Big Profits and More Concessions


California Pacific Medical Center (CPMC) has four medical campuses in San Francisco and is the city’s second largest private employer with 6000 employees and “over 1500 doctors and allied health practitioners.” It is owned by Sutter Health, a huge healthcare provider operating mostly in northern California.

This vast hospital complex of money and power is actually registered as a “non-profit” where it receives lucrative tax perks as long as it upholds its state charter of “serving the public good.”

But here is where it gets sticky.

CPMC enjoyed over 200 million dollars in profits last year and recorded an astounding 20 percent profit rate. Critics are quick to point out that this is totally out of whack even for private hospitals where the national profit rate is but three percent.

And, against this backdrop, Sutter is still demanding concessions from its employees. And that’s the rub felt by 750 members of the National Union of Healthcare Workers (NUHW).

Helen York has worked 45 years at CPMC as a cashier in food service. She told me that “we have been negotiating over a year and they are still insisting on reducing our health plan options, eliminating shift pay differential and cutting some of our other benefits that we have enjoyed for decades. Why are they messing with us when they are regularly making such big profits?”

Not so, said Kathie Graham, CPMC communications director. “CPMC is in the middle of contract negotiations with NUHW, which was elected last year …replacing SEIU. While we are committed to taking care of our employees, we also must take steps to make our services more affordable for our patients.

“To prepare for the future, we are taking steps throughout the organization to reduce our costs while maintaining or enhancing quality. We have also concluded that our pay and benefits should be simplified and more consistent throughout the organization.”

NUHW vice president John Borsos was quick to respond in my interview.

“Referring to wages and benefits being simplified and consistent is a reference to the concessions already conceded by SEIU-UHW before they were ousted by CPMC workers who voted for NUHW last year. In fact, SEIU granted concessions in every single one of its California hospital bargaining negotiations of 2010 and 2012, including at around ten Sutter hospitals.

“To be clear, not one single contract has been settled by SEIU-UHW without concessions; not since the international SEIU took over the local in early 2009 and kicked out the original elected 100-member executive board and dozens of stewards who then became the founding core of NUHW a few months later.

“For example, while still representing workers at CPMC, SEIU agreed to remove long-standing, strong job-protection contract language. But, at a recent bargaining session, our newly elected member-led team got that ‘no contracting out’ language reinstated. This was a big victory and a strong signal to Sutter that NUHW members have a firm ‘no-concession’ bargaining stance.

“SEIU has conceded so regularly in the last several years that hospital management, and not only at Sutter, expects workers to give concessions, even when they are making enormous profits. No way!”

Proud History of Unionism at CPMC

NUHW workers conducting an informational picket at CPMC’s Pacific campus on October 24 told me that Sutter, traditionally, has been the worst employer in the industry. They pointed to a 60-day strike in 2005 at CPMC as an indication of management intransigence at the bargaining table. Nonetheless, these workers emphasized, we in SEIU-UHW at the time never agreed to concessions at Sutter or anywhere else.

“This has been our bargaining stance for over 60 years,’ Borsos added, “since San Francisco General hospital workers formed the nation’s first healthcare union shortly after the 1934 Longshore General Strike.

“Even before Sutter took ownership, CPMC hospitals were the core of militant unionism going back to the 1930s. They were the foundation of the union and were among the first collective bargaining agreements in the country negotiated by the original Local 250 some 60 years ago that regularly set contract standards for other hospitals here and throughout the country.”

And, today, Borsos continued, “we have absolutely no interest in going backwards, especially when there is no economic justification. “

Sutter’s History-Hard Bargaining & High Pricing

The enormous profits of the CPMC medical complex begs the question – how were profits of over 200 million dollars made last year?

One answer comes from California attorney general Kamala Harris who recently subpoenaed Sutter Health, CPMC’s owner, for possible anti-trust pricing. This is not the first time.

The August 3, 2006 Sacramento Business Journal reported that “Sutter Health has agreed to settle a class-action lawsuit that alleged price-gouging of patients without insurance, potentially costing the Sacramento-based health system hundreds of millions of dollars.”

In addition, Fred Seavey, NUHW research director, informed me that “a San Francisco law firm recently filed a class action lawsuit on behalf of consumers claiming violations of national and state anti-trust laws where Sutter is alleged to have, once again, unnecessarily boosted prices for consumers.”

Sutter has long been plagued by such criticisms which are compounded by the fact that they have the city’s lowest rate of providing charity care to low-income patients.

None of these actions seem consistent with their non-profit status nor, community healthcare activists point out, with their medical mission.

So, we see at CPMC a clash of two forces, each with their own story. It’s never easy to overcome money and power but history seems to be on the side of NUHW in this case.

Carl Finamore is Machinist Lodge 1781 delegate to the San Francisco Labor Council, AFL-CIO. He can be reached at local1781@yahoo.com

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