DENVER (CN) — The anesthesiologist who headed Kaiser Permanente’s transformative staffing cuts in Colorado told a federal judge on Thursday that the reductions saved the business after it lost $240 million in 2018 and was at risk of collapsing.
“Failure was an option,” Colorado Permanente Medical Group anesthesiologist Gregory Berman testified. “We were facing the possibility that 500,000 Coloradans would no longer have health insurance from a nonprofit.”
To make up for a 20% decline in enrollment, for-profit health care provider Colorado Permanente Medical Group worked in tandem with the nonprofit insurer Kaiser Foundation Plan of Colorado to open a “transformation office” in 2019. That ultimately led to a 20% reduction in health care staff on the eve of the Covid-19 pandemic.
The staffing reductions ultimately prompted the United Food and Commercial Workers International Union Local No. 7 AFL-CIO to sue the health care companies in October 2021, claiming resulting drops in quality of care violated their collective bargaining agreement.
The union represents 22,000 workers in Colorado and Wyoming, including 2,000 nurses and other health care professionals at Kaiser Permanente.
Since 2000, the union’s agreement has tasked Kaiser with providing “sufficient staffing to address quality of standards of patient care and provider workload including safe coverage.” The union claims Kaiser’s staff cuts left critical gaps in urgent care, pharmacy and behavioral health services.
Kaiser countersued the union in 2022, arguing UFCW breached its own contractual obligation to help resolve staffing issues. Kaiser also claims the union’s staffing complaints belong in arbitration, not in federal court.
U.S. Judge William Martinez, a Barack Obama appointee, declined to enter summary judgment on behalf of either party last summer, paving the way for a bench trial to determine which party violated its contract with the other.
That was an issue, Martinez said, that he could not determine from legal briefs alone.
After the union rested its case on Wednesday, Kaiser argued for a directed verdict, which Martinez took under advisement.
As Kaiser’s second witness, Berman said he was proud of efficiencies he helped implement. He pushed back against the notion that staffing reductions reduced the quality of care provided.
“I’m proud of the care we deliver and the model of care we give that is fairly unique,” Berman told the court.
Representing Kaiser, attorney Laurene Rogers called labor-relations consultant Stephanie Price to the stand to describe the 632 grievances union members have filed against the company since “the transformation.”
Rogers practices with the Denver office of Holland & Hart.
“California has nearly 40,000 unionized healthcare workers and received nine grievances for every hundred employees, while Colorado has 1,700 unionized workers and received 22 grievances for every hundred workers,” Price testified.
On cross-examination, union attorney Claire Poundstone asked Price whether she ever felt harassed in her role reviewing company grievances. With a chuckle, Price described the volume as large.
“Put another way, Kaiser is alleged to have violated its collective bargaining agreement 632 times, is that right,” asked Poundstone, who practices with the Denver firm Dianne Sawaya.
Before wrapping, Poundstone questioned Price about discrepancies between her description of the struggle to hire people during the pandemic and a recent press release touting the company’s ability to withstand the worst.
“Since the pandemic, we have had no difficulty in recruiting and hiring hundreds of staff into our organization here in Colorado,” a company spokesperson said in a release published Jan. 10. According to the statement, Kaiser’s turnover rate of 6.7% in Colorado is lower than the national average of 14%.
Upon learning of the publication, Martinez warned both parties to be cautious of what they said until the close of trial, lest they influence upcoming witnesses.
The trial is scheduled to run through Thursday, Jan. 23.