Governor, UPW reach settlement over Maui hospitals
STAR-ADVERTISER / JULY 2015
Maui Memorial Medical Center in Wailuku will be run by Kaiser Permanente as early as November.
Gov. David Ige and a union representing more than 500 Maui County hospital workers have reached a settlement in negotiations involving the transfer of the state-run Maui Memorial Medical Center, Kula Hospital and Clinic and Lanai Community Hospital, to Kaiser Permanente.
The state and the United Public Workers will jointly ask the 9th Circuit Court of Appeals to lift its injunction halting the privatization and dimiss the union lawsuit, Ige announced at a news conference today.
Key points of the signed agreement include:
>> The Maui hospitals will be transferred from Hawaii Health System Corporation management to Kaiser no earlier than Nov. 6.
>> The Maui hospitals will be operated and managed exclusively by Kaiser.
>> UPW bargaining unit employees will work under Kaiser supervision, while still being covered by the UPW collective bargaining agreements until their contracts expire on June 30, 2017.
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>> Kaiser will offer all UPW employees jobs for at least six months after their contracts expire.
In June 2015, Ige signed Act 103 into law, initiating the transfer of the three Maui County hospitals to Kaiser.
UPW sued the governor in an attempt to stop the transfer, arguing that the privatization violated the U.S. Constitution’s contract clause because the administration was seeking to complete the transfer before a union contract expired on June 30, 2017.
The contracts, which covers blue-collar workers, regulate a range of employment conditions, such as wages, work hours, holidays, sick leave and fringe benefits.
In May, the 9th U.S. Circuit Court of Appeals temporarily suspended the transfer until September 30 to give the parties a chance to come to an agreement as to how to address any harm that workers might face as a result of the privatization.
The settlement announced today is expected to end the UPW lawsuit, however, additional legal challenges remain.
Earlier this week, the Employees’ Retirement System filed a lawsuit in Oahu Circuit Court to block a law passed this year that provides severance benefits to union workers who lose their state jobs, even if they are hired by Kaiser. The measure was backed strongly by the Hawaii Government Employees Association, a union that represents another 900 Maui County hospital workers.
Ige had vetoed the measure, arguing, in part, that it put at risk the tax-exempt status of the ERS, a defined public pension plan. However, the Legislature overrode Ige’s veto last month.
The ERS lawsuit seeks a court injunction, halting the implementation of the law until the ERS can get a ruling from the Internal Revenue Service as to whether the measure would indeed result in the pension plan losing its tax-exempt status.
If this were to happen, the lawsuit claims that it could be “catastrophic” to the ERS and its 120,000 members, which include current and retired state and county workers.
9 responses to “Governor, UPW reach settlement over Maui hospitals”
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With all of these law suits, the State should consider cancelling the Kaiser contract and close the State Hospital and let the Maui private clinics serve the Island.
Yes, it would have been cleaner for Kaiser to invite the existing workers to apply for jobs with new management, rather than trying to work out a deal with the sour bitter union thugs.
Wow. Big win for the governor.
Indeed. A rare win over the unions.
Makes you wonder what did the Governor give in return!
I wouldn’t consider it a win for the governor or a lost for the union. In my opinion what happened here should be an example of how the employer and the union put aside their differences and addressed what was the highest of priorities. In this case it was making sure that the medical services for the people of Maui was preserved and the displaced workers would be given time to adjust to the lost of their jobs. There are no winners in this situation. For those of us who are fortunate to live comfortable lives, let us not forget that times have changed and the challenges are more brutal. When opponents can agree to put their differences aside for the common good of all parties involved then all is good. This can only happen in Hawaii if you were raised to respect everyone no matter what color or creed. I can only give praise to to the UPW who were willing to sacrifice the toe to save the body.
What a sweet deal for the UPW workers. I hope this means that should they decide retire, they would not be eligible for the early retirement benefit covered in SB 2077.
IGE HAS A LONG WAY TO GO TO CLEAN UP ROZ BAKER’S MESS
Keep in mind, this deal with UPW does nothing about the looming disaster from Maui senator Roz Baker’s bill to give generous payouts to the 1,500 hospital employees on Maui (SB 2077). In her floor speech during the recent special session on her bill, Baker claimed that overriding the governor’s veto of those payouts was the only way to ensure quality health care services. “I’m thinking about the overall health of all our residents and visitors who come to Maui,” she said.
Given Baker’s repeated inability to grasp the important financial impacts of her policy decisions, we should look past her claims and consider the forseeable costs, as Governor Ige has tried to do:
1. Immediate Costs to Taxpayers:
The people of Oahu will fund close to 80% of this reckless payout, estimated to be between 25 and 80 $million, but we will get zero benefit. My estimate is that it will cost over 100 $million. There is no funding for this in the current budget.
2. Future Costs to Workers:
Baker’s sweetheart deal for these Maui workers will end the tax-exempt status of their retirement system (Hawaii’s ERS), forcing all of the 120,000 vested government workers and retirees on Oahu and throughout the state to pay far more over time. Government employee retirement contributions will have to be included in the employees’ income and taxed as normal wages. Employees will also lose the ability to roll over their retirement contributions, tax-free, to other retirement plans, such as IRAs.
3. Future Costs to Taxpayers:
With fewer contributions available to feed the ERS, it’s unfunded liabilities will grow, requiring future bailouts by ordinary taxpayers.
4. Costs to Healthcare Workforce:
The issue that has been least understood in all of the discussion of Baker’s bill is the likely impact on the healthcare workforce. Will it really improve healthcare on Maui? There is reason to conclude it will do the opposite and worsen the shortage of doctors, nurses and other clinicians and technicians. The sad fact is that for many healthcare workers on Maui, their job has become a disappointing and stressful necessity. They continue working mainly to pay off loans and day to day expenses and to fund their retirement needs. Giving out sizeable lump sum severance or early retirement payments, with no requirement to continue full-time clinical practice on Maui, will allow many of them to more easily leave the island, retire early or pursue other interests, and many will do so. This will harm access to care, and it is forseeable.
I don’t know if Roz is incompetent, ignorant or just too cynical to care, but she repeatedly takes the lead on ill-fated legislation, such as the unraveling of her UH Cancer Center funding plan, her wasteful Kihei High School trophy project, the fiasco with the Hawaii Health Connector she created, the tragic deaths from her lowering of dental licensure standards, etc… Hundreds of $millions have been misspent, state agencies have been thrown in turmoil and lives have been lost. And BTW, the dispensary system she helped set up isn’t looking too good either.
Meanwhile, the Senate committees Baker has run for years have provided absolutely no oversight of health plan networks in Hawaii. On top of all these policy disasters, she is rude to the public and has the reputation as a bully who cares mainly about protecting big business.
Looking to the facts, it appears the SB 2077 payout bill is Baker’s latest blunder. It will mainly benefit hospital workers on Maui, but is going to cost all the other people of Hawaii, especially those of us on Oahu, and it is likely to harm healthcare on Maui. At some point, all this has to catch up to her, doesn’t it?
She probably doesn’t care as the voters keep putting her back in office…..