Thursday, June 26, 2008

Which side are you (really) on?

Over the last few months, I have set forth the "playbook" that is used by the SEIU (Service Employees International Union) when it is running a corporate campaign against an employer to try to extract concessions in the union organizing process. Now, I want to present you with a recent example of the tactics that are employed.

CareGroup, which is the holding company comprising BIDMC (and BID~Needham), Mt. Auburn Hospital, and New England Baptist Hospital recently successfully sold about $500 million in bonds. See below. These bonds were issued under the auspices of the MA Health and Educational Facilities Authority (MA HEFA), which is the designated public agency for coordinating the issuance of tax-exempt bonds by schools, hospitals, and other non-profit entities in the state.

The proceeds of the bonds will be used for a number of purposes, including financing a new wing of Mt. Auburn Hospital, a variety of capital improvements at NE Baptist, new patient rooms and an expanded emergency department at BID~Needham. In addition, proceeds were used to refund variable interest auction-rate securities that, because of turmoil in the capital markets, had seen dramatically increased interest rates. Like many other institutions, CareGroup was seeking to replace those bonds with more secure fixed-rate securities.

SEIU appeared at MA HEFA and tried to interfere with the issuance of these bonds. Oh, not by directly saying they should not be issued, but by presenting misleading and inaccurate arguments about our hospital's finances and accounting procedures and auditing processes procedures in the hope of derailing the approval. Fortunately, the highly professional staff and board at MA HEFA found no merit in SEIU's arguments.

Then SEIU tried to stop the Governor's office from signing off on these bonds. The Governor has to sign an affirmation called a TEFRA (Tax Equity and Fiscal Responsibility Act of 1982) certificate, that the bonds are consistent with the public standards of tax-exempt financing. Fortunately, the professional staff in the Executive Branch conducted their own due diligence, and the certificate was signed. (As I recall, in all these years, a Governor has only once turned down a request for financing once it has been approved by MA HEFA.)

I have mentioned below that SEIU tries to arrogate to itself the powers and authority of designated public agencies. It uses the argument that it is a concerned player in the health care arena, specifically noting its interest in "healthcare costs and accessibility," and therefore has a right or obligation to intervene in these matters.

Let's be clear. SEIU's rights and obligations are not the issue, and we should not be distracted on that point. However, its actions belie its words. If SEIU has a real concern about the cost and accessibility of health care, how does that square with its attempts to derail bona fide financial transactions that seek to expand access to health care facilities and stabilize or reduce their costs? And, notably, when its arguments were not persuasive in a public forum in front of a state agency, it attempted to use behind-the-scenes influence in the Governor's office.

This is not the first time SEIU has intervened in such matters. It has done so elsewhere in the country when it is engaged in corporate campaigns.

SEIU may seek to change the topic, saying this is about changing the process by which unions are certified. That is an issue that will continue to be debated. But the manner of seeking such change matters, and it matters a lot. When the union itself tries to undermine the mission of hospitals, particularly those non-profit hospitals governed by community leaders, it does so at the risk of harming those very purposes it purports to espouse.

There have been many reports about the huge amounts of dollars being spent by the SEIU to influence races for elected offices throughout the US, from local to national elections. (Here's but one example.) When are reporters going to start asking the question of those candidates receiving support: "Do you agree with the tactics used by the SEIU in conducting corporate campaigns against hospitals?" And, "What promises have been made in return for those donations?"

As a friend of mine recently wrote to his local elected representatives:

"As your constituent, I received the flier from SEIU thanking your help for the union's organizing PCAs (personal care assistants) in Massachusetts. I know it's nice as an elected official to get a no-cost endorsement mailed to your constituents.

"But, is the mailing really at no cost to you, in terms of your ongoing political judgments? I read today in the NY Times that SEIU is setting up a $10 million fund to punish elected officials who fail to maintain pro-union positions. Are you now in the position of having to say yes to SEIU every time they come in the door?"

13 comments:

j greenbaum said...

It is deeply disturbing to learn of the depths to which the SEIU will sink in an effort to forward their own agenda. Their attempts to derail your financing for no purpose other than demonstrating their power reveals a contempt not only for the employers who they oppose but for the members they purport to represent.

Anonymous said...

Thank you for your frank and gusty exposures of SEIU -- and for the warnings you've given the rest of us on their playbook. As one who works in health care communications at a hospital network that has become a target of SEIU, I'm often frustrated by how little we can say and how carefully we must say it for fear of getting crosswise of the NLRB. I too am waiting for journalists to ask at what cost do they align themselves with SEIU.
Please keep it up.

e-Patient Dave said...

I unsubscribed to all MoveOn.org mailings because of their getting in bed with SEIU and calling them "progressive." I wrote to them clearly stating my concern - months ago - about their power tactics and the probability that any support from such a group would come with nasty demands later.

I quoted JFK's inaugural address: "remember that, in the past, those who foolishly sought power by riding the back of the tiger ended up inside."

Now we hear about the "accountability fund." Who would have thought the strong-arming would start now?

Obama, be very, very careful. If they'll stop at nothing to gather power (including outright lies about good organizations that actually live progressive values), imagine whose pocket you'll be in after the election, and how uncomfortable it might get.

This scares me, actually. How eerie that in 2005 the SEIU quit the AFL-CIO... in tandem with Jimmy Hoffa Jr's Teamsters.

I've written to the Obama campaign, too. No response from MoveOn or them.

I wonder if Obama knows, and if not, who can reach him.

bi-patient said...

What is really remarkable to me is the complete lack of commentary on this topic by the other Boston hospital CEOs and healthcare players like the insurance companies, etc. Doesn't this impact them, too? I find it very strange that people seem to be so cowed.

nasov said...

A long time ago unions were essential. In some industries, maybe they still are. But If I really cared about worker conditions, I would move somewhere else in the world. Unionization of well treated workers is a waste of everybody's time and money, MOST OF ALL the workers. Imagine having to pay dues that you know are going to politicians you may or may not support. THAT ought to be illegal.

I guess I don't trust any union in a suit and tie.

Please keep it up. Let the others sit around and let this happen like they always do. Well done.

Anonymous said...

Accurate and to the point (having worked on some of these issues). I agree that it is a sad comment on the media when issues such as this do not get the public attention they deserve. Let's hope blogs such as this become more and more effective.

Rand said...

This blog is a one-sided -- and predictable -- chorus for management. You are dodging the real issue: All workers must be able to make a free and fair decision about forming a union. In health care, it's especially important that management tactics don't distract anyone from providing quality care and that no scarce health care dollars are wasted by hospital management on interfering in a decision that is only up the workers to make.

Boston's hospital management has a long and sordid history of illegally interfering in union elections and of spending enormous sums of money to prevent workers from having a real voice at work.

Because of that shameful track record, SEIU's efforts are absolutely necessary. (Full disclosure: I know first hand about management's behavior because I worked as a health care organizer from 1999 to 2004.)

Gerry said...

The Union is certainly not on the side of patients, the health care system or society in general. Attempting to kill the bond issue is an attempt to keep the hospitals from expanding, providing health care and, perhaps most important, keeping jobs from expansion. This negatively affects their own interests, the interests of other unions and the interests of the state in creating jobs!

Paul Levy said...

Well, Rand, you did exactly as I predicted:

"SEIU may seek to change the topic, saying this is about changing the process by which unions are certified. That is an issue that will continue to be debated. But the manner of seeking such change matters, and it matters a lot. When the union itself tries to undermine the mission of hospitals, particularly those non-profit hospitals governed by community leaders, it does so at the risk of harming those very purposes it purports to espouse."

Your comment suggests that you believe that the means justify the ends. Odd, in that this is the very kind of rationalization against which you are arguing with regard to purported management behavior.

e-Patient Dave said...

Rand, you have no idea what you're talking about. Do you realize, this makes you and SEIU look ignorant? (I'm guessing this is Rand Wilson.)

Anyone who reads this blog (which you apparently claim to, since you assert you know what it is) knows that it's a one-sided chorus for improvement of healthcare, without a whit of suppression of anyone. If you disagree, go find me a set of posts that prove your assertion.

You know, you do such an injustice to all of organized labor when you spray accusations in places where they simply don't belong. Do your homework! Like: since you assert that management here is interfering with patient care, can you tell us what the SPIRIT program is and list ten of its achievements in its first months, then say who initiated it?

Can you name which hospitals in Boston are so committed to care quality that they're posting their own error rates and openly disclosing the processes they're using to improve, for all (including competitors and all workers) to see?

Have you ever been in a hospital and undergone a procedure (central line catheterization, in my case) that you've read about on a blog, and discussed with the doctor and nurse the shared initiative that's underway to reduce infections?

If you haven't, then what the hell are you talking about?

Careful with your answer - thousands are watching. Maybe even some columnists.

Anonymous said...

The SEIU are a despicable group. Their arrogance in health care matters are astounding. I'm curious if they were always like this??

Anonymous said...

Union interference with hospital financing isn't the worst of it. I worked at a hospital where the union (1199) did everything in its power to disrupt our quality improvement initiative because it threatened their hegemony over work flow. 1199's answer to every quality issue was "hire more union workers". They prohibited union members from discussing work flow issues without union leaders present. This killed the improvement process, because union leaders prioritized preservation of union jobs, rather than quality, safety or cost. It also cut off the flow of ideas from line workers, to the detriment of the improvement initiative and worker satisfaction. Hospital management cut a Faustian bargain and allowed this to happen to the detriment of the safety of their patients. Unionization poses the greatest threat to improving the quality of the health care system. Health care needs leadership like you, Paul, with courage and vision.

Anonymous said...

The voice and influence of health care safety and quality organizations, such as Institute of Healthcare Improvement, and of academics and insurance providers on the problem of quality of care has increased dramatically in the last decade. If union hierarchies suppress innovative quality improvement from management or from the ranks, are these organizations silent on the matter? Safety and efficiency of care are central to the Institute of Medicine's reports on hospital improvements. Are there data comparing the quality of different labor structured hospitals? Such data would reveal the ruse.