Hospitals to bankroll much of SEIU pact

KaiserMay 23, 2014

Payers & Providers, May 22, 2014
California Edition

The California Hospital Association and its member institutions will furnish the vast majority of a $100 million fund to try and increase Medi-Cal provider payments, with the SEIU-UHW labor union’s ability to recruit tens of thousands of new members hinging on its success.

Under the terms of the pact announced earlier this month between the CHA and the Service Employees International Union-United Healthcare Workers, the state’s major hospital lobby would contribute $80 million toward the Medi-Cal initiative, with the union furnishing the remaining $20 million. Both sides would make two equal installment payments of $40 million and $10 million apiece by 2016.

The terms of the agreement were discussed in detail by SEIU-UHW President Dave Regan with his management staff during a May 6 conference call that took place not long after he and CHA President C. Duane Dauner told members of the media that all but the rough outlines of the pact were confidential. Payers & Providers was furnished with a recording of the 50-minute call.

Regan indicated that both the union and the CHA would have equal say on how the money is spent. Both sides have agreed to appoint a neutral arbitrator to settle any disputes, and the union reserved the right to take legal action as well.

According to Regan, the SEIU-UHW would also be allowed to make organizing

entreaties to 30,000 non-union hospital employees immediately. If improved funding for Medi-Cal is secured, the union would have a six-month window starting in November 2016 to organize another 30,000 employees at hospitals. The terms of that organizing effort would be negotiated in advance by both sides by January 2016.

If the recruitment efforts are successful, it could boost SEIU-UHW’s ranks by some 40%. It currently represents about 150,000 nurses, technical and custodial workers in California. Regan boasted that the deal is the “largest scale (pact) between a major industry and union at least in California that has ever taken place.”

A CHA spokesperson did not respond to several telephone and email requests seeking comment.

In lieu of the agreement with the CHA and its hospitals, the union agreed to drop two voter initiatives that would have capped how much hospitals could charge for care and how much they pay their top executives. Regan said that the SEIU-UHW had spent $5 million on the aborted initiatives, but that it paid off handsomely.

“For a $5 million investment, we get an $80 million turn to pursue those things,” Regan said. He observed that the CHA would have spent as much as $100 million to defeat the initiatives.

Regan, who did not respond to a request for an interview, told his team that boosting Medi-Cal payments to providers in California was the surest way to improve the position of his union, although he did not provide any specifics. Virtually all Medi-Cal payments flow directly to providers and not their employees.

“It will lift all boats – the consumer boat, the worker boat and the provider boat,” said SEIU-UHW spokesperson Steve Trossman.

The pact between the union and the CHA expires at the end of 2017, likely before providers begin receiving any increased MediCal payments should they be successful in obtaining them from the federal government.

The two sides also had agreed to a code of conduct that bars the participating hospitals from retaining any firms or individuals that specialize in anti-union tactics or dispensing any literature that criticizes dues or other facets of joining unions. The SEIU-UHW also agreed not to criticize the hospitals or CHA as part of its organizing efforts.

The code of conduct was termed a “gag order” by a rival union, the National Union of Healthcare Workers.

“The bottom line is the deal…gives away the appropriate balance of power between employers and healthcare workers’ unions,” said NUHW President Sal Rosselli.

Several significant providers did not sign on to the pact. Regan told his staff that Cedars-Sinai Medical Center, Prime Healthcare Services and Providence Health & Services have refused to comply.

Regan termed the three providers “outliers” and that the union was pondering its next move in response.

Providence, which operates six hospitals in Southern California, declined to participate because it already has a code of conduct in place, according to spokesperson Patricia Aidem. “We opt to have more communication and management,” she said. Although SEIU represents employees at five hospitals, it lost an election to represent non-nurse employees at Providence Holy Cross Medical Center in Mission Hills last year.

Prime Healthcare, a for-profit chain of hospitals, sued the SEIU-UHW in 2011, claiming it engaged in anti-competitive practices. A spokesperson declined to comment.

Cedars-Sinai issued a statement similar to Providence’s position: “We recently successfully negotiated Cedars-Sinai’s renewal contract with SEIU-UHW for the subset of our employees they represent, and that agreement includes its own code of conduct,” it said in part.