing program (PSP); and workforce planning and development. The content of the recommendations will be released when they are finalized as part of a complete, tentative National Agreement that includes economics. The bargaining schedule calls for the tentative National Agreement to be completed by the end of May, after a final, three-day session May 25-27 in Los Angeles.
Subgroups make progress in national bargaining
In the second three-day session of national bargaining, four subgroups tackled improving Partnership, attendance and healthy workforce, workforce planning and development, and performance improvement/performance sharing program. The negotiations are being conducted by a 111-member Common Issues Committee. The CIC is composed of 68 union members and 43 KP leaders. In addition, local unions brought more than 100 frontline observers to the meetings.
As with national bargaining in 2000 and 2005, the parties are following the interest-based bargaining (IBB) process. While the process is slower – compared to traditional bargaining – in the opening sessions, it has resulted in better and more durable national agreements in past years.
Under IBB, union and management negotiators follow these steps:
- caucus separately and articulate their interests to each other
- agree on common interests
- brainstorm options that meet both common and separate interests, and
- prioritize and agree on some or all of those options
The subgroups spent this week’s sessions articulating interests, agreeing on common and separate interests, and brainstorming options. By the next session, which takes place May 4-6 in Los Angeles, each subgroup is expected to present its recommendations to the full CIC. In the final session May 25-27, the CIC will consider these recommendations as well as complete the wage and benefit negotiations.
The Labor Management Partnership subgroup members of the CIC advanced discussion on separate and common interests regarding the future of the LMP. As Pat Gibbs, one of the labor co-leads of the subgroup, explained, “Our goal is to make sure the Partnership lives up to expectations.”
Key points of discussions centered on these areas: full accountability for the success of unit-based teams shared among partners; adequate and transparent funding streams for the LMP operations; resolving disputes; and positioning KP and the Coalition Unions for future success.
The Union interests included growing union membership; positioning Kaiser Permanente as a model for health care; strengthening the Partnership by jointly developing and implementing benchmarks, goals and metrics to measure progress; dispatching lingering grievances and increasing business literacy and trust fund budget transparency. The members also presented options that often focused on labor and management together establishing business, union and contract literacy curricula for all partners.
Management committee members discussed various interests that included enhancing flexibility to meet UBT goals, finding better ways to share best practices and help other teams adopt these practices.
The subgroup continued sharing interests and options with the aim of developing common interests for the CIC.
Barb Grimm, management co-lead of the subgroup, said the group had made enormous progress in taking the next steps to strengthen the Partnership: “The fact that the partnership is unevenly experienced is something we’ve got to fix,” she said.
The Workforce Planning and Development subgroup agreed to some common interests and is working to develop more.
“We’ve analyzed the National Agreement thoroughly and everyone agrees it is very good,” said Charles Rader, associate director of Negotiated Benefits, UFCW
and union co-lead for the Workforce Planning and Development subgroup. “But we’ve identified some implementation and enforcement issues and determined some key areas needing emphasis and improvement.”
The subgroup reached a consensus that more communication about workforce planning and development is needed. Communications should leverage UBTs, include best practices, manage impact and expectations and make use of existing communications channels.
Labor and Management negotiators also agreed that they both have an interest in:
· Getting ahead of the vacancy curve to fill jobs
· Developing the workforce to meet the changing needs of the organization
· Positioning the organization for rapidly changing environment, in light of the health care reform legislation
· Enabling employees to give their best potential
· Enhancing employment security
· Not renegotiating existing workforce planning and development goals
· Maintaining joint oversight of funding
To address these interests, they grouped options into five key areas: communications, redeployment, hard-to-fill or critical needs positions, oversight and accountability of the program, and funding.
“I think one of the successes is that we’re having a discussion about redeployment and really trying to listen to each other and understand,” said Debbie Zuege, RN, senior. director, Nursing and Women’s Health in Colorado and a management co-lead for the subgroup.
The Attendance subgroup discussed a wide range of options, staying focused on their goal of developing specific recommendations on programs, processes and strategies that will result in significantly improved absenteeism rates.
Union members of the attendance subgroup expressed a strong interest in enforcing the 2005 National Agreement. “We have a Ferrari,” Ronald Jackson said holding up the contract. Jackson is a member of SEIU-UHW and is a medical assistant at the Irvine medical office building in Southern California. “We need to let it perform at its full potential.”
Together, union and management members brainstormed options to address issues negotiated in 2005 and 2008 including sponsorship and accountability, flexible personal days, the cashing-out of sick time, the new Health Reimbursement Account, frontloading, integrated disability management, the attendance intervention model, and staffing and backfill. The team analyzed data from within Kaiser Permanente and from other health care employers, as well as literature from other industries.
The Performance Improvement/Performance Sharing Program subgroup agreed on nine joint interests in the areas of performance improvement and 10http://www.bargaining2010.org/wp-admin/post-new.php for improving the Performance Sharing Program (PSP). Some of these joint interests include:
- Improve the ability of unit-based teams to be successful;
- Patient at the center of performance improvement;
- Ability to motivate and reward performance at a level we can influence/improve.
“This group is really looking at three big, important areas—performance improvement, the PSP and unit-based teams,” said Meg Niemi, SEIU Local 49 in the Northwest, one of the group’s two union co-leads. “But I’ve always found that when you get together with a roomful of committed, passionate, smart people, you get good solutions.”
Building on their joint interests, the group then developed options to recommend to the CIC for consideration. With regard to performance improvement, options addressed issues such as training and education; expectations/metrics/tracking; staffing, resources and union capacity; and accountability/structure. For PSP, options included funding/finance; eligibility; goals and metrics; administration/timelines. The group is now working to reach recommendations on performance improvement/PSP for the full CIC.
“I’m very confident in our ability to complete this work in the tight timelines we’re working against,” said Judy White, medical group administrator, Southern California Permanente Medical Group, one of the group’s two management co-leads. “The level of good will and intentions this group brought to the table to find solutions is tremendous.”
Negotiations begin for new national agreement
Leaders of Kaiser Permanente, the Permanente Medical Groups, and more than 170 union members from the Coalition of Kaiser Permanente Unions met this week in Oakland for their first three-day national bargaining session. After a half-day of orientation and another half-day of training in the interest-based bargaining process, the group broke into four sub-groups to begin tackling specific issues.
The negotiations are conducted by a 111-member Common Issues Committee (CIC). The CIC is composed of 68 union members and 43 KP leaders. In addition, local unions brought more than 100 frontline observers to the meetings.
Interest-Based Bargaining
As in 2000 and 2005, the parties are using an interest-based negotiating model. This is a collaborative approach to solving problems that strives to craft solutions that meet the interests of all parties. It also aims to preserve and improve workplace relationships and our Partnership. Instead of winning or losing, it’s about clarifying interests, generating options, and finding solutions that work for both sides.
The interest-based process begins not with positions or demands, but by clarifying issues. While the process requires a greater initial investment of time and training, the results achieved in the past two rounds of National Bargaining (in 2000 and 2005) show it is worth the investment.
Bargaining Context
To help the CIC understand the context of these negotiations, the bargaining sessions opened with Kaiser Permanente and the Union Coalition providing information about the state of the US health care marketplace, Kaiser Permanente, and our Labor Management Partnership.
John August, executive director of the Coalition of Kaiser Permanente Unions, provided a framework using broad themes to define interests in Bargaining 2010, from the passage of health care reform to the demand for high-quality, affordable health care.
“Partnership is an opportunity to navigate through a difficult time and to strengthen the great mission-driven social asset we call Kaiser Permanente,” said August. “The only way to preserve the mission of KP, and mission of the Unions, is for workers to have a voice on the job and best-in-class wages, hours and working conditions.”
He added that union workers have brought, and must continue to bring to the job, the commitment, innovation and performance improvements needed for a strategy for success. “We need to build this partnership to succeed in the future, no matter what the obstacles or challenges.”
Kaiser Permanente leaders affirmed their commitment to Labor Management Partnership and the frontline workers who carry out the organization’s mission.
And they praised strides that have been made in improving the quality, service and affordability of care, due in great part to the unit-based teams being formed across KP.
“It is an incredible strength and testimony that we sit here today with 86,000 employees working in or represented by UBTs, driving the agenda of service, quality and affordability—and we’ve only scratched the surface,” said Bernard Tyson, executive vice president, Health Plan and Hospital Operations. “One of the best assets we have are our people–and we’re not bashful about that. We are committed to the people who carry out our mission.”
KP Chief Financial Officer Kathy Lancaster outlined the achievements, challenges, and opportunities KP faces in the coming years: the thousands of improvements made by unit-based teams, the incredible efforts across Kaiser Permanente that resulted in bringing annual cost increases down to only 4.4% in 2009, and the achievement of operating margins sufficient to fund capital investments, technology, and long-term liabilities including rebuilding pension funds.
The challenge: to sustain these achievements over time, while the economy continues to teeter, along with the job market, and the stock market (which is a source of income for capital investments as well as pension funds). Kaiser Permanente leaders described the unprecedented changes continuing to take place in the health care marketplace and the broader economy, including the significant economic challenges posed by the recession: millions of job losses, membership losses, and a potentially slow or even jobless recovery.
SEIU-UHW Trustee Dave Regan called on leaders to seize the opportunity posed by health care reform. “Health care reform is really a singular event. In our lifetimes nothing like this will ever be replicated. There are 32 million people who are about to get health care.”
“We have an extraordinary opportunity – we have all the pieces we need to grow,” said Arthur Southam, executive vice president, Health Plan Operations.
As Dr. Jeffrey Weisz, executive medical director, Southern California Permanente Medical Group, stated, “We have a chance to show America how it is done…and we need to work together to drive performance to the next level.”
Issues
The CIC broke into four subgroups to address the following four issues: attendance and healthy workforce; developing the labor management partnership; performance improvement and performance sharing programs; and workforce planning and development. Economics will handled by the CIC as a full group, after the other four issues are addressed. The objectives of each subgroup are:
- Attendance—To develop specific recommendations on programs, processes and strategies which will result in significantly improved absenteeism rates and improve the health of the workforce.
- Labor Management Partnership—To develop specific recommendations on what Kaiser Permanente and the Coalition of Kaiser Permanente Unions should focus on, as partners, over the next several years.
- Performance Improvement/Performance Sharing Program (PSP)—How might we achieve and sustain superior organization performance, and how we can strengthen the connection between performance and reward at the unit/department level?
- Workforce Planning and Development—To develop specific recommendations on how we can develop an effective needs assessment process and ensure adequate funding to deliver on our workforce planning and development goals.
The subgroups began the work of identifying union, management, and joint issues in their area. Once that work is complete, they will examine data and generate options to address interests. By the conclusion of the third session of national bargaining on May 6, each subgroup will report a joint recommendation to the entire CIC on how the next national agreement will address their topic.
The final bargaining session, May 25-27, will be dedicated to finalizing these recommendations and completing the economic issues, to conclude the tentative National Agreement and agree on the scope of local bargaining. The tentative agreement will then be reviewed in June, and approved or rejected by the Union Delegates Conference, the Kaiser Permanente Partnership Group and the KP Board of Directors. After this, local bargaining will begin. After local bargaining is concluded, union members will vote to accept or reject the national and local tentative agreements as one package.
National bargaining set to begin
National bargaining between Kaiser Permanente and the Coalition of Kaiser Permanente Unions opens April 6 in Oakland, Calif. The talks will use the distinctive interest-based bargaining process that guided negotiations in 2000 and 2005. The new National Agreement will serve as both a union contract for 96,000 union Coalition-represented employees; and a full expression of the longest, most complex and longest lasting labor management partnership (LMP in US history. The LMP guides the working relationships among employees, managers and supervisors, and physicians to achieve the best quality, service, and affordability while sustaining the best place to work.
With a new decade just beginning, our nation faces unprecedented economic challenges and stands at the cusp of historic health care reform. It is against this backdrop that Kaiser Permanente and the Coalition of Kaiser Permanente Unions enter into bargaining a new National Agreement.
We stand on the strong foundation of our 2005 National Agreement. We now have the opportunity to build on that foundation, focusing on improving performance so we can fulfill our historic social mission to our patients and communities.
“We look forward to working with our management and physician partners to keep Kaiser Permanente the leader in health care for this country,” said John August, executive director, Coalition of Kaiser Permanente Unions. “With the passage of health care reform, the need for high quality, affordable health care has never been greater, and our world-class workforce is very proud to be a leader in mission-based, nonprofit health care, and in the commitment, innovation and performance improvements that union workers bring to the job every day.”
At Kaiser Permanente, the unions, management and physicians negotiate about traditional issues such as wages and benefits. But what makes our organization, and our Labor Management Partnership, unique is that we also bargain about topics such as workforce development, service quality, work-life balance, and healthy workforce. Indeed, the cornerstone of our 2005 National Agreement was a bold commitment to create and nurture unit-based teams throughout the organization. Today, barely five years later, there are hundreds of frontline teams in every region improving performance so we can be the best place to work and to give care at an affordable price.
As we begin bargaining this year, we will focus on how to grow and sustain this revolution in the health care workforce.
What we bargain is important, but so is how we bargain. We use an interest-based approach that focuses our attention on shared interests and strives to avoid many of the pitfalls of traditional, adversarial bargaining. In our experience, this approach helps us arrive at sometimes innovative solutions that best address everyone’s needs and builds the enduring trust we all need to deliver high-quality health care.
The members of the Common Issues Committee (CIC) will kick off bargaining April 6-8 in Oakland. More than 70 managers, workers and physicians will serve on the CIC, with many KP and frontline union members observing the process.
We have scheduled four more three-day bargaining sessions and aim to complete national bargaining by the middle of June. After that, union delegates will meet to review the tentative agreement and decide whether to endorse it. Ratification by Kaiser Permanente’s Board of Directors would occur shortly after. Local unions will then bargain issues unique to their members, and then local union members would vote on the national and local agreements. The new National Agreement would take effect October 1, 2010.
As we approach bargaining this year, we are humbled by the knowledge that we are not merely negotiating a labor agreement that affects almost 100,000 jobs and a large part of our economy. We are also continuing to build and strengthen a historic Labor Management Partnership that is transforming health care, transforming our workplaces and creating a legacy for the future of both.
“Our Labor Management Partnership provides a strong foundation for successful bargaining, and enables the organization and our workforce to position Kaiser Permanente as the model for health care delivery in a time of great change, challenge and opportunity,” said Chuck Columbus, SVP, Kaiser Permanente National Labor Relations. “We pledge to keep our colleagues informed about the process as it unfolds.”