Unions Threaten Strike Against Kaiser Permanente

By Bernard J. Wolfson, KFF Health News

Kaiser Permanente and union representatives pledged to continue negotiating a new contract up until the last minute as the threat of the nation’s latest large-scale strike looms next month.

Unless a deal is struck, more than 75,000 health workers will walk out for three days from Oct. 4-7, disrupting care for KP patients in California, Colorado, Oregon, Virginia, Washington, and Washington, D.C. The unions represent a wide range of KP health workers, including lab technicians, phlebotomists, pharmacists, optometrists, social workers, orderlies, and support staff.

A strike, if it occurs, would affect most of Kaiser Permanente’s 39 hospitals and 622 medical offices across the U.S., and would disrupt care for many of its nearly 13 million patients. If workers walk off their jobs, “it will start to impact patient care right away,” said John August, director of health care and partner programs at Cornell University’s Scheinman Institute on Conflict Resolution, who is a former head of the union coalition currently negotiating with KP.

“You are immediately subject to problems with not being able to get patients in and out of the hospital. You risk problems with infection control. You’re not going to get meals,” August said.

Arlene Peasnall, Kaiser Permanente’s senior vice president for human resources, said the Oakland, California-based health care giant’s goal is “to reach a mutually beneficial agreement before any work stoppage occurs.” But she also said the nonprofit has plans in place to blunt the impact of a walkout.

“We will be bargaining with Kaiser up until the day we go on strike,” said Caroline Lucas, executive director of the Coalition of Kaiser Permanente Unions, which represents about 40% of KP’s workforce. “Our front-line health care workers are fed up, and we really need Kaiser executives to seize the initiative and move forward on resolving the contract.”

The current contract expires Sept. 30 and, after months of talks, the two sides still disagree over pay and staffing. The coalition wants a $25-an-hour minimum wage across the company. KP executives agree there should be an organization-wide floor, but they’ve proposed $21.

KP prefers varying wage increases across regions, since the cost of living can vary sharply. The coalition, which is pushing for uniform wage increases across all regions, contends that management’s proposal is part of a “divide-and-conquer strategy.” Peasnall said the union’s stance “would prevent us from addressing fair market wages where we need to pay more to attract and retain the best people.”

The unions say their lowest-paid workers can barely make ends meet in the face of soaring prices for food, gasoline, and other essentials. And, they say, KP hospitals and clinics are severely understaffed, forcing workers to put in long hours and fill multiple roles. They argue that management is not moving quickly enough to fill positions and that the quality of care has suffered as patients, some with serious illnesses, often wait months for appointments, face extremely long waits in the emergency room, and experience delays in hospital admissions.

Healthcare Labor Shortage

An industrywide labor shortage hangs heavily over the contract talks. The pandemic was particularly brutal for health care workers who often worked long hours in grueling conditions, as colleagues fell ill, died, or quit. Workers say many of the positions that became vacant during the pandemic still have not been filled.

Miriam De La Paz, a secretary in the labor and delivery department of KP’s Downey Medical Center in Southern California and a union steward, said when she is alone on a shift, she is responsible for two labor and delivery stations as well as triage, where patients are prioritized based on the acuity of their cases.

“Imagine if I’m putting this baby in the system and your wife shows up in pain, crying, but I’m not there to register her,” De La Paz said. “I can’t break myself in two.”

Unions want KP to invest more in education, training, and recruitment to fill current openings and create a pipeline of future workers. KP says it is doing so.

Peasnall said KP has already filled more than 9,700 out of 10,000 new coalition-represented jobs the two sides had agreed to create this year. And she said KP’s turnover rate is one-third the industry rate, in part because of “excellent pay and benefits.”

Earlier this month, California lawmakers passed legislation to gradually raise the minimum wage for health care workers in the state to $25 an hour. If Democratic Gov. Gavin Newsom signs the bill into law, KP will have to comply. And nearly 80% of workers represented by the coalition in the current contract talks are in California.

On Sept. 22, as bargaining continued in San Francisco, the unions announced that more than 75,000 of the 85,000 workers they represent would stage the three-day walkout if there’s no deal. Federal law requires 10 days’ notice of strikes at health care facilities. The coalition said it is “prepared to engage in another longer, stronger strike in November,” if no agreement is reached by then.

A coalition spokesperson, Betsy Twitchell, said workers would welcome the Biden administration’s involvement in the talks “because of the importance of these negotiations to millions of patients and 75,000 frontline healthcare workers.”

The unions say KP can afford to be more generous, citing its robust financial health.

Although KP reported a net loss of almost $4.5 billion in 2022, it generated a cumulative net income of nearly $22 billion over the three preceding years — both results driven largely by investment performance. In the first half of this year, KP posted profits of over $3 billion. And it is in a strong position to manage its debt, according to a report earlier this year by Fitch Ratings.

The unions note that Kaiser Permanente’s CEO, Greg Adams, received almost $16 million in compensation in 2021 and that dozens of others in KP management made more than $1 million, according to a KP filing with the IRS.

Peasnall said the compensation of KP’s senior management is less than that of their peers at other health care companies.

A KP walkout would be the latest in a string of worker movements. Strikes have hit Hollywood, hotels, auto manufacturers, and other industries. Public approval of unions is at a nearly 60-year high, according to a Gallup Poll released in August 2022.

Health workers are increasingly engaged, too. Several hospital groups have been hit by strikes, including Cedars-Sinai Medical Center in Los Angeles and numerous facilities belonging to Sutter Health in Northern California, as well as health care organizations in other states.

“There is an atmosphere in the country: It’s labor summer, it’s strike summer, it’s all that,” August said. “That definitely has an influence on union leadership that says, ‘We need to be a part of that.’”

KFF Health News is a national newsroom that produces in-depth journalism about health issues.  

Kaiser Permanente’s Expansion Faces Skepticism

By Harris Meyer, KFF Health News

As regulators review Kaiser Permanente’s proposed acquisition of a respected health system based in Pennsylvania, health care experts are still puzzling over how the surprise deal, announced in April, could fulfill the managed care giant’s promise of improving care and reducing costs for patients, including in its home state of California.

KP said it would acquire Danville, Pennsylvania-based Geisinger — which has 10 hospitals, 1,700 employed physicians, and a 600,000-member health plan in three states — as the first step in the creation of a new national health care organization called Risant Health. Oakland-based Kaiser Permanente said it expects to invest $5 billion in Risant over the next five years, and to add as many as six more nonprofit health systems during that period.

Industry experts believe KP’s aim is to build a big enough presence across the country to effectively compete with players like Amazon, Aetna CVS Health, Walmart Health, and UnitedHealth Group in providing health care for large corporate customers. Kaiser Permanente executives touted the potential for spreading the group’s vaunted brand of quality, lower-cost care around the country.

But it’s not clear how KP will be able to bring its model, in which facilities and doctors receive a monthly per-member fee for all care, to markets where it doesn’t own an integrated system of physicians, hospitals, and health plans, as it does in California. Critics note that KP’s efforts to expand failed in a number of states in the 1980s and 1990s.

In addition, the physician-led Permanente Medical Groups, which lead KP’s patient care, were not involved in the Risant deal, raising questions about how their expertise would be shared.

“I don’t know how Kaiser will bring its knowledge and best practices to improve health care delivery without the involvement of the medical group, which does all the care delivery,” said Robert Pearl, a former CEO of the Permanente Medical Group who’s now a lecturer at the Stanford Graduate School of Business.

Is Bigger Better?

There are also questions about how the expansion will benefit current KP customers. The tax-exempt, nonprofit organization has 39 hospitals, 24,000 physicians, and 12.7 million health plan members in eight states and Washington, D.C., though about three-quarters of its members are in California, where it controls nearly half of the private insurance market. KP reported $95 billion in revenue last year.

“We’ve asked Kaiser Permanente management questions about the deal’s advantages to employees and customers, but we haven’t heard back,” said Caroline Lucas, the executive director of the Coalition of Kaiser Permanente Unions, several of which are in contentious contract talks with the company. “Where is the money coming from? Are the citizens of California and other states subsidizing this expansion? How are they benefiting?”

Kaiser Permanente CEO Greg Adams declined to comment. A KP spokesperson, Steve Shivinsky, said the group’s physicians would be involved in developing a “platform” to offer other health systems its value-based care expertise, including in design of care models, pharmacy practices, consumer digital engagement, development of health insurance products, and best practices for supply chains. Shivinsky said work on the platform was just beginning.

“Risant Health’s success will firmly establish value-based care as a better model for health care in this country,” said Shivinsky, KP’s director of national media relations.

“If there is a commitment to truly delivering higher-quality and lower-cost care, it will take time and hard work,” said John Toussaint, chair of Catalysis, a nonprofit that trains executives in health care and other industries in quality improvement. “But frankly I’m skeptical that’s the reason for these types of mergers. Bigger may be better for increasing prices, but not necessarily for improving care.”

The deal may be a sign that KP, founded in 1945, is hearing the alluring call of lucrative fee-for-service medicine. “This gets Kaiser into the much bigger part of the market — commercial insurance — and expands beyond their traditional model of owning all the pieces and selling their own insurance,” said Glenn Melnick, a health economics professor at the University of Southern California.

The Geisinger acquisition is being reviewed by the Pennsylvania Insurance Department, with a 30-day public comment period ending Aug. 7, 2023. The Federal Trade Commission and the California attorney general’s office declined to say whether they were reviewing the deal. KP expects the deal to close sometime in 2024. There was no purchase price, but KP said Risant would make a minimum of $2 billion available to Geisinger through 2028, including income that Geisinger generates itself.

Federal and state antitrust regulators have expressed growing concern about consolidation of hospitals and physician groups into ever-larger organizations with the power to drive up prices. But antitrust experts say it’s unlikely regulators will challenge the deal since KP does not currently have a presence in Pennsylvania, Delaware, or Maine, where Geisinger operates.

Indeed, the deal could boost competition if KP’s investment enables Geisinger to expand beyond central and eastern Pennsylvania and take on the University of Pittsburgh Medical Center and Highmark, the state’s two dominant integrated health systems.

Around the country, Risant could be appealing to businesses that offer health plans to their employees.

“If Kaiser can become an effective player in more markets through Risant and that leads to greater price competition, that will be very attractive to large employers,” said Bill Kramer, senior adviser for health policy at the Purchaser Business Group on Health, which represents large employer health plans.

Smaller health systems and physician groups that are struggling financially may also see joining Risant as a more palatable option than being acquired by more profit-hungry entities, such as private equity firms, Melnick noted.

Through tight coordination between its physicians, hospitals, and health plans, KP has a strong track record of producing good health outcomes, particularly for plan members with chronic conditions such as high blood pressure and diabetes. In recent years, Kaiser doctors have also significantly reduced opioid prescribing.

KP hospitals and doctors are paid a monthly per-member fee for all care — called capitated payment. That gives KP a powerful financial incentive to keep members healthy and prevent costly hospital admissions and emergency room visits.

In contrast, Geisinger and most other health systems across the country generally are paid for each separate procedure — known as fee-for-service payment — giving them less incentive to keep patients healthy and reduce overall costs. Because of that, it’s not clear how KP’s value-based care model will work at Geisinger and other health systems acquired through Risant.

Adams has said Risant won’t try to fully replicate Kaiser Permanente’s model. Instead, Risant will help other health systems achieve the same kind of outcomes and cost savings while working with multiple insurers and providers.

KP also could potentially learn lessons from Geisinger and other health systems about producing better health outcomes at lower cost for members. Geisinger has won acclaim for its ProvenCare model, in which it accepts a fixed fee for providing an entire episode of care, such as heart bypass surgery, with no extra charge if the outcome isn’t satisfactory and the patient needs additional care.

But Kramer, a former KP executive, is skeptical. “It’s hard if not impossible to transform a medical group that’s reliant on fee-for-service payment into something like the Kaiser Permanente Medical Group,” he said.

Critics of the deal, citing KP’s failed expansion moves in the 1980s and 1990s, also worry that building Risant Health could distract KP executives from cost-control and quality improvement efforts in their home state and draw down the organization’s financial reserves, potentially leading to premium hikes.

In 1999, for example, KP sold a money-losing medical group it had established in North Carolina in the mid-’80s. It faced opposition from the local medical community and challenges with employer health plans, among other factors. Kramer also pointed to its withdrawal from other markets including Connecticut, Missouri, Ohio, and Texas.

Still, KP did succeed in establishing a significant presence in the mid-Atlantic states, Washington, D.C., and Georgia, though it doesn’t own hospitals in those markets. It also has long-standing operations in Hawaii, Colorado, and Oregon.

With Risant, KP will be up against very large, sophisticated managed care competitors including UnitedHealth’s Optum, which employs about 70,000 physicians across the country.

“Hopefully Kaiser’s senior leadership will be smarter this time around and avoid the kinds of problems they had when they expanded in the past,” Kramer said.

KFF Health News is a national newsroom that produces in-depth journalism about health issues. It is not affiliated with Kaiser Permanente.

Kaiser Permanente Prescribing Fewer, Cheaper Opioids

By Pat Anson, Editor

One of the largest medical organizations in California has significantly reduced high dose opioid prescribing for its patients and shifted many of them to generic opioids, according to the results of a new study by Kaiser Permanente of Southern California.

“You can treat pain differently without putting people on high doses of opioids,” said co-author Michael Kanter, MD, an executive with the Southern California Permanente Medical Group. “There is no proven benefit of long term opioid therapy.”

Researchers looked at prescription data for over 3 million Kaiser Permanente patients in southern California from 2010 to 2015, and found a 30 percent reduction in high dose opioid prescribing, along with a major decline in the prescribing of brand name opioids.

The medical group instituted system wide policies in 2010 that promoted safer prescribing and encouraged its 6,600 physicians to prescribe lower doses using cheaper, generic opioids.

The change in policy resulted in far fewer prescriptions being written for OxyContin, Opana, and brand name hydrocodone, oxycodone and codeine products. OxyContin was the first painkiller to have abuse deterrent properties, while Opana is being taken off the market because of concerns it is being abused.  Both are more expensive than generic opioids.

“This study adds promising results that a comprehensive system-level strategy has the ability to positively affect opioid prescribing,” Kanter and his colleagues wrote in the Journal of Evaluation in Clinical Practice.

Like other studies of its kind, however, the report did not assess whether there was any improvement in patient pain, function and quality of life, nor did it assess the impact of alternative pain therapies and treatments that were prescribed in lieu of opioids. Also unknown is whether the medical group’s policies resulted in fewer overdoses or cases of opioid misuse and addiction.

“But we did note that, generally speaking, patients were satisfied with the process that they went through,” said Kanter, adding that a subsequent research paper will be published on patient satisfaction.

Kanter told PNN that many pain patients take opioids long-term because of “therapeutic inertia” on the part of prescribers.

“We do know that some patients are just started on opioids for chronic pain, (their) doses may be increased over time, and they may be actually doing quite well pain-wise, but nobody takes the time to titrate their dose down and deescalate, and so a lot of the patients we think were just on too high of a dose for no real good reason,” Kanter explained. “Some of the patients, if not many, we think did just as well on lower doses.”

Several other medical groups and insurance companies have taken steps to reduce opioid prescribing, but the results so far have been mixed in terms of preventing overdoses.

As PNN has reported, opioid prescribing fell by 15 percent for members of Blue Cross Blue Shield of Massachusetts after the state's largest insurer adopted policies in 2012 that discourage the dispensing of opioid medication. The new policies failed to slow the growing number of opioid overdose deaths in Massachusetts, which more than doubled. Many of those deaths were not due to painkillers, but linked to heroin and illicit fentanyl.

Blue Shield of California says its Narcotic Safety Initiative has resulted in an 11% reduction in members using high dose opioids and prevented 25% of all new opioid users from using the drugs for more than 90 days.  

Like the Kaiser Permanente study, the Blue Cross Blue Shield initiatives in California and Massachusetts did not assess the impact on patient pain, function and quality of life after opioid prescribing was lowered.

The opioid overdose death rate in California is 4.9 deaths per 100,000 people, less than half the national average. From 2014 to 2015, the opioid overdose rate in California declined by 2 percent, while the national average rose by 16 percent. Click here to see trends in your state.

Pain Patients Say Insurers Interfering with Treatment

By Pat Anson, Editor

It’s no secret that health insurance companies have been raising deductibles and co-pays, and generally making it harder for chronic pain patients to get treatment – whether it’s opioid pain medication or alternative therapy like massage or acupuncture.

But recent actions by some insurers have healthcare providers and patients saying the insurance industry has gone too far in its effort to reduce opioid abuse and is interfering with the doctor-patient relationship.

“My own insurance company just acted as a physician to remove the meds that I need by blackmailing a kind-hearted pain doctor,” says Jennifer Nelson, who has suffered from Reflex Sympathetic Dystrophy (RSD) in her left foot for nearly two decades.

The “blackmail” Nelson refers to is a form letter her pain management doctor received from Blue Cross/Blue Shield of Michigan warning that opioids, benzodiazepines and a muscle relaxant named Soma (carisoprodol) should not be prescribed together. Benzodiazepines such as Valium act as sedatives and are known to increase the risk of overdose when taken with opioids.

But Nelson says she’s used them safely for years to reduce pain, muscle spasms and to help her sleep.   

“Their threat is to pull their coverage from his office if even one patient tests positive for both opioids and benzodiazepines. So now my health insurance has become Big Brother?” said Nelson in an email to Pain News Network. She also included a copy of the form letter sent to her physician.

JENNIFER NELSON

“There is no legitimate medical indication for this combination of controlled substances,” the letter from Blue Cross/Blue Shield (BCBS) says. “If the diagnosis is opioid abuse or dependence, the continued use of sedatives is contradicted and the continued use of opioid analgesics is against DEA regulations. If the diagnosis is legitimately chronic pain, benzodiazepines are still contradicted as they lead to a downward spiral of pain control and function.”   

The only downward spiral Nelson feels is from having her Valium tapered.

“The muscle spasms came back with a vengeance,” she says. “The second night I woke up and I thought someone was pulling my leg off.”

 “I am very concerned that an insurance company states there is ‘no legitimate medical indication’ for the combination of opioids, benzo's and Soma,” says Lynn Webster, MD, past president of the American Academy of Pain Medicine.

“No (insurance) payer nor the DEA should be making this type of dogmatic statement.  Such a statement will be used by the DEA to prosecute any provider who prescribes this combination.  It is inappropriate for either a payer or the DEA to determine what a legitimate medical indication is for any single or combination of drugs prescribed.”  

Webster agrees that combining benzodiazepines with opioids is risky, but says Blue Cross/Blue Shield went too far.

“What is most lacking from the letter is an alternative.  BCBS has a responsibility to offer alternatives to the providers on how to treat anxiety in people who also have pain and or opioid addiction and anxiety,” Webster wrote in an email to PNN.

“I agree the combination of opioids and benzos and other CNS depressants should be avoided, but if the payer wants to practice medicine then they should make it clear that they will pay for cognitive therapy and other alternatives as long as it is needed or pay for other medications that are not as risky as benzos. It is unacceptable to just abandon people with pain, anxiety and/or addiction.”

Aetna “Super Prescribers” Warned  

The insurance company Aetna sent a similar letter to nearly 1,000 physicians in August, warning them about their opioid prescribing habits. The doctors were identified as “super prescribers” by Aetna after a review of insurance claims.

"You have been identified as falling within the top 1 percent of opioid prescribers within your specialty," the letter states.

Aetna’s chief medical officer told The Washington Post the letter was not meant as a threat, but merely a note of caution.

"We're asking you to look at your practice...and identify if the way you're prescribing narcotics is best practice," said Harold Paz, MD. "And if it's not, here's an opportunity to improve."

Kaiser Permanente – an HMO -- is also urging doctors in its network to reduce opioid dosages to those recommended by the Centers for Disease Control and Prevention. The CDC’s guidelines say prescribers “should avoid increasing dosage” over 90 mg of morphine equivalent units a day.

“That dose does nothing for me,” says Scott Michaels, who at age 55 is permanently disabled by severe back pain, arthritis and other chronic illnesses.

Michaels has a genetic condition that causes him to metabolize opioids quickly. For seven years, he’s been taking a daily opioid dose of 330 mg of morphine equivalent units – nearly four times what CDC and Kaiser Permanente recommend as a ceiling.

“I have a terrible metabolism so the medication goes right through me, hence the high dose. As of last month, Kaiser is reducing me 10% a month until I’m at 90 mg. I have no choice they said. The pain is already coming back and they don’t care,” said Michaels, who asked that we not use his real name.

“Kaiser is an insurance company and provider. To me that is a conflict of interest. I just don’t know what to do. It can’t be legal to withhold medication that has proven for me to work.”

Jennifer Nelson was also on a high dose of opioids that is now being reduced by her doctor to reach the levels recommended by the CDC. She says her health has deteriorated significantly and she’s worried about become bedridden.

“I lived a very high functioning life. My biggest fear is my seven year old not having a Mom to walk him to the bus stop," Nelson says. “Nineteen years and I've never overdosed or used my meds incorrectly. I submit to random urine tests and pill counts, and educated myself on my meds. So what do we do? Can insurance companies legally threaten doctors like that? And why are they quoting CDC guidelines when doing so? I'm infuriated. Exhausted, unable to sleep, gritting my teeth in pain, but infuriated.”

Insurers say their efforts to wean patients off high doses of opioids are producing results. Blue Cross/Blue Shield of California says its Narcotic Safety Initiative has resulted in an 11% reduction in members using the very highest doses and “prevented” 25% of all new opioid users from using the drugs for more than 90 days.  

Will these new policies also reduce the number of people dying from opioid overdoses?

Blue Cross/Blue Shield of Massachusetts – one of the first insurers to adopt tougher prescribing policies – says it has reduced the dispensing of opioids to its members by 15 percent since 2012.    But the new policies failed to slow the growing number of opioid overdose deaths in Massachusetts, which more than doubled.