Addressing the Coalition’s strike authorization announcement

The union wrongly claims increases in health care costs are not tied to improvements to care. In fact, health care costs are increasing because of increased needs and delayed care in the wake of the pandemic, major increases in costs for drugs and supplies, and increased labor costs because of worker shortages and wage increases. Wages make up more than half of the cost of health care in the U.S. Kaiser Permanente is not immune to these inflationary pressures.

The union claims Kaiser Permanente is “slashing performance bonuses,” when in fact the opposite is true: We are proposing a minimum payment level to protect our employees from receiving no payout. Kaiser Permanente offers nearly all its employees an annual performance bonus that is based on organizational performance on quality and patient safety, financial performance, and supporting our communities, among other factors. In several of the past few years, the performance payout would have been eliminated for many employees, because the organization did not meet its financial goals. (During the pandemic, we actually provided employees with significant rewards each year out of recognition for all their dedicated work, for a total of $276 million in payments to Coalition-represented employees over the past 3 years. And this is in addition to the $800 million in employee assistance we provided our front-line employees to ensure they had access to alternate housing options, special child care grants, and additional paid leave for COVID-19 illness and exposure.) We are proposing putting in a minimum payment level to reduce the chance of that happening again in the future. The union is demanding the program just be turned into a guaranteed payout, regardless of performance, which would defeat the purpose of the program and just make it a part of the wage total. 

Because Kaiser Permanente pays at or above market compensation, our costs for flexing our workforce as needed are higher than other health care organizations, which hurts our ability to keep costs affordable for our members and customers. We have asked the Coalition to work with us on ways to increase our ability to be more nimble and affordable when bringing on staff in specific circumstances.

The union claims Kaiser Permanente is offering starting pay below the level of fast-food workers. In fact, we have proposed an enterprisewide minimum wage starting at $21 an hour, higher in some areas and roles. The union wants a $26 an hour minimum wage.

We are leaders in employee wages and benefits in every market we are in. In fact, our philosophy is to deliver compensation that provides wages above the local market (at or up to 10% above market) to attract and retain the best employees. Our very generous health care and retirement benefits add another 50% of value to the overall compensation package. We help our employees build long-term economic security with low-cost health insurance, industry-leading retirement plans, and other benefit programs to support employee health and well-being.

Rising prices are hurting everyone, and are driving up the cost of health care as well. Last week we made a proposal to the Coalition that includes across-the-board wage increases of between 10% and 14% over 4 years — with additional lump sum payments in Southern California — on top of wages that are in many cases already significantly above the market rate for similar jobs.

• In markets where our jobs have wages that don’t meet our philosophy of paying up to 10% above market, such as Northern California and Washington state, we have offered wage increases of 14% over 4 years.
  
  
• In Southern California, where our wages significantly exceed market levels, we are offering wage increases of 10% over 4 years plus lump sum bonuses of 4%, to keep our employees well compensated while reflecting the market-level wage difference.
  
  
• In markets outside of California and Washington where Coalition-represented employees are at or above the 10% threshold, we are offering wage increases of 11% over 4 years.

The union claims Kaiser Permanente is refusing to develop the workforce, or train and recruit new staff. This is not true. In California, we established a nonprofit organization in 2020, Futuro Health, jointly with SEIU-UHW, and provided $130 million in funding. Futuro’s goal is to provide education, and skills training and retraining for workers in health care, and more than 8,000 workers have enrolled in its programs in just the first 3 years.

Kaiser Permanente invests in workforce development directly and through contributions to trust funds managed in partnership with our labor partners, which provide tools and resources to help front-line employees gain new skills and advance in their careers. Resources provided include coaching, training, and apprenticeship programs; scholarships and tuition reimbursement for degree and certification programs; and computers and mobile hot spot devices for qualifying students. In 2022, Kaiser Permanente provided more than $75 million in funding to 3 education trusts, available to more than 135,000 employees. We also provided Kaiser Permanente employees with more than $30 million in tuition reimbursement in 2022, as part of our annual spending to create opportunities for career advancement and a workforce skilled at using technology in the rapidly changing health care field.

Kaiser Permanente and the Coalition agreed to work together to accelerate hiring this year, setting a joint goal in bargaining of hiring 10,000 new people for Coalition-represented jobs in 2023. Kaiser Permanente’s efforts to date have resulted in nearly 9,000 positions filled, and we are aggressively recruiting to fill more. About 96% of candidates for Coalition-represented positions accept our employment offers — significantly above the industry average. We believe this is because talented people recognize the value of our current wage and benefit offerings and want to work at Kaiser Permanente.