, Heritage writer
When the Permanente Health Plan was made available to West Coast members of the International Longshore and Warehouse Union in 1950, it was a classic example of “be careful what you wish for.”
The Permanente plan, robustly serving workers and families for Henry J. Kaiser’s home front industries, expanded to the public on July 21, 1945, less than a month before the end of World War II. It was a heady and challenging period, and labor unions were to become major group members of the postwar Permanente. Why? Because, for the first time, unions could negotiate health coverage.
The key legal ruling was the 1948 decision by the Seventh Circuit United States Court of Appeals in the case of Inland Steel Company vs the National Labor Relations Board. This precedent affirmed the legal obligation of employers in unionized companies to include health and welfare benefits as part of labor negotiations.
In 1950 The International Longshoremen and Warehouse Union and the Pacific Maritime Association requested the Permanente Health Plan provide care for all 22,500 of their workers up and down the West Coast; The ILWU became the first major group enrolled in the Health Plan.
At the insistence of ILWU leader Harry Bridges, Permanente was the only choice for the union members. This exclusivity violated Permanente policy that membership should be voluntary, which understandably caused some dissatisfaction with ILWU members. It wasn’t until 1954 that ILWU members were offered a choice of a second plan after Permanente consultant and economist Avram Yedidia convinced Bridges of the importance of dual choice; only 10 percent would leave Permanente.
But there was a problem with capacity. Bridges brought in thousands of new members to a plan that was recovering from a postwar slump and had limited facilities.
For the major ports of Oakland and San Francisco, where the Permanente hospital and clinics were already established, that wasn’t a problem. Looking north, ILWU members in Seattle got care through an agreement with the Group Health Cooperative of Puget Sound and other providers while Portland-Vancouver union members were served by Northern Permanente. Southern California would involve an estimated membership of more than 11,000 longshoremen, but the only Permanente hospital was at the Fontana Steel Mill, 60 miles from the ocean. Not exactly longshore territory.
Bridges wanted a Permanente facility in the San Pedro harbor area where there was a high concentration of members. His promise convinced Permanente that this is the time and the place to expand. Enter the Harbor City Hospital, proud pioneer of the Los Angeles South Bay service area.
Temporary facilities began immediately. A history compiled for the 60th anniversary of the South Bay area described the first San Pedro clinic:
Dr. Ray Kay (founder of the Southern California Permanente Medical Group) and Medical Director Dr. Ira “Buck” Wallin found a working clinic at 599 W. Ninth St. (and Grand Avenue) already occupied by doctors who were, at first, willing to share space. They even agreed to help take care of the longshoremen after hours. That arrangement was short-lived, however. Spooked by the economic threat posed by group practice, the doctors in the community gave the cold shoulder to Wallin’s staff and anyone who associated with them professionally or socially. The three fee-for-service doctors with offices in the shared clinic buckled under the pressure and vacated the premises.
Permanente promised the ILWU that they would build a new hospital in the Wilmington-San Pedro area, but progress was slow. The new Kaiser Foundation Hospital in downtown Los Angeles broke ground in late 1951, and drew institutional resources away from the Harbor City facility.
Things came to a head when 5,000 cannery workers in the San Pedro area signed up with the Permanente plan at the end of 1953. The workers’ employers had wanted them to sign up with the California Physicians’ Service, a competing prepaid plan offered through the California Medical Association. This was during the period where the medical establishment disapproved of Permanente physicians, who were barred from facilities such as San Pedro Community Hospital. The ILWU had been waiting more than two years for their promised hospital, and were getting cranky.
1953 was also the year the scrappy Permanente clinic in Pittsburg, Calif., opened to serve the labor unions and local community.
By early 1955 a site had been purchased, a complex deal involving three parcels, each held by different owners. Clarence Mayhew, the most prominent architect of Kaiser Foundation hospitals, drew up plans for a bold and innovative 66-bed hospital. It featured “vast amounts of glass,” separate corridors for staff and the public, and the famous “baby-in-a-drawer.” The groundbreaking ceremony November 4, 1955, included elected officials, leaders of the ILWU, and the PMA.
On January 14, 1957, the Kaiser Foundation Hospital in Harbor City at 1100 West Pacific Coast Highway, opened. It was hectic. At a 30-year celebration, Medical Administrator Pat Crowe reminisced “The day before we opened, carpenters were still making last-minute changes and final clean-up was not yet complete. Eighteen patients were admitted that afternoon and evening.” One of them was about to deliver her second child. At 1:54 a.m. on January 15 she gave birth to a healthy baby girl.
The ILWU Dispatcher newspaper of February 15 added this under “Local 13 Man Launches New Harbor Hospital”: First patient in the new $1,000,000 Kaiser Foundation Harbor Hospital was ILWU Local 13 member Oscar Roberts, covered through the ILWU-PMA Welfare Program.
As with all the Permanente facilities, demand always pushed capacity. Sixteen beds were added in late 1958, and a two-story clinic at 1050 West Pacific Coast Highway was built in 1959. Additional expansion happened in 1964, bringing bed capacity up to 121. 1969 saw further clinic expansion. A serious fire destroyed a section of the adjacent Parkview Medical Office Building in 1973.
Harry Shragg, MD, served at Harbor City from 1957 until 1968 as a surgeon, chief of the Department of Surgery, administrator of a community health care program for indigents, and medical director. In his oral history he recounted an epiphanic moment about Permanente medicine:
I was on call in the hospital one evening, and a black girl from Compton ─ which is a lower socio-economic level area ─ came into the emergency room with abdominal pain. I think she was sixteen years old. And she was seen by a board-certified pediatrician, examined by a board-certified gynecologist, and examined by me, a board-certified surgeon. We took her to the operating room ─ she had appendicitis ─ and we operated on her. And the whole sequence of that one episode, to my mind, crystalized the merits, and the value, and the philosophy of this kind of practice, where the issue of whether one could afford it or not never arose… She was just a sick person who came in and needed help, and we just gave her what I thought was outstanding quality care… That was, to me, a very dramatic and very memorable occurrence, and I think that’s what it’s all about.
Service to working communities. Yes, that’s what it’s all about.
Short link to this article: http://k-p.li/2yy3Hmj
, Heritage writer
[Part one of two]
For many years a hallmark of Kaiser Permanente’s preventive health care program was a battery of tests, designed to alert doctors to trends and red flags in a patient’s health. And it started with service to industrial workers.
Lester Breslow, MD, published a seminal article in the March 1950 American Journal of Public Health titled “Multiphasic Screening Examinations: An Extension of the Mass Screening Technique.” Dr. Breslow, who worked for the California State Department of Public Health in Berkeley, challenged the limitations of periodic health examinations, and proposed the value of an integrated battery of preliminary examinations – a “multiphasic examination.” The advantages included a single combined medical record, cost savings, and improved diagnoses. One passage in Dr. Breslow’s article stood out:
“This survey can be conducted in a time not much greater than would be required for screening for a single disease. Where such screening procedures are carried out among industrial populations the time element is especially important.”
At that time, the Permanente Health Plan was expanding to the public after having only served Henry J. Kaiser’s World War II employees, and much of that growth was from unions. Dr. Breslow had been a college classmate of Kaiser Permanente’s Dr. Morris Collen, and the AJPH article offered a solution to the challenges of bringing in large numbers of industrial members with physically demanding jobs and poor health care.
Since the main medical competitors, Blue Cross/Blue Shield, did not provide health checkups unless one had a medical complaint, the Permanente facilities saw a surge in well-patient testing that began to drain the system. Searching for solutions, Dr. Collen spoke with Dr. Breslow, who suggested setting up a multiphasic screening for a large new member organization – the International Longshore and Warehouse Union. Although the screening was coordinated under Permanente’s leadership, it included the cooperation of the United States Public Health Service, the California State Department of Health, the San Francisco Public Health Department, the Bureau of Vocational Rehabilitation, and the San Francisco Tuberculosis Association.
The screening was seen as a groundbreaking step public health. The ILWU Dispatcher article May 11, 1951 proclaimed:
The longshoremen’s program represents pioneer work in preventive medicine—the science of keeping people healthy. Multiple health tests for such a large group are a new procedure, in use only since 1948 and scientifically proved to be effective in detecting disease while there is still time for treatment.
Dr. Collen proceeded try his first group test at the ILWU’s Local 10 hall at pier 18 in San Francisco, and screened several thousand longshoremen. An article in The Dispatcher from August 17, 1951, was titled “ILWU Waterfront Health Tests ‘Complete Success’; 4,002 Go Through” boasted:
Follow-up tests and treatment are now being given to members whose test results showed any signs of disease by a special team of Permanente doctors assigned to the ILWU under the ILWU·PMA [Pacific Maritime Association] Welfare Plan.
At a dinner for all the people who worked on the project, Permanente Health Plan, Director Dr. E. Richard Weinerman said the health test program was a “complete success . . . The fact that this program was the first to be organized by a union, the first to provide so comprehensive an array of tests and the first to assure complete medical follow-up through the health plan made it an outstanding contribution to the field of preventive medicine.”
Dr. Weinerman also noted the role of what we now call “culturally competent care.” In a Dispatcher article July 6, 1951, he said “In order to condition [our physicians] to do the best possible analysis, the union is taking them on a tour of the waterfront to observe working conditions. Then they will be able, to understand clearly how longshoremen work, and they can interpret symptoms more accurately.”
Dr. Collen later recalled the next steps of expanding the screening to all Permanente members in his oral history:
We started our multiphasic program in the Oakland clinic [on November 29, 1951]… After the clinics closed at five-thirty, we used the existing office space in the surgery clinic. We developed a whole series of arrows and put colored tapes on the floors so that patients would go in through the various rooms and have their height, weight, blood pressure, and other physiological measures taken, and then fill out a history form. Then they would be directed to the laboratory for blood and urine tests, to the x-ray department for a chest x-ray, and to the electrocardiography department for an electrocardiogram. In that way, we didn’t require any extra equipment or any extra facility space. We developed a team of personnel that would work in the evenings from about five-thirty to eight, and we examined some twenty-five to thirty patients every evening that way at a very low cost.
In 1952, the Kaiser Permanente clinic at 515 Market Street in San Francisco also opened a Multiphasic Health Test facility in a space that had formerly been used as an orthopedic clinic.
The process consisted of about 15 procedures and only required the presence of a single physician, assisted by paramedics. Dr. Collen went on to explain the beautiful medical logic of the testing:
. . . Health is the only condition in life when you find people are medically similar. That is, healthy people have a relatively normal distribution of their tests and measurements so that you can develop routine repetitive procedures to do these tests. The health checkup, the evaluation of a normal well person, is the most routine, repetitive procedure in medicine.
As soon as one has a variation from normal, which is the basic definition of being ill or sick, then one becomes unique. Every diabetic is different; every hypertensive is different, and a diabetic with hypertension is even more complicated. So it is difficult to develop routine rules for sick people. But for normal people, and by definition 95 percent of healthy people are within normal limits, you can develop routine repetitive procedures. And that is the secret of the efficiency and economy of a programmed, systematized, multiphasic checkup.
An article in the Permanente newsletter Planning for Health touted the Multiphasic:
A broad stride in the practice of Permanente’s fundamental principle of preventive medicine was accomplished with the recent inauguration of the Multiphasic Health Check-up program at the Oakland and San Francisco medical centers. A new type of general medical examination, Multiphasic Check-up, is based on the premise that early diagnosis and adequate treatment can materially reduce the ill effects from significant diseases.
By the mid-1950s, 30 to 40 percent of all new members were choosing the multiphasic on their first visit.
However, in the early 1960s changes in technology would transform the examination. And the future was . . . computers.
Short link to this article: http://k-p.li/2mtLDb6
Special thanks to ILWU archivist Robin Walker for her help with this article.
, Heritage writer
Final essay in a series on Kaiser Permanente’s 70th anniversary
One of Kaiser Permanente’s key features is that it is an “Integrated health care system” – meaning it seamlessly provides care and coverage together and provides a wide range of services under one roof, whether in a Kaiser Permanente medical office or hospital or at a contracted facility. But in 1945 “integrated” also held another important meaning when the health plan was opened to the public – it reflected a deep commitment to being one of the first health care providers in the United States to have racially integrated hospitals and waiting rooms, as well as an ethnically diverse workforce, including physicians and allied health professionals.
During World War II, compliance with federal law (such as the Fair Employment Practice Committee) as well as decent best practices meant that employees were treated without institutional discrimination. An estimated 20,000 African Americans, along with many Chinese Americans, Native Americans, and Hispanic Americans, worked in the Kaiser shipyards. Kaiser Industries took great pride in this ethnic and racial diversity, featuring stories in the shipyard newsletters. A caption for a photo of an elegantly attired African-American female shipyard worker launching the Liberty ship S. Hall Young boasted: “How’s this, Adolf? It’s Richmond’s answer to your efforts to split America into warring racial groups.”
Industrial health care covered all workers, and the affordable supplemental health plan that Sidney Garfield, M.D. created for workers and their families in the Kaiser shipyards were equally open. In a time when the Civil Rights movement was just coalescing, racism in America was pervasive. Access to health care was no exception, yet the Permanente Foundation Hospitals took the high road.
Journalist Nick Bourne wrote about the Permanente Health Plan in the San Francisco News on October 7, 1943. He noted:
Illness knows no color line here. Red-helmeted men, women welders, Negroes lined up for a checkup by the busy young doctors. In one double room was Miss Katherine Rossi, shipyard loan office employee, here from Duluth, Minn., for six months; ill six months from skin trouble. A Negro woman was in the adjoining bed. “So help me!” declared Miss Rossi. “I’ve been in hospitals before, but never one like this. It’s sure swell. I don’t know what I would have done.”
The International Longshore and Warehouse Union newspaper The Dispatcher favorably remarked in 1945:
“The hospital’s facilities are open to all groups with no segregation of patients because of creed or color.”
In 1946, the year after the Health Plan was opened to the public, several local policemen visited the Oakland hospital with an eye to join. Permanente medical economist Avram Yedidia recalled the event:
“. . . The police chief said to me, ‘You know, when we walked through, I saw that you had some Negroes and whites in the same room. I don’t think we like that.’ “As I can recall, I responded, ‘Do you know this plan started that way, with blacks and whites in the shipyards, and that’s the way it goes. They worked together, and they were sick together.’ ” I told the police chief: ‘Those who don’t like it shouldn’t join the plan.’ ”
Diversity and inclusion continues to be a guiding principle at Kaiser Permanente. In 2013 Diversity Inc. magazine ranked Kaiser Permanente third in their “Top 50” national corporations, noting a workforce that at all levels reflects high percentages of women, Blacks, Latinos and Asians and has a diverse board of directors. This year Kaiser Permanente moved up to #2. Ronald Copeland, MD, Kaiser Permanente’s chief diversity and inclusion officer, recently affirmed the organization’s progress and challenge:
We must robustly, and in a systematic way, embrace multiculturalism and differences of our workforce and our member population to make sure that everybody’s meaningful needs are met in a personalized way…That is a journey we have been on for nearly 70 years and much progress has been made, but we still have a ways to go in order to become truly inclusive.
It’s about understanding and owning your own talents and vulnerabilities, and being comfortable and humble enough to share with and learn from others. It is about seeing and respecting the value in other people who are different than you and expecting them to do the same in return.
Over the past 70 years Kaiser Permanente’s commitment to nondiscrimination has moved well beyond race and ethnicity, to include gender, generation, sexual orientation, physical, and cognitive abilities in the pursuit of equality without exception. And, as a testament to the acceptance and support for such practices, 10 million people have chosen to “join the plan.”
Happy 70th anniversary, Kaiser Permanente.
Short link to this story: http://k-p.li/1MpkWJE
, Heritage writer
Second in a series on Kaiser Permanente’s 70th anniversary
From providing health care to workers and their families at Grand Coulee Dam to the massive medical program in the World War II shipyards, Henry J. Kaiser believed that cooperating with labor was more productive than fighting it. This institutional philosophy had profound positive implications on the nascent public postwar health plan. As the war was drawing to a victorious close – Victory in Europe had been announced on May 8, 1945 – Henry J. Kaiser’s health plan began to prepare for a peacetime economy by expanding beyond its own employees. The plan would be opened to the public by late July.
Given Henry J. Kaiser’s support for labor, it was not surprising that labor unions would be among the early member groups. Bay Area workers – Oakland city employees, union typographers, street car drivers and carpenters – embraced the Permanente Health Plan and its emphasis on preventive medicine.
On June 7, 1945, the Stewards and Executive Council of the International Longshoremen and Warehousemen Union’s Oakland unit voted unanimously to make coverage in Permanente a part of its future negotiations with employers. The executive council also requested that employers pay for the plan’s premiums.
Founding physician Sidney Garfield, MD., reflected on that support:
So [the postwar health plan] gathered momentum… [In 1949] the longshoremens’ union came to us and said, “We would like you to take over all our members.” They had about thirty thousand here and the [San Francisco] Bay area. They said, “We won’t give them to you unless you do it up in Portland, Seattle, Los Angeles and San Diego. We want to give you the whole thing.”
Then Joe DeSilva of the Retail Clerks’ union called up and wanted to see me. He came up here and said, “I want you to set up a health plan for our workers in Los Angeles.” I guess he had about thirty thousand workers plus families of I don’t know how many. I told him that we would need facilities because we couldn’t depend on using other hospitals because some day they would boycott us probably. So he said, “I’ll pay you several months dues in advance if that will help you build a hospital.”[i]
Years later, Kaiser Permanente CEO David Lawrence would express that relationship succinctly:
“If not for organized labor’s active marketing support immediately following World War II, it is unlikely that Kaiser Permanente would exist today.”[ii]
But labor did not just mean health plan members, labor employees were also a key part of delivering health care. A year after opening up to the public, the Permanente Health Plan signed its first nurses contract with the hospital in Oakland and the field hospital in Richmond, making it the first nurses’ union in the U.S. to do so.
On July 26, 1946 the Nurses Guild Local 699, affiliated with the Congress of Industrial Organizations, announced that they approved a contract covering wages and working conditions with Permanente Hospital of Oakland and Richmond (as well as medical staff at Kaiser Steel in Fontana). Lora Lee Swan, nurse consultant for the Guild, declared:
This is the first Alameda county hospital in which nurses have been allowed their democratic rights to a free election in choosing their bargaining agent. The precedent set here is truly a great victory for working nurses everywhere. [iii]
In 1997, after years of labor turmoil within Kaiser Permanente and competitive pressures within the health care industry, Kaiser Permanente and the Coalition of Kaiser Permanente Unions formed their groundbreaking Labor Management Partnership. Today, the partnership covers more than 100,000 union-represented employees in 28 local unions as well as 14,000 managers and 17,000 physicians in California, Washington, Oregon, Colorado, Georgia, Hawaii, Virginia, Maryland and Washington, D.C.
[i] “Sidney R. Garfield in First Person: An Oral History,” interview by Lewis E. Weeks, 8/22/1984.
[ii] KP CEO David Lawrence, “Tentative national partnership announced between AFL-CIO and Kaiser Permanente,” Newswire (KPNW) May 2, 1997
[iii] “CIO nurses approve pact at Permanente,” People’s World, August, 1946
Short link to this article: http://k-p.li/1HOxTXU
, Heritage writer
The Kaiser Foundation Health Plan’s first beachhead in Southern California was a modest hospital for workers at the Fontana Steel Mill.
The plant was built by Henry J. Kaiser in 1942 as the first West Coast source of the rolled steel plates needed to build Liberty and Victory ships for World War II.
After the war the Health Plan in Fontana went public, and with the strong support of labor unions like the Retail Clerks International Union and the International Longshoremen and Warehousemen Union it began to grow throughout the region.
The first facility outside of Fontana was established in Harbor City in 1950 when the entire West Coast ILWU signed up for the plan.
The next year the Retail Clerks International Union signed on and facilities were founded in Los Angeles, at an inauspicious clinic on La Cienega Boulevard; the state-of-the-art Permanente Foundation Hospital on Sunset Boulevard would not be built until 1953.
On January 1 of that year 13 physicians signed the Southern California Permanente Medical Group’s first Partnership Agreement with Raymond Kay, MD, as Medical Director.
Special thanks to Cathy Romero, Communications Production Specialist, Pasadena, for providing the Heritage Resources archive with scans of the Southern California Planning for Health newsletters.
Short link to this story: http://ow.ly/pADVN
, Heritage writer
As World War II neared an end, the Permanente Health Plan was looking at a dramatic shift in its member base. Wartime shipyard closures loomed, and the future of the plan during peacetime would hinge on attracting new members in the community.
Given Henry J. Kaiser’s support for labor, it was not surprising that labor unions were among the early member groups. Bay Area workers – Oakland city employees, union typographers, street car drivers and carpenters – embraced the Permanente Health Plan and its emphasis on preventive medicine.
One of the first and largest unions to endorse the plan was The International Longshoremen and Warehousemen Union.
On June 7, 1945, the Stewards and Executive Council of the ILWU’s Oakland unit voted unanimously to make coverage in the health insurance plan of the Permanente Foundation a part of its future negotiations with employers. The executive council also requested that employers pay for the plan’s premiums.
We want our Permanente!
An article in the ILWU’s The Dispatcher explained:
“. . . Permanente operates on three principles: prepayment . . . group practice of medicine (the hospital has 84 doctors on its staff, many of them specialists . . . and adequate facilities.)”
Related to adequate facilities, the article noted that a group practice health plan like Permanente could afford the latest medical equipment, which individual, fee-for-service physicians did not have.
Preventive care takes center stage
“The most important provision of the plan . . . is that the first two visits to the hospital are included in the insurance.”
“A spokesman for (Permanente) explained that the hospital was interested in really affording the worker medical security. If the patient had to pay for the first two visits, he would be deterred from using the plan until an ailment became necessarily serious.”
“The hospital’s facilities are open to all groups with no segregation of patients because of creed or color,” the article reported.
Within five years, by 1950, ILWU president Harry Bridges had brought all 6,000 union members working up and down the West Coast into the Permanente Health Plan.
The union’s agreement with Permanente leader Sidney Garfield, MD, included opening a medical facility in San Pedro near Long Beach. Up to that point, the health plan had only one Southern California hospital, which provided care for the workers at the Kaiser Steel Plant in Fontana.
, Heritage writer
Kaiser Permanente Heritage Resources has started a regular column in the labor-management partnership publication Hank about the rich labor history of the organization.
The Summer 2012 issue includes a story about how Bay Area longshore workers participated in a groundbreaking medical program—the Multiphasic Screening Examination, the first comprehensive health assessment conducted in cooperation with a union, way back in 1951. One aspect of this relationship was understanding that good medical care requires knowing about a patient’s living and working conditions. Even after a remarkable record of offering health care for workers in the shipyards during World War II, further physician education was called for.
Recognizing traditional medical services were not well attuned to the health needs of working people, the ILWU newsletter The Dispatch noted “Local 10 is going to put five Permanente doctors through a course of indoctrination on the waterfront, so that they will learn first-hand the conditions under which longshoremen work and will be better able to interpret the tests.”
Read the whole story at http://www.lmpartnership.org/stories-videos/longshore-start-total-health
short permanent URL for this item – bit.ly/RVK5RY
, guest author
Throughout its history, Kaiser Permanente has relied on the “can-do spirit” of its dedicated workers and on the support of organized labor to keep the prepaid health plan strong.
Coming out of World War II, the medical plan had proven its viability in caring for a large shipyard workforce, but with the end of shipbuilding contracts, Henry Kaiser and Permanente founder and medical director Dr. Sidney Garfield had a big problem. Where were the large numbers of new members going to come from?
Kaiser, a friend of labor, attracted workers’ unions whose leaders understood the power of prepaid health care and wanted it for the welfare of their workers. Bay Area workers – from Oakland city employees, who were the first to sign up, to union typographers, street car drivers and carpenters – embraced the Permanente Health Plan with its emphasis on preventive medicine.
In 1950, Harry Bridges brought the 6,000-member International Longshoremen and Warehousemen Union (ILWU) into Kaiser Permanente, bringing the total West Coast membership, including Los Angeles, to almost 160,000. In 1951, the Retail Clerks union added 30,000 to the membership rolls in Los Angeles.
Opposition tries to squelch KP
Despite this success, Kaiser and Garfield often faced rear guard actions from private practice doctors who felt threatened by group practice medicine. In 1953 when KP opened a new hospital in Walnut Creek and sought the health plan contract with workers in the U.S. Steel plant in Pittsburg, California, all hell broke loose in that small town along the Carquinez Strait.
Before Kaiser Permanente came along, the steelworkers union had both a national hospitalization plan and a local supplementary health plan with local private practice doctors. The workers were not satisfied with the current health plan and were complaining that providers charged too much and were lackadaisical about responding to emergencies and requests for house calls.
For their part, the Pittsburg area doctors argued that inflation required rates to rise and disputed the idea that service to members was lax.
Kaiser Permanente already provided care to steelworkers at the South San Francisco Bethlehem Steel plant and was prepared to expand services to the Pittsburg area. The beginning of KP’s negotiations with the Steelworkers Local 1440 in Pittsburg raised the hackles of the 41 private practice doctors already established in the area.
These doctors, all members of the East Contra Costa branch of the Alameda-Contra Costa Medical Association, quickly devised a new and better plan to offer the union, including 24-hour emergency service and a cap on fees.
Offer steelworkers couldn’t refuse
Joseph Garbarino, in his 1960 study of the Pittsburg conflict for the University of California, reported that the union bargainers welcomed Kaiser Permanente because of its offer to provide comprehensive care for a specific price for a specified period of time. This arrangement was attractive to the local union whose leadership had never before been able to negotiate such a favorable deal with their private practice providers.
The Pittsburg area doctors were furious and immediately mounted a campaign to discredit the Kaiser Permanente agreement. The doctors appealed to the steelworkers to reject the decision of their insurance committee and place the KP plan and the private doctors’ revised offer side by side for a vote of the full membership.
Fred Pellegrin, a Kaiser Permanente physician in the new Walnut Creek facility, remembers a rally where the local doctors “begged us not to go to Pittsburg … People stood up, yelling at us, called us Communists. It was a real shouting match.”
Using full-page newspaper ads, handbills and direct mail, the fee-for-service doctors bombarded the community with arguments supporting their plan and implied that the national Steelworker union officials were investigating the local’s decision.
The union answered the doctors’ charges in its newsletter and then agreed to a Sept. 3 (1953) election. Both sides agreed to a break in hostilities for the month of August. The agreement called for the doctors to stop their campaign and for the union leaders to remain neutral on the election.
The truce ended just days before the election when the union distributed voting packets with both health plan proposals, and included a leaflet encouraging members to favor the Kaiser Permanente plan. Enraged private practice doctors took to the battlements again, issuing a more detailed plan explanation and blasting the union in a full-page newspaper ad.
The doctors hired a truck with a loud speaker that cruised through workers’ neighborhoods broadcasting their opposition to Kaiser Permanente. They enlisted supporters, including Pittsburg doctors’ wives, to distribute literature in the steel company parking lot. Plan B was to drop leaflets from the air if solicitors were barred from the plant. According to news reports, tensions rose and the sheriff’s department was called, but no clashes occurred.
Victory of KP health plan
The Pittsburg medical establishment’s effort failed as steelworkers voted 2,182 to 440 to retain the Kaiser Permanente plan. For KP, this was a victory, but more struggles related to organized labor were yet to come.
Financial troubles in the 1980s and 1990s resulted in labor issues that threatened to stunt the health plan’s progress. Happily, those years of turmoil spawned Kaiser Permanente’s landmark Labor Management Partnership (LMP), which forged a cooperative relationship between KP’s 26 unions and the health plan leadership. The partnership fosters a respectful collaboration to improve health care for members and to create a positive work environment.
Kaiser Permanente unions had a big role in bringing about that partnership. In the midst of hostile bargaining in 1995, union leaders realized the labor disputes could damage the future of the health plan. Kathy Schmidt, a member of the bargaining team from Oregon, recalled, “We realized: here is the most unionized system in the country. Why don’t we try to help them? We learned more about trying to have a Partnership.”
Then-Kaiser Permanente CEO David Lawrence reached back across the abyss and agreed. “What I remember thinking about at that meeting was: We’ve got nothing to lose by being forthcoming about what I believed needed to happen …about the kind of collaboration that I think is required to deliver modern medical care in all of its complexity,” he told Harvard University researchers in 2002.
Today, scholars at both Harvard’s School of Government and Stanford University’s School of Business are following the progress of the LMP and consider it a prime example of labor and management cooperation. Its continued success will contribute to the realization of KP’s goal of being the model for health care delivery in the United States.
Read more about the Labor Management Partnership.