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The Scheinman Institute blog provides the latest information and news about the Institute's research, education, student engagement and outreach.

Patient Centered Collective Bargaining

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By John August/Director of Healthcare and Partner Programs at the Scheinman Institute (Part Two)

Thank you for following this series of ideas and suggestions.

In these extraordinarily trying times, I wanted to let you know that when I speak to colleagues, friends, activists about my passion for collaborative work systems, I do so in the following manner:

I feel compelled to do this because understandably in our world today, collaboration seems a far cry from what is necessary.  My friends who work with Bangladeshi women who go on strike all the time in protest of the global companies that pay no attention to anything except their profits, is but one of thousands of examples of the kind of degradations that must be fought and eliminated.  I agree.  It is very difficult to discuss collaboration.

But interestingly, my friends who do that work, appreciate the need for collaborative purposeful dialogue.  They know that in the long run, we must find ways of sitting down and building systems that sustain life.

I suggest that there are at least three (3) necessary movements we must build if we are to move in the direction of a peaceful and equitable society:

  1.  There must be long-term militant struggle (organizing and strikes) targeting the largest corporations in the country:  Amazon***, Apple, Google, FedEx, McDonalds, and others who employ millions of people in aggregate, and in many ways dictate the nature of labor markets at home and abroad which suppress wages and benefits and in so doing, contribute mightily to the low standard of living in the country; 
  2. There must be a highly developed political movement that contemplates national standards for sustainable living wages and social benefits ($30/hour minimum wages, comprehensive universal health care, public education, housing, retirement, child and adult care, and paid time off for rest leisure, and enrichment.  The “infrastructure” for ending climate change is central to all we do.  
  3.  Building collaborative enterprises.  Many times, I simply refer to this as “learning how to talk to the boss”.

There is a new discussion going on about the future of labor, labor-management relations, labor law, and collective bargaining.  

But, I think largely missing from these discussions is the concept of PURPOSE.

If we are to build a truly sustainable system of labor-management dialogue on a scale that impacts the issues we must confront as a society: climate change, new technologies, racial and ethnic disparities and injustice, improved standards of living for all, and employee voice, the dialogue needs a unifying sense of PURPOSE.

 Experience and history suggest that during times of great transformation of social and economic relationships, be they demographic, geographic, technological, or political, institutional organizations are tested in their ability to successfully meet expectations of their constituents. Collective bargaining as conceived and practiced for the last 80 years is such an institution.

A broader perspective may be illuminating at this point:

James Galbraith’s The End of Normal (James K. Galbraith, Simon and Schuster, 2014) is a helpful frame.

The book explains in great detail a variety of analytical approaches used in the many efforts to understand both the causes of and prescriptions for avoiding the next Great Recession. In that masterful book, he argues that growth as a defining underpinning for how to evaluate economic activity and its value is a notion that must be radically altered.  “He argues that none of the root causes of the Great Recession can be explained by a failure to grow.”

Galbraith argues that the whole notion of growth as the defining measurement of a healthy economy is wrong and certainly unsustainable. He argues instead for slow-growth with an emphasis on measuring economic activity more in terms of how wealth creation and wealth distribution benefit the population as a whole.  Economic activity therefore must be a derivative of democratic ideals.  

In another sphere, the clothing retailer, Patagonia is a leader in the social responsibility realm.  

“We, at Patagonia, are mandated by our mission statement to face the question of growth, both by bringing it up and by looking at our own situation as a business fully ensnared in the global industrial economy,” said Yvon Chouinard, Patagonia’s owner/founder. “I personally don’t have the answers, but in the back of my simple brain a few words come to the fore, words that have guided my life and Patagonia’s life as a company: quality, innovation, responsibility, simplicity.

What is a responsible economy? It’s one that allows healthy communities, creates meaningful work, and takes from the earth only what it can replenish. It’s one where all the indicators currently going in the wrong direction—CO2 emissions, ocean acidification, deforestation, desertification, species extinction, water contamination, toxic chemical release—will even out, then reverse.” (Patagonia, website section on “Becoming a Responsible Company” Baker, MacIntosh-Murray, Pocellato, Dionne, Stelmacovich, and Born, “High Performing Healthcare Systems”, pp. 121-144,Toronto, Longwood Publishing)

  • Patagonia makes it very clear that corporate responsibility is their business.
  • A slow-growth economy for Galbraith is based on building a social infrastructure.
  • The Ryhov health care worker defines her job as serving the population.

If we are to have transformational approaches to solving social problems, these examples of corporate responsibility, economic analysis, and worker consciousness in the workplace suggest that major shifts need to take place in our framing for change, and the central role of the way we think and speak.

It is in this frame that we should discuss collective bargaining.

“My job is to serve the population”.

What does patient-centered, or population-centered care mean for collective bargaining in health care? How are we to understand then the self-consciousness of the health care worker and union member in Jonkoping, Sweden? What did we learn?

 The people who go to work in health care settings face the same challenges most everywhere. No one really wants to be a patient, or in the words of Dr. Sidney Garfield, the founder of Permanente medicine, “no one wants to get sick”.  Costs and budgets are always a factor. The work is stressful and hierarchical. Records must be kept. Patients and their families must be educated. Health care workers must be highly engaged, secure in their employment, and part of a team.

Jonkoping, Sweden is not another planet…the Swedes face the same challenges as everyone else!

Nonetheless the following occurred while we were there on our visit:

After a week of clinic visits, meetings, participation in training classes, dinners, and much discussion with union and management counterparts, we ourselves had a debrief. As we were sitting discussing our experience, unnoticed in the room was Joakim Edvinsson, a registered nurse and improvement advisor and union leader who had accompanied us on much of our visit.  

He overheard one in our delegation say:

“Everything we saw here was amazing and wonderful; but can we take it home and make it work? I am not so sure because this is Sweden, and it is a very different place”.

Joakim jumped up from his chair, no longer unnoticed, and exclaimed: ‘What do you think we are here, some kind of monkey who can just be trained easily to change and do things differently?”. He was agitated and alarmed that our delegation had not learned the lessons of what he calls “our transformation journey”.

In the early 1990’s the Swedish healthcare system was in a state of crisis. It was reported as the worst in Europe. Wait times were at an all-time high. Wait times result in deteriorating conditions, especially among the elderly. Sweden had the most elderly population in Europe as well. Home care was poor and community services were underutilized. All of this contributed to budget deficits at the county level. Then came an economic downturn.

What to do?

The lessons are enormous. The lessons and learnings for what the Jonkoping County went through to transform their system have deep implications for labor-management dialogue. That dialogue is based in both a socio-community and an organizational context.

The hypothesis for change in Jonkoping was and remains based in:

  • Ground the dialogue in the business model
  • Ground the dialogue with the patient/community at the center of the change being sought
  • Let data show the way
  • Develop a common vision for system-level investment in improvement capability
  • Quality drives all strategic planning
  • Integrate improvement knowledge into all education

“I think that one key is that we always start with the value for the patient. Like “what is best for Esther”? We really believe in the Deming thinking that good quality comes with satisfied customers and improved finances and joy in work. It is important that the employees have the mandate to solve problems themselves. 

The importance of the microsystems and the management’s role to support them.” (Mats Bojestig, M.D., Chief Medical Officer and Director, in interview for this paper).

It is very important to recognize that in Sweden, guaranteed employment and all benefits are universal. Further, the budgets for health care are fixed at the national level, left to the administration and execution at the County level.  There is an expectation on the part of the citizens there that they will pay taxes and receive high quality outcomes in return. But, how is such a system sustainable?  

In large measure, the sustainability of the outcomes are based in the collectivized model of learning, quality, and teamwork, or what is called in the language of improvement, the microsystem. (unit based team).  

The success and sustainability in Jonkoping relies in large part on the continuous learning centered in their institute of learning, called the Qulturum.

When our delegation visited the Qulturum for the first time, we observed a class with a wide diversity of workers from the health system…physicians, nurses, technicians, clerical personnel, transporters, and nurses’ aides.  

We, who spoke no Swedish, asked for a translator, but we were told that none would be provided, and there was no explanation as to why. We learned that our hosts wanted us to observe, not listen.

What we observed was that in this first class for many of these workers, they were immediately thrown into a problem-solving mode, shown data and asked to work in groups to develop run charts and a PDSA cycle. It was breathtaking to observe. Translation was not necessary.  

What we observed was: workers using data to solve problems that the patients were experiencing, in this case waiting times.  There was no debate about whether or not it should be done; rather, all the education was grounded in the outlook as expressed by Mats Bojestig as identified earlier: “What is best for Esther”

The microsystems learn to ask seven questions on a continuous basis:

  1. What is the purpose of our existence?
  2. How do we measure?
  3. How do we define the gap between today and the best possible future?
  4. How do we develop connection maps to describe the work that is being done?
  5. How do we identify waste and links that do not work?
  6. How do we prioritize which processes that are in use are in need of most improvement?
  7. How do we integrate improvement work as a natural part of the work day?

“When Goran Henriks, Director of the Qulturum, wanted a model to move to a more patient-driven culture, he invented a hypothetical patient – Esther – and used her story to redesign care across specialties and organizations….They (the clinicians and other healthcare workers in the classes) used Esther as an opportunity to redesign care throughout a patient’s journey, to dive into population-level data and redesign clinical guidelines, and to build a culture of interdependent teamwork, patient centeredness, effective handovers, and reliable information systems”. (Maureen Bisognano and Charles Kenney, Pursuing the Triple Aim, John Wiley and Sons, Inc. 2012, pp. 291-292)

Taking this experience to the U.S. context and specifically in our experience at Kaiser Permanente, we rightfully ask: Does collective bargaining as we know it have grounding in the business model of the enterprise? Do all the participants understand the key elements of the business model?  

Do the parties understand one another’s’ interests? Are efforts made to align those interests? Does the customer’s needs figure into the process?

Sometimes, some or all of these questions are addressed in collective bargaining. But towards what ends?

Collective bargaining in most cases is seen as a dialogue between two parties, the union and the employer. There are rules that govern that process largely known as “mandatory and permissive subjects of bargaining”.

It is as though collective bargaining takes place parallel to the business models in place, or in most cases one party or the other reacts to the relative power which one side uses in the process to gain as much as possible in relation to the business models at play.

The interests of the community and of the consumer are not integrated into collective bargaining even though their interests are central to the business model of the enterprise.

So, we learned much from our observations, and brought it home…

A central part of the right framing must include the nature of the economic and business model that the transformation is based upon if we are to foment and support the transformative structures needed to achieve the benefit of the model.  We saw that an understanding of the business in Jonkoping among all the workers was a central component of learning.  

On April 4, 1945, speaking to the Multanomah Medical Society in Portland, OR, Dr. Sidney Garfield,  talking about what he called his “new economy of medicine,” (70 years ago)responded to the belief expressed a day earlier by another physician who claimed the most expensive thing in a hospital was an empty bed.  Garfield responded: “The most expensive thing in our hospital is a filled hospital bed.”  (History of Total Health, Kaiser Permanente Heritage Resources)

Finally today, after all these decades, United States healthcare delivery is changing its goals and the means to achieve those goals…to reduce cost and improve health.   

The Advisory Board in its report of May 14, 2013 stated: 

“Prepare to transform care, not just reduce it."

To thrive under total-cost accountability, health care providers will need to not just reduce utilization, but transform it: helping patients make the best choices about what types of care they get. In some cases, this means promoting lower-cost care settings: home health instead of skilled nursing facilities, for example. In other cases, patients (and the system as a whole) would be better off from a less-intensive intervention, such as physical therapy rather than surgery.

Care transformation will require tremendous management effort and major cultural upheaval, but the results will be worth it—more effective, less intensive, more responsible care for our patients and our communities.” 

By now, it is well established that what is fundamentally wrong with U.S. healthcare delivery is that payment models in place for nearly 100 years have created almost incalculable waste of precious resources while at the same time leaving much of our population unhealthy compared to the rest of the industrialized world.  

Jocelyn Elders, former U.S. Surgeon General, and many other leaders have referred to our system as a “Sick Care System”, not a “healthcare system. This harsh definition is rooted in the payment system which pays for intervention and treatment AFTER a person becomes ill or injured as opposed to a payment system based on prevention of illness and injury.

The Institute of Medicine estimates that on an annual basis, avoidable spending is at least $775 billion, or more than a third of all healthcare spending.  

For a number of years, we have seen new payment systems in development, but now, after the implementation of the Patient Protection and Affordable Care Act, new payment systems are advancing in both the public (Medicare and Medicaid) and in the private insurance payer systems. The term that best defines and is used more and more frequently is Value Based Purchasing, or payment for outcomes as opposed to payment for services. (“Value-Based Health Care Delivery” Professor Michael E. Porter, Harvard Business School HBS Health Industry Alumni Conference October 18, 2012. )

We have a health care system in the early stages of transformation. We are at the beginning of a demand for profound transformation, yet most health systems are just getting started, and in the labor-management sector of health care, the much needed substantive discussion is painfully slow in coming, if at all!

In the United States, care is delivered largely in the private sector. Overwhelmingly, care settings are in private hands, both not for profit and for profit. And where care is delivered by the public sector at the municipal, county, state, and federal levels, hospitals and health systems remain largely unconnected. 

We still live in a mostly decentralized world of healthcare.

People go to work in each of these settings every day. Their world is largely circumscribed by the facility in which they work with very little interaction or interconnectedness from one facility to the next, even if they are part of a multi-facility health system.

Healthcare is a most hierarchical employment setting as well. There are many layers between the frontline of care and the leadership of the organization. And at the frontline of care, there are many classifications with wide variance in education, responsibility, scope of practice, and experience.  

Departments are rarely connected in any way even though the same patient may travel through a large number of departments in any given stay, including nursing, case management, radiology, laboratory, pharmacy, respiratory therapy, admissions, business office, and more.

This is a brief sketch of the system that is on the brink of fundamental transformation.

Employee engagement and productivity in U.S. healthcare are huge obstacles!

Employee engagement remains very low in health care. 

In Towers Watson’s most recent global workforce study, less than half (44%) of the U.S. hospital workforce overall was highly engaged. That leaves a large proportion of employees across all workforce segments feeling somewhat disconnected from their hospital system and its goals, and unsupported to some extent in doing their jobs well. (Harvard Business Review, Rick Sherwood October 30, 2013.

Productivity in health care remains much lower than in manufacturing and other sectors of the economy as well. (Robert Kocher, MD and Nikhil R. Sahni, New England Journal of Medicine October 13, 2011, Vol. 365, pp. 1370-137

The pressure is on.

Public and private payers are demanding value.

Health systems are struggling to transform their delivery models to meet the changing business model.  

The workforce is largely disengaged in the meaningful ways it must be engaged for the systems to improve performance.

Successful employee engagement strategies remain few and far between in healthcare. The topic of employee engagement is central to the conversations among most if not all healthcare executives.  

There is a growing trend among health care systems to look to manufacturing for answers to the challenge of improved quality, improved patient satisfaction, improved efficiency, and improved employee engagement.  There is a rapidly growing interest in LEAN approaches to healthcare improvement. By adopting LEAN, some systems have been very successful in attaining meaningful and sustainable improvement in key measures.

Most have not.

We know from the literature and from practice that LEAN is not a tool…rather it is a culture change based on leadership, investment, and a fundamental shift from management by outcome to management by design. LEAN is an outgrowth of the Deming theory and practice where quality drives all outcomes.

Essential to the success of LEAN systems is the empowerment of the frontline staff.  Such empowerment is comprehensive, not incremental or “too-based”. Such empowerment is exactly that, whereby the strategy for success is rooted in the ability of the frontline to achieve improvement measures from their daily environment, improvement measures which they decide on based on continuous structured dialogue up and down the organizational structure of the system.

For our purposes, charting the course toward success in the new business model of health care is a complex social and organizational journey.

There are 2 million unionized health care workers in the U.S. They work in all care settings private and public. The majority work in hospitals.

Given the enormous pressure on health systems to adapt to the new payment and care models and the need to substantially improve the engagement of the employee in the industry, we must ask what role collective bargaining could or should play in this time of transformation? We must also ask who will lead in such changes. How will such changes occur?  

It would seem that if the unionized sector could lead in the successful transformation of health care to a successful value-based model, it would be a revolutionary moment for collective bargaining in the U.S.