Kaiser Permanente workers announce an official strike date

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Health care’s big labor fight to watch

The UAW strike isn’t the only major labor movement in the country. More than 75,000 Kaiser Permanente health care workers will strike next week — Oct. 4 through 6 — if a deal with the health care giant doesn’t come through before a coalitions of unions’ current contract expires on Sept. 30. The last scheduled bargaining sessions ended late last week with no deal in sight.

My colleague Brittany Trang has more on what a strike might look like. The unions involved consist of ancillary health care staff like surgery, radiology, and pharmacy techs; phlebotomists; food service staff; security officers; respiratory therapists, and more, at 39 Kaiser hospitals around the country. The priorities of the two parties appeared misaligned in their conversations with STAT, with union representatives bringing up short-staffing issues as their top concern, and Kaiser promising to negotiate on wages and benefits.

Pediatrics medical assistant and SEIU-UHW executive board member Yvonne Esquivel told STAT that Kaiser executives are turning a “blind eye” to the fact that many frontline health care workers left the industry during the pandemic to take less stressful jobs, and Kaiser never replaced them, leaving workers to work two or three people’s jobs.

Kaiser reacted to the strike notice with its own statement, noting that for 26 years, it has reached agreements with the coalition “every time, with no strikes. A strike notice does not mean a strike will happen.” Read more.

“Cha-ching!”

Last year, my colleague Tara Bannow and I investigated the private equity firm Welsh, Carson, Anderson & Stowe and a handful of its portfolio companies — including U.S. Anesthesia Partners. A former USAP executive memorably told us that the company’s growth strategy was “absolutely” to gain leverage with health insurers: “Look at all the big hospital systems like HCA. They do the same thing … everybody wants to negotiate better with the payers.”

Well, it turns out the Federal Trade Commission agrees, and thinks their strategy has been wildly anticompetitive. The FTC is suing both USA=P and Welsh Carson, alleging the two parties created a monopoly for anesthesia services in Texas through several roll-up acquisitions and then used that growing market power to squeeze employers and insurers. The lawsuit quotes an insurance executive who said USAP and Welsh Carson used acquisitions to “take the highest rate of all…and then peanut butter spread that across the entire state of Texas.” A USAP executive put it more bluntly following one acquisition, according to the complaint: “Cha-ching!”

Read the latest from Tara and me. We highlighted other major allegations in the FTC’s complaints and spoke with experts to understand whether this is a harbinger for the FTC to go after other health care private equity deals.

PBM lobbying: A West Side Story

Last week, pharmaceutical manufacturers and pharmacy benefit managers happily bashed each other in Congress over who is responsible for the country’s high drug prices — an act that is all too familiar.

While the main PBM lobbying group, the Pharmaceutical Care Management Association, was fighting, a new coalition of PBMs formed to join the fight — against PCMA.

Six smaller PBMs make up the new lobbying group, called Transparency-Rx: AffirmedRx, Liviniti, MedOne, Navitus, RxPreferred, and SmithRx. They label themselves as “transparent” because they pass through 100% of prescription drug rebates to their employer clients. PCMA has been fighting against reforms in Congress, but Transparency-Rx wants Congress to go further. For example, the group wants drug rebate reforms to extend to the big PBMs’ group purchasing organizations, also known as rebate aggregators, root out hidden fees and data-sharing limitations, and ensure all payments between PBMs and consultants are fully disclosed to employers.

“The average transparent PBM has a lot of shared values, so it just made sense to coalesce as a counterweight to PCMA,” Joe Shields, the group’s managing director, told STAT. “We want to frame issues in a way that’s a little bit more straightforward so people can understand them, and hopefully empowers the right type of approaches to the marketplace.”

CommonSpirit keeps growing, and losing money

CommonSpirit Health might be the poster child for the mantra “bigger isn’t always better.”’

The system of more than 140 hospitals has lost money almost every year since it was formed through a 2019 mega-merger. At the same time, it keeps adding more hospitals — and with them, more debt.

“They are not doing well, despite this mega-merger, but they’re doubling down,” Johns Hopkins professor Ge Bai told Tara.

Case in point: CommonSpirit’s total debt grew by $2.9 billion in its latest fiscal year. That includes $1.4 billion in lease obligations from its deal to add five Utah hospitals. CommonSpirit also cut about 2,000 full-time equivalent positions earlier this year in an effort to cut costs. A reminder this is the same system that paid its CEO $35.5 million in 2021. Read more from Tara.

Industry odds and ends

• Elevance Health has laid off an undisclosed number of people, based on a review of LinkedIn posts. The Blue Cross Blue Shield insurer declined to provide specifics. Elevance euphemistically said it has “made some adjustments to our resources to better position our company. However, these recent changes are limited in scope and will not impact our customers’ benefits, services, or interrupt any continuity in their access to care.”
• The Biden administration is crafting rules that would outlaw unpaid medical bills from hurting people’s credit scores, STAT’s Annalisa Merelli reports.
• The physician staffing firm American Physician Partners finally filed for bankruptcy last week. Hospitals that used APP were switched to other vendors. APP’s biggest creditor: R1 RCM, the billing firm that is part owned by Ascension.
• The federal government has released a new proposed rule that says any fees associated with going through the surprise medical billing law’s arbitration process must be made via rule-making with a chance for public comments. The government is facing a cornucopia of lawsuits from the Texas Medical Association — and which is supported by almost all other hospitals and doctors. One of those lawsuits threw a fit that the government increased the arbitration administrative fee from $50 to $350, and the judge agreed.
• Things look bad at Tufts Medicine, the academic hospital and physician system that operates around Boston. S&P recently downgraded Tufts’ credit rating by two notches, saying that “management’s turnaround efforts could be insufficient to offset various industry pressures.”
• Laurel Lucia of the UC Berkeley Labor Center has a fascinating blog post about why workers in California’s Monterey County are getting slammed by high hospital prices and insurance costs.

The Meme Ward