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Kaiser Permanente's Profits Up 300% in 2019

Kaiser Permanente Profits

Coworkers at KP, do you remember when we approved a new agreement late last year that doubled our prescription co-pays (potentially quadrupling them by the final year of the contract), provides minimal wage increases, contains no improvements to employee's scheduling, has no improvements to shift differential pay, and no improvements to pay for on-call employees who don't receive benefits, and affords no additional job security for the majority of employees, because our union leaders insisted it was a good deal? Here's why I voted "No"...

As reported by MedCity News, "Kaiser Permanente reported a net income of $7.4 billion in 2019, nearly triple what the company made in 2018 and significantly higher than its past surpluses. The nonprofit health plan chalked up the sharp increase to a strong investment market.

Nonprofit health giant Kaiser Permanente saw its bottom line nearly triple last year. The Oakland-based managed care organization reported a net income of $7.4 billion, a significant jump from its 2018 net income of $2.5 billion, according to its annual financial report."

Prior to voting on whether to ratify our Tentative Agreement, I wrote two posts on O.P.E.I.U. Local 30's Facebook page describing my primary concerns with the offer (union leadership never responded):


These are some of my concerns regarding the union's summary of the Tentative Agreement (please address any details that may not be correct)...

Workforce of the Future:

"The work experience requirement for any of us seeking promotion at Kaiser will now be waived. This means no more getting a license or certification and having to leave Kaiser to get the experience." This is an excellent, new benefit which benefits us employees and KP. Up until now, KP has often required current employees who have earned certifications and/or licenses to have a stated number of months experience of work experience in the new position for which they were otherwise trained and qualified to perform. This meant, employees couldn't simply transfer into the new position. In many cases it meant that they needed to leave KP in order to gain the required 6 months, 12 months, etc., experience. There are obvious downsides of this policy for employees -such as having to secure new employment- but there are also downsides for KP. After assisting them with their education costs, the organization lost -sometimes permanently- employees who were basically forced to leave their current position in order to gain the experience time that KP required. But here's the bad part, "We will be at a lower training wage for the same number of years as the experience requirement was.." Eliminating KP's unnecessary work experience requirement makes sense, but employees will not be 'training'. They will be transferring into positions for which they are already licensed and/or certificated so their compensation should not be less than their coworkers.

Pharmacy Prescriptions:

In-person Pharmacy Prescription REFILLS that are available via mail order will double to $10 (a 100% increase) on 01/2021. They will go up to $15 (a 300% increase) on 01/2022 unless we meet a 30% mail order usage for refills. They'll go up again to $20 (a 400% increase) on 01/2023 unless we meet a 40% mail order usage for refills. Last year KP made $2.5 Billion in profit and, in just the first quarter of this year, $3 Billion in net income -a new record. That doesn't sound like there's a financial need for them to quadruple our pharmacy co-pays.


"Our wage rates stay the same. Wage rate for new hires stay the same there will NOT be a wage cut of 15% to wages for future Kaiser workers." We should never have been entertaining the idea of wage cuts. Negotiations should be based on what 'is' today, not what is just one possibility of what 'may be' in the future. If KP's financial situation were to significantly change in the future -either for better or for worse-, either side could request that the other consider re-opening wage discussions. "Across the board raises of 3% every year for the next four years." The union did make progress by securing the potential for the same percentage wage increases for all regions, including the Regions Outside California. However, something to consider is that, during our previous contract, before KP experienced their record-breaking financial performances, we received some 3% increases and a 4%. So why shouldn't our contract have raises that are at least as good as those in our previous contract?


"Our pensions, our retiree medical coverage, and all other retirement benefits stay the same. All retirement benefits for new hires stay the same - no shift from pensions to risky 401(k) plans, no cuts to retiree medical coverage." -This is good. But we didn't "win" anything here. We would be getting to keep these things that we already had secured, long ago, in previous contracts. For KP MGMNT to PREDICT that we MAY have challenging times ahead is no justification for our retirement security to be undermined, especially when, for the last few years, KP has made record profits.

Job Security:

"Subcontracting: Kaiser cannot replace OPEIU Local 30 members with subcontractors to do work at any Kaiser facility (Hospital, Clinic, MOB, etc.). This protects MOST of our jobs..." (emphasis added). -Which jobs are we willing to potentially sacrifice? Any agreement should protect ALL our jobs. "Outsourcing: In addition, we won extra protection FOR CERTAIN WORK that could potentially be moved out of KP facilities.." (emphasis added). -Any agreement should protect ALL OUR WORK.


The membership turnout for the vote to authorize our bargaining committee to call a strike was phenomenal. It is amazing how the membership came together at such an important time and supported the C.K.P.U.and Local 30 in negotiations and I truly appreciate all the work the bargaining team has done.

I was really excited to hear about the tentative agreement when it was first announced. Based on what's been shared so far, it seems like we were largely successful on some issues such as getting Management to back away from their initial takeaway demands in the areas of our retirements and healthcare costs. It seems that they've now agreed to no changes to current employees' or to new hires' pensions and no increases to office visit co-pays. On the issue of money, the 3% annual wage increases, while they may be more than what the breakaway Alliance unions received, are still very average increases at a time that KP is experiencing extreme financial success. And what happened with the union's endeavors to increase the pay for On Call employees who receive just .70 per hour in lieu of benefits? And what of the plans to increase the evening differential and longevity pay? These haven't been increased in decades and should be based on percentages of employee's pay, not a set number of cents.

I think it seems like this tentative agreement felt more like a victory initially because KP Management began negotiations by demanding such unfounded draconian cuts and takeaways. But the offer we now have seems more or less like we 'won' not losing the healthcare and retirement that we already had, we 'won' not losing wages for new employees, and we 'won' the same job security protections for most employees that recently permitted KP to outsource a pharmacy distribution warehouse and a bunch of jobs.

The Coalition states that the tentative agreement "Completely bans subcontracting of jobs at our facilities and strengthens protections against outsourcing". But when KP Management describes the tentative agreement, they write that we agreed "to a list of jobs that will not be outsourced or subcontracted.." This inherently means that there is a list of jobs that MAY be outsourced or subcontracted. Can someone please clarify if my understanding of this is wrong? Otherwise, based on this one issue, of whether all employees in all jobs should have job security, and the fundamental principal of unionism at its roots "An Injury to One is an Injury to All", I'm prepared to vote no.

I'm sure there will be more than sufficient support for this tentative agreement to be approved by the membership, if it's recommended by the Local 30 Bargaining Committee. But the membership is more engaged and united than it has been in a long long time, the momentum is on our side and it think if we settle now, we'll be stopping short. In back-to-back record profit years, $3.1 Billion in just the first quarter of this year, is it too much to expect an agreement with our employer that, at the very least, secures all our jobs

Read More About KP's Record Net Income in 2019