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.