As Kaiser Workers Face Cuts, Execs Have Enjoyed Lavish Benefits

Despite strong profits and robust executive compensation at Kaiser Permanente, workers for the Calfornia-based health care giant say they're facing down cuts to their health and retirement benefits in pending contract negotiations.

Proposed cuts include freezing employees' defined-benefit pension plan and switching to a less desirable defined-contribution plan, according to a flier circulated by the National Union of Healthcare Workers. Workers are being asked to accept a more costly employee health insurance plan and cuts to their retirement health benefits, the union says.

While those cuts get debated, Kaiser executives have been living well. Pay and perks for high-ranking officials at the nonprofit have been generous in recent years, according to disclosure forms.

In 2009, the most recent year for which figures were available, George Halvorson, the CEO for Kaiser Foundation Health Plan & Kaiser Foundation Hospitals, received compensation of $6.7 million. Halvorson's package included a $1.2 million payment to his "supplemental non-qualified retirement plan." More than 40 other officers and employees received payments to such retirement stashes -- several of them in the hundreds of thousands of dollars.

Members of management have also received large "relocation" loans from the nonprofit. Philip Fasano, the chief information officer and vice president, was given such a loan for half a million dollars, according to Kaiser's IRS filings. Disclosure forms with the State of California indicate that two of those relocation loans -- including one for $500,000 -- are forgivable, meaning that the principal of the loan can eventually be forgiven, so long as conditions are met in the short-term. (The state filings do not name the officers who received the forgivable loans.)

John E. Nelson, a Kaiser spokesperson, told HuffPost that the nonprofit's executive compensation is fair and reasonable, given that between its hospital network and health plans Kaiser is "by far the largest and most complex health care organization in the nation."

"Compensation paid to senior management is substantially less than that of many for-profit health plans, and less than would be expected when compared to nonprofit health care companies, once the size and complexity of Kaiser Permanente is taken into account," Nelson wrote in an email. "Kaiser Permanente's senior management have unique leadership positions, in that they have the equivalent of two roles: overseeing a major health plan with 8.8 million members, as well as a total care delivery system in multiple states with 36 hospitals, 450 medical office buildings, and 500 pharmacies."

Kaiser reported a net income of $921 million for the first quarter of 2011. Last month the non-profit announced it would be raising premium rates by about 11 percent on 300,000 Californians enrolled in plans through small businesses -- a hike much smaller than some other insurers have recently implemented, but a hike nonetheless.

Turusew Gedebu-Wilson, a Kaiser dietician who's been involved in the bargaining talks between workers and management, says she finds the prospect of cuts to employee retirement and health benefits "shocking."

"If the organization is making a lot of money, if the executives are making a lot of money, then why do they want to take away so much?" Gedebu-Wilson said. "To tell us that we have to be paying more is really mind-boggling to me."

Nelson would not say whether Kaiser management indeed seeks concessions from workers, noting that the negotiation process is not complete. The nonprofit intends to bargain with workers "in good faith," Nelson said, and it plans on providing "market-competitive" employee benefits to attract the best talent possible. Nelson declined to say whether executives would take cuts to their benefits if employees were asked to do so.

"Kaiser Permanente sets senior management compensation levels so that the organization can successfully attract and retain the leadership it needs to deliver affordable, high quality health care," Nelson said.

Comments

[shockwave11]

11:32 PM on 07/15/2011

From a prior post:

Join us holding these very Kaiser executives accountabl­e to workers and patients at: http://kai­serunited.­org/.

You can actually adopt one of the executives and let them know that you're holding them accountabl­e to workers, consumers and patients: http://kai­serunited.­org/adopt-­an-executi­ve

[minders]

06:55 PM on 07/15/2011

I am a member of NUHW, the union representing behavioral health care professionals working for Kaiser. In addition to threatening to cut our retirement and health care benefits, Kaiser management has also been seriously understaffing our departments, leading to inexcusable long wait times for patients to see a provider. In our psychiatry clinic, it can be 3 weeks for a first time "screening" appointment, then another 3 weeks to see a doctor and 8 weeks to see a therapist! NUHW is not only negotiating for fair benefits for the employees, but also adequate staffing to provide safe and necessary patient care.

[czander]

12:58 PM on 07/14/2011

Estimates of the compensation cost for health care CEO’s and their executives total about $7 to 10 billion a year. If their pay was reduced by 80 percent it would cover health insurance for 500,000 families enrolled in a government insurance program at $10,000 per year per family. Also, if health care was nationalized the administrative savings alone would be enough to provide health care coverage for the one million uninsured in America. One third of every dollar spent on health care goes to administrative overhead and half of that goes to executives. According to the Security and Exchange Commission between 2000 and 2007 the 10 largest publicly traded health insurance corporations increased their profits 428 percent from $2.8 billion to $12.9 billion, as premiums increased 87 percent.

[Steve Rockett]

11:36 AM on 07/14/2011

Ugh, my condolences.

[Vavavoom]

08:23 AM on 07/14/2011

I need to urgently get in on the scam. Transform my little company into a non profit of sorts. Give myself a yearly forgivable loan. Squeeze my employees out like lemons.
Hey .... it's the American way ... or so it seems.

On second thought, becoming a church would be even better. That way I can have suckers work for free.

[JAT3]

07:24 AM on 07/14/2011

Not surprising how much this sounds some much like the rich get tax breaks and the rest of take the cuts to all the things around us including our paycheck!

[Eagle Bill]

11:18 PM on 07/13/2011

BLOODSUCKERS!!!

[Milash]

08:25 PM on 07/13/2011

When Kaiser says "Thrive", they mean their management's paychecks.

[Rasheed Kalifani Knowles]

06:43 PM on 07/13/2011

This whole article is the perfect case for why collective bargaining via employee unions is essential.

Notice the excuses for the exec pay raises is exactly the same excuses given by the banks regarding their massive bonuses funded by taxpayer bailout money.

It's a white-collar scam that has been legalized by deregulation and the only thing standing between the consumer and the employee from getting shafted is---- US:

THE CONSUMER AND THE EMPLOYEE UNIONS.

[Ann Starke]

06:07 PM on 07/13/2011

This makes me sad. With a brief two year hiatus in the early 90s, I have had Kaiser insurance since 1970 and have been very happy with the care I have received. I have had surgeries at Stanford University Hospital and other well-thought-of hospitals in the Bay Area and Kaiser was the best when I had my cancer surgery there in 1976, and other surgeries since then. The nurses are the nicest in the world, the doctors are great, and my husband and I have the world's greatest primary care physician. The doctors and nurses deserve the very best when it comes to salaries and benefits. In our area, I understand that the Kaiser nurses are well-paid. Good. I am glad. They earn it. At Kaiser San Jose I have never had a bad experience.

Administrators are another matter. It looks to me like Kaiser's raises are much lower than for-profit hospitals, but we patients are paying more per procedure and appointment. We are fortunate that we can still afford it, but it is noticeable. i feel for those who cannot afford the expensive mris and cts, and pain management procedures that I have had to have in the past, or the heart or lung tests that my husband has had.

It is time to freeze those pay raises for the executives. Kaiser is doing a good job. Reward the people who deal with the patients. They deserve it.

[Deaconess]

05:52 PM on 07/13/2011

During recovery after previous recessions, people in all income groups tended to benefit. But today the economy's meager gains are going to the wealthiest only. Until the mid-2000s, workers’ wages and benefits were 64% of the economy thru boom and bust. Now they make up only 57.5%. A typical CEO of a major company earned $9 million last year---UP a fourth from 2009. An average worker's hourly wages were 1.6% lower in May than the year earlier. To slow and reverse this trend, we must support Democratic oversight of Wall Street, Unions and much more. Support Obama or our Democracy could be history---bought and sold by Wall Street

[StopMakingSense2]

05:10 PM on 07/13/2011

Executive pay has become ridiculous and a huge misallocation of corporate resources. The board provides little oversight and is just a circle jerk of pay increases. The shareholders offer little restraint since much is held through mutual funds that offer no oversight. Unfortunately the parallels between public oversight of politicians and boardrooms has gone hand in hand. It seems so far out of whack to be unsalvageable. Lets just do to the boardrooms what they have done to the middle class. Outsouce them! I'm sure there are people in India that can do just as good a job for $1 a day.

[oxi]

05:08 PM on 07/13/2011

Ahhh capatalism...

[g-moi]

03:23 PM on 07/13/2011

This illustrates the problem in our country. The top few are rewarded at the expense of the bottom - majority.

[dzadzey]

01:58 PM on 07/13/2011

This is why healthcare should NEVER be a for profit industry. Patient care is sacrificed on the already bloody altar of corporate profits.

[getsit]

02:51 PM on 07/13/2011

Kaiser is non profit. That doesn't prevent those running Kaiser from taking too much for their own personal gain. Afterall, it's the managers who make the rules about their own pay and others' pay,and benefits and who gets laid off. The managers a not union. Look at California's state universities-same thing.