By Tim Redmond
NOVEMBER 17, 2014 – The two-day strike by nurses at Kaiser attracted a fair amount of news coverage – and forced the health-care giant to take out big, expensive newspaper ads presenting its side of the story.
But there hasn’t been much attention to the fascinating aspect of the Kaiser labor struggle: The outfit the nurses are fighting portrays itself as a nonprofit – a tax-exempt organization created for a public benefit. But its finances, and its operations, are much more like a big for-profit corporation.
In fact, Kaiser reports its operating revenue with the same types of language we hear from traditional corporations. And while small nonprofits can argue that they lack the money to provide good wages and benefits to workers, Kaiser is literally awash in cash.
More: The nurses aren’t even asking for a raise. They just want to keep their existing pay and benefits – and they want new rules to provide better staffing levels for patient safety.
And the head of the Kaiser doctors has made it clear that he doesn’t think management can reach a deal with the nurses and is planning for a strike later this year or in early 2015.
Kaiser isn’t one entity; it’s a conglomeration of for-profit and nonprofit corporations that include a venture-capital arm and a separate insurance arm. Kaiser Foundation Hospitals and Kaiser Foundation Health Plans are nonprofits that run the hospitals and handle the health-insurance payments. Then there are the Permanente Medical Groups, owned by doctors, that have exclusive contracts to provide medical services to the hospitals.
So the doctors who work at Kaiser typically aren’t employees of KFH or KFHP – but the nurses are.
Kaiser’s a big, big operation – and getting bigger. As a nonprofit, KFPH has to file a federal Form 990 with the Internal Revenue Service listing its revenue, expenses, top employees, directors, and lots of other information. The most recent one on file with the Foundation Center, which tracks this stuff, is 2012, and you can see it here.
Among other things, the 2012 document shows $39.9 billion in revenue and $565 million in what a normal corporation would call “profits” – that is, money left over after all the expenses are paid.
Kaiser, of course, pays no taxes on that money.
The 990 form shows how much money the senior executives make, and they aren’t missing any meals: Board members, who work only a few hours a week, made around $240,000 a year. The CEO, George Halvorson, made $9 million.
And that was before the Affordable Care Act came into the picture.
With the ACA requiring all Americans to have health insurance, Kaiser has seen a huge windfall – 30,000 new members in just 2013. That was a banner year, the organization says, with total combined revenues of $53 billion and operating income (that’s “profit” by another name) of $1.8 billion.
In a glowing Feb. 14, 2014 press release, Kaiser extols its financial health and stability:
“In 2013, we maintained a consistent operating income as a percent of revenue; it is at a level that allows us to continue making investments in the facilities, technology and care advances that meet the needs of our members, customers and communities,” said Chief Financial Officer and Executive Vice President Kathy Lancaster.
But that’s not what employees are hearing. “We were all taken out to a big meeting and told that we are ‘in turbulent times’ and that we have to be more competitive,” Rebecca Goldfader, a nurse practitioner, told me.
In fact, she said, management told her and others that they have to see even more patients every day. Under normal rules, she gets only 15 minutes per patient – “and they told us to squeeze in one more every morning and afternoon.”
The union isn’t asking for more money. The proposals the nurses put forward – there are 39 of them – are all about patient care and staffing. And despite the media coverage, it’s not all about Ebola.
“These came after extensive interviews with nurses,” Goldfader said. “They are areas where there was a need for more staffing, more time.
“We are understaffed,” she said. “Nurses come in for extra shifts every day.”
Kaiser insists that it is bargaining in good faith and trying to reach an agreement. In a press statement, the organization says that
“We believe, and our nurses know, that Kaiser Permanente is one of the best-staffed health care systems in California and the nation. Our nurse staffing always meets, and often exceeds, state-required levels.”
But “staffing” could mean nurses working extra shifts and overtime – which Goldfader says isn’t the best for patient care. “The patients lose completely,” shge told me.
Kaiser says it has “responded to” every one of the union demands. But that doesn’t mean the organization has accepted or made any efforts to work with those demands. “No” is also a response.
In a remarkable, stunning set of statements, Dr. Robert Pearl, the head of the Permanente Medical Group, insists that everything is peachy, that people are joining Kaiser in droves – and that the only problem is that the nurses are going to go on strike and there’s no way to resolve the labor issue.
“There are all these new patients from the ACA,” Goldfader says. “Nurses and nurse practitioners are asking for more than 15 minutes to see them.”
And it seems pretty clear that Kaiser has the money to do that.