Kaiser Permanente plans to save money by terminating its entire gardening crew

Philip E. Osmond, 58, has committed the last 24 years of his life to working as a gardener at Kaiser Permanente Oakland Medical Center. Last month, he received notice that his position would be eliminated effective June 7.

Late last year, Kaiser Permanente officials announced plans to lay off the entire gardening crew in their Northern California region in an effort to save money. Gardeners would be replaced by landscape contractors, possibly displacing 60 full-time workers from their jobs.

When asked about the future of those full-time workers, Kaiser spokesperson Jonathan Bair responded by emailing a statement from John Nelson, the company’s vice president of communications. In it, Nelson states that the company “has a proven track record of re-deploying the majority of our employees impacted by job changes to other positions within our organization. Not only do we offer retraining and reassignment, but if for some reason redeployment isn’t feasible, we provide our staff with up to one year of full pay and benefits.”

But Osmond worries there are a limited number of jobs available to him within the Kaiser system that match his skills and experience. While there may be openings, he said, it’s not certain if those positions pay as much or provide the same full-time hours he currently receives. “What guarantee is a year to finding another position?” he asked.

Osmond feels he’s been loyal to the company for decades, but doesn’t feel that loyalty is being reciprocated. With a wife on disability, Osmond is feeling the pressure. “I’d like to remain with Kaiser,” he said, but with many positions requiring a certain level of experience, much of his future hinges on whether that experience can be waived.

“Within the next 7 or 8 years, I was planning on retiring, and the expectation after 24 years on the job was that I was going to make it to retirement,” he said. “Now, there’s absolutely no guarantee that’s going to happen.” If Osmond ends up getting laid off, he said postponing his retirement is certain.

SEIU-United Healthcare Workers West, a union that represents 55,000 Kaiser workers across California, ranging from interpreters to cooks, has been fighting the company’s decision to outsource its landscaping positions ever since the proposal was announced in September. Sean Wherley, a media relations specialist with the union, said using contractors won’t actually save any money for Kaiser and may even end up costing the company more in the long run.

“They don’t do the same quality work. In fact, they damage the equipment, so now that’s costing them. And they don’t have to pay them the same wages and benefits, and the turnover is going to be constant. How is that going to be any better for Kaiser?” he asked.

Kaiser Permanente is made up of three branches. One is an insurer, the Kaiser Foundation Health Plan, Inc. The other two parts are medical service providers: the Kaiser Foundation Hospitals and its subsidiaries, and the Permanente Medical Groups. While the health plan and the hospital chain are both non-profits, the Permanente Medical Groups includes for-profit partnerships with independent physicians.

Union officials dispute the idea that this giant consortium needs to cut costs. According to Kaiser’s financial summary, published in early February on their website, the non-profit Kaiser Foundation Health Plan and Kaiser Foundation Hospitals entities earned a net profit of $2.5 billion in 2018.

In a press release issued in early March, union officials wrote that the health giant has “$31 billion in reserves” and “profits of $6.3 billion over the last two years.” Wherley said Kaiser is choosing to “save $2 million a year by eliminating these jobs”—a small slice of the $2.5 billion in profits they made last year.

When asked why a company as profitable as Kaiser is making cuts, Bair emailed another statement from Nelson. It read: “As a non-profit organization, all our revenues go into providing high-quality, affordable health care and to improving the health of our members and the communities we serve. We are all here for our patients—not to earn a profit or pay shareholders. Kaiser Permanente, like other health plans, maintains financial reserves to cover our obligations if something unexpected were to occur or if regular business was interrupted. Further, our reserves are more than a traditional health plan because we are more than a health plan. Our reserves support our hospitals, medical offices, employee benefits (including pensions), and other elements of our integrated model of care that other health plans do not have.”

Bair also noted that $2.5 billion in revenue “represents revenue across the nation, not just in California.”

But Wherley said Kaiser will be failing to do right by Oakland’s community members if they go through with these layoffs, arguing that “Kaiser is a non-profit, so they don’t pay property or income taxes, and they do that with the understanding that they are going to serve the community. How are they serving the community when they lay off 60 people across the region?”

Despite the uncertainty of his job’s future, Osmond gets up each morning for his 8 to 5 shift. His day-to-day tasks include picking up trash around the facilities, maintaining lawns and washing down the sidewalks. He said he and his crew work 7 days a week. Sometimes they come across lost patients walking about the campus and have to escort them back to their room, or they find a family member crying in one of the gardens, to whom they offer solace.

“They’re going to be outsourcing work to a contractor who’s not going to bring anybody with those same skills, the same dedication to the facility, the members, and the patients that we deal with on a daily basis,” said Osmond. “It’s frustrating.”