1933-1945: ‘There is no such thing as labor relations’

The health care program now known as Kaiser Permanente began in the Mojave Desert when Dr. Sidney Garfield, fresh out of medical school, opened a clinic for 5,000 Colorado River Aqueduct workers in 1933. Dr. Garfield soon found his practice foundering because insurance companies were sending the most serious—and most profitable—cases to Los Angeles hospitals. He developed a prepaid plan with a focus on safety and illness prevention, and it worked. The hallmarks of what would become the Kaiser Permanente Health Plan—prepayment, prevention and group practice—were forged here, but it would be 12 years before members of the public could join.

In 1938, Henry J. Kaiser and his son Edgar persuaded Dr. Garfield to create a similar medical program for workers building the Grand Coulee Dam in Washington.

The resulting industrial health plan was so popular, the unions insisted dam workers’ families be included. That feature carried over when Dr. Garfield built the largest civilian medical care program on the World War II home front, covering almost 200,000 Kaiser workers in California, Oregon and Washington.

With the traditional labor pool—young, healthy white males—serving in the military, thousands of African Americans and other people of color migrated to the shipyards, securing good union jobs after the long hurt of the Great Depression. Women came out in force, too. The Permanente Foundation Health Plan, both the on-the-job care and the broad coverage of the 50-cent-a-week supplemental plan, was extremely successful.

For the first time in their lives, ordinary people could count on affordable medical care.
 

1946-1989: ‘If not for organized labor’

On July 21, 1945, with the war in Europe over and the shipyards beginning to close, the Permanente Foundation Health Plan opened to the general public. A year later, on Aug. 1, 1946, Dr. Garfield signed the Permanente Foundation’s first union contract, with the CIO-affiliated Nurses’ Guild. The contract, in a first for Alameda County hospitals, established a 40-hour workweek, down from 48 hours.

Key support for the Permanente health plan came from unions. Harry Bridges, president of the International Longshoremen and Warehousemen’s Union, was an early advocate. He defended the plan against attacks by professional medical associations, whose members called prepaid group practice unethical, and brought all 6,000 ILWU members on the West Coast into the plan. Almost 15,000 members of the Retail Clerks Union in Los Angeles, a large and prominent union led by Joe DeSilva, joined in 1951.

But by the mid-1960s, financial pressures began creating divisions. In 1966, registered nurses in Northern California, represented by the California Nurses Association, became the first nurses in the state to conduct a work action. Major strikes erupted in 1968 in both Northern and Southern California. The strife simmered, and in 1986, a seven-week strike by SEIU Local 250 had some 9,000 clerks, certified nursing assistants and technicians walking the picket line at 14 Kaiser Permanente facilities in California. The action didn’t prevent a two-tier wage restructuring plan, but there was one positive outcome: The first Joint Conference on Service Issues, a precursor to the Labor Management Partnership agreement.