Photo by Anthony JohnWhen thousands of health-care workers won union contracts at 40 California and Florida hospitals owned by the notoriously anti-union Tenet Healthcare Corp., it was hailed as another victory for the labor movement.
So how come Ralph Nader, other consumer advocates and the state's largest nurses' union aren't celebrating?
In a statement issued on behalf of the California Nurses Association (CNA), Nader says the deal is the latest example of big unions signing "backroom deals" with questionable health-care corporations at the expense of the greater public good.
"Tenet is notorious for its commitment to profits regardless of the consequences for the public's well-being," Nader stated. "As has already occurred with other arrangements, SEIU's backroom deal degrades independent professional responsibility of nurses for patient-care protection."
The Service Employees International Union (SEIU) joined with the American Federation of State, County and Municipal Employees (AFSCME) in an unprecedented labor agreement with Santa Barbara-based Tenet, which was, until this deal, California's largest nonunion health-care chain.
"This is a huge breakthrough for everyone who works in these Tenet hospitals, and for their patients, too," said Luisa Blue, president of the SEIU Nurse Alliance of Southern California in a press release posted on the union's website. Also quoted was Tenet president Trevor Fetter, who said the agreement "makes Tenet a stronger company, allowing us to move into the future with a motivated workforce focused on quality patient care."
Separately, the CNA and SEIU for years had sought to force Tenet to sign a contract. Nader believes the reason Tenet went with SEIU was because of the union's good relationship with such other budget-oriented health-care companies as Kaiser Permanente. In 1997, SEIU signed a labor-management partnership agreement with Kaiser. In return for gaining major wage increases and benefits for its members, the union cooperated with Kaiser's controversial cost-cutting campaign to replace registered nurses with lesser-licensed hospital staff. Those measures were widely attacked by groups seeking to reform the health-care industry and directly killed CNA's union drive. CNA claimed Kaiser and SEIU were intentionally trying to drive nurses out of the medical profession.
"If you look at what SEIU and Kaiser agreed to, it is insidious for the public," said Charles Idelson, CNA's communications director. "They agreed to gag their employees on any criticism of Kaiser. They were silent when Kaiser closed hospitals, made cuts in patient services and cooperated with Kaiser on reductions in care, including the replacement of registered nurses with lesser-licensed or unlicensed staff."
Jamie Court, executive director of the Santa Monica-based Foundation for Taxpayer and Consumer Rights, agrees. "Kaiser and SEIU cut deals over the years that basically speeded up the de-skilling of the nurses' profession," he said. "They allowed unlicensed personnel, housekeepers, to answer patient call buttons. They stepped up the role of unlicensed professionals in the delivery of medical care at hospitals. It was cheaper for Kaiser, and it was good for SEIU because they represented the less-skilled workers, but it was bad for registered nurses and bad for patients."
Court criticized SEIU for signing a similar agreement with Tenet. "No labor union should ever take a bribe to be silent about abuses, and SEIU has done that with Kaiser, and now it looks like that is what's happening with Tenet," he said. But he believes SEIU's latest deal is even worse for the public good because of Tenet's terrible corporate history. "Here's a union that has compromised patient care before in pursuing its own interests—and a company that probably shouldn't be in business," he said.
Tenet's reputation is so bad the Foundation for Taxpayer and Consumer Rights is using the company to promote state Senate Bill 335, the so-called Corporate Three Strikes Act, which would ban any corporation convicted of three felonies from doing business in California.
"As far as corporate crooks are concerned, Tenet jumps out of the bunch," said Carmen Balber, a consumer advocate with the organization. "We use Tenet as an example because their actions are so egregious and what they've done is such an affront to decency that Tenet is a poster child for this bill."
A quick review of Tenet's corporate history provides the details. In 1994, the company pleaded guilty to federal conspiracy charges for paying kickbacks and bribes to doctors. In return for payments, doctors were told to direct psychiatric patients to mental hospitals, where they were held against their will until their insurance benefits expired. Tenet ultimately paid more than half a billion dollars in fines and settlements relating to the scandal.
Last year, federal and state authorities began investigating Tenet for Medicare fraud and for overcharging patients for medications and other services. SEIU, which was still trying to pressure Tenet to negotiate with the union at the time, uncovered evidence that the company's average charge for a hospital stay was 63 percent higher than its competitors'.
In February of this year, Tenet paid $4.2 million to settle similar charges involving its hospitals in Florida. Tenet is currently being investigated in Northern California, where 82 former patients sued two of the company's doctors for subjecting them to unnecessary heart surgeries at Redding Medical Center. The lawsuit charges Tenet with fraud, conspiracy, battery, wrongful death, negligence and elder abuse.
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As a result, Tenet's stock value plunged by 70 percent last year.
"For Tenet, this deal with SEIU is about trying to repair its image with shareholders and inspire investor confidence," said CNA's Idelson. "But, if anything, it will probably generate more investor insecurity because of all the legal problems it is creating."
Idelson was referring to the lawsuit CNA filed last week against SEIU and Tenet with the National Labor Relations Board, demanding an open election at seven of the 40 Tenet hospitals covered by the deal, including one in Los Alamitos.
"This deal is patently illegal, and we believe it will ultimately be overturned," Idelson said. "Tenet should not be handpicking who represents the registered nurses and other employees in its hospitals. The registered nurses and other hospital workers have no voice in this process, and that's the exact-opposite goal of the labor movement."