Ken Robbins had never seen a labor organizing effort like it: Instead of a traditional grass-roots drive to recruit members, a union in Illinois launched a series of very public attacks to discredit and embarrass a hospital. The goal: to pressure hospital executives to stay out of the way as the union signed up nurses and other employees.

The tactics bewildered Robbins, president of the Illinois Hospital Association. Wasn’t it self-defeating, he asked a union leader, to try to weaken an employer where you already represent a fair number of workers and hope to represent the rest?

“I’ve known the guy a long time, he’s a  very solid guy,” Robbins says. “He just told me, ‘Ken, I know it doesn’t make sense—but it works.’ ”

The strategy—known as a corporate campaign—is now the linchpin of union organizing drives at hospitals around the nation. Unions use public events, political connections, the media and other avenues to bring into question a hospital’s quality of care, the level of charity care it provides and, in the case of a not-for-profit hospital, its tax-exempt status. Unions often recruit local consumer activists, neighborhood groups, and religious and environmental organizations to ramp up the pressure.

The campaigns might run for months or even years, interfering with a hospital’s ability to conduct routine business

And they can get very personal. In some cases, union representatives have shown up in front of hospital executives’ homes to picket.

Places like New England, Illinois and California have witnessed bare-knuckle corporate campaigns that bloodied the reputations of hospitals and their top managers and got the attention of health care executives throughout the region. But leaders in the field worry that hospitals in general are not prepared for such a siege—or worse, they think it couldn’t happen at their facilities.

“In states where unions haven’t played a big role yet, a lot of CEOs really aren’t aware of just how bad it can get,” says Jan Emerson, vice president of external affairs for the California Hospital Association. “They may sort of be aware of what’s going on around the country, but in terms of just how ugly it can get, they don’t have any idea.”

A December report by IRI Consultants to Management, a Detroit company advising health care systems, backs up Emerson’s assertion. In the report examining labor activity in health care from June 2004 through June 2005, only 25 percent of responding hospitals said they were “very concerned” about potential union organizing at their facility in the future. Seventy-five percent said they were not concerned at all or only somewhat concerned.

Such complacency is a dangerous mistake, warns IRI President Jim Trivisonno. “If this isn’t a C-suite issue, it should be—or they’ll be sorry,” he says.

A Juicy Target

The nation’s 6 million to 7 million health care workers hold an obvious allure for unions whose membership is plummeting as manufacturing jobs move overseas and younger American workers appear less inclined to join. In 1953, nearly one-third of the workforce was organized. As of last year, 12.5 percent, or one in eight workers, were union members, according to the Bureau of Labor Statistics. When looking at private, nongovernment workers alone, 7.8 percent of workers today are unionized.

“Hospitals are an easy target—you can’t change a bedpan from Sri Lanka,” says Jarol Manheim, a professor of media and public affairs at George Washington University in Washington, D.C. “The demographics of that group match up very well with the places unions have traditionally shown strength.”

Perhaps the most aggressive union in this battle for health care workers has been the Service Employees International Union. SEIU officials, however, object to characterizing its organizing strategy as a corporate campaign. Rather, they say they want to partner with employers to reform and improve health care.

“The industry calls that a corporate campaign. That’s not what we think it is,” says Mary Kay Henry, executive vice president of SEIU’s hospital division. “When employers make a different choice and decide to waste precious health care dollars on fighting workers’ decision to form a union, we just use all the relationships necessary to convince them to take the other path.”

The Battle Within

Whatever SEIU calls the strategy, unions are getting more sophisticated in their tactics and they are relying on a common playbook from coast to coast. Hospital executives from California to Connecticut have lived through similar very public attacks on their institutions’ credibility.

The strategy became clear in 1999, Manheim says, when SEIU managed to pit the National Conference of Catholic Bishops against the nine orders of nuns that operate Catholic Healthcare West, a 40-hospital system based in San Francisco. SEIU accused CHW of blocking workers from joining a union, which, it charged, violated church doctrine calling for “socially just workplaces.”

SEIU made two demands common in corporate campaigns: a neutrality agreement to prevent hospital leaders from taking any stand on unionizing efforts, and a so-called card-check election. Card-check elections circumvent the standard election process in which workers interested in joining a union petition the National Labor Relations Board, which then oversees a blind vote of employees. Instead, workers can simply sign union pledge cards and, if a majority do so, the employer agrees to recognize the union.

The nuns agreed that every worker should be given the opportunity to join a union, but that they should be allowed to hear all sides—including management’s—before deciding. Monsignor George Higgins, who for 45 years counseled the nation’s bishops on labor matters, was widely quoted as saying the nuns were wrong for hiring what he called an antiunion consulting firm, and the bishops conference developed guidelines on dealing with labor issues at church-owned hospitals.

“It actually split the church over its own teaching, and the bishops basically imposed their view on the company,” Manheim says.

After more years of mounting union pressure and corporate campaign tactics, CHW signed a master bargaining contract with SEIU that covers its hospitals in California and Nevada.

Politics and Money

Taking their message to influential power brokers—be they lawmakers or finan-ciers—is another play that unions are having significant success running.

While some may consider it on the fringe of a corporate campaign, nurse unions make the broad argument that quality of care is suffering at the nation’s hospitals and one way to rectify the situation is by legislating nurse-to-patient ratios.

The California Nurses Association aggressively pushed nurse-staffing ratio legislation in California. The law was enacted in 1999, but in 2004, Gov. Arnold Schwarzenegger imposed a moratorium on a portion of the law. That prompted the CNA to conduct protests at his public appearances and at the headquarters of the California Healthcare Association and elsewhere, and to dog Schwarzenegger with television and print ads. The moratorium was lifted in 2005 by a state judge.

Taking a cue from California, nurse unions in Illinois, Massachusetts and elsewhere are actively lobbying lawmakers to pass staffing ratios. In a sample letter to state lawmakers, the Massachusetts Nurses Association suggests that its members say, “Hospitals have had the flexibility to self-police staffing levels for years, but have chosen not to. The hospitals’ budget amendment simply maintains the status quo and sets no limits on the number of patients a nurse is forced to care for at one time. Please oppose this attempt to thwart real patient-centered reform.”

Political leaders are not the only power brokers that unions try to influence. Payers and financial markets are also prime targets.

Sutter Health in Sacramento is the lone holdout to SEIU organizing efforts among California’s big health care systems. At the heart of the dispute is Sutter’s refusal to grant the union a master contract. Master contracts cover workers at all hospitals in a health system rather than forcing the union to organize facility by facility. SEIU has master contracts with Kaiser, CHW and Tenet. Sutter says a master contract would deprive its 26 hospitals of the ability to negotiate based on local conditions.

SEIU has carried out an intense campaign to make Sutter cry uncle. For instance, it persuaded the California Public Employees Retirement System to grill Sutter on price and quality issues. In 2004, CalPERS, the largest purchaser of health care in the state, cut 13 Sutter hospitals from its Blue Shield of California HMO network. The union also issued reports claiming the system overcharged uninsured patients and used overly aggressive bill-collection practices; it urged the state to strip Sutter of its tax-exempt status. The union also sent letters to donors urging them not to contribute money to Sutter hospitals.

On another front, SEIU tried to stop Sutter from issuing bonds for a series of repair and improvement projects, and distributed news releases to investors to discourage them from buying the bonds. That effort failed, but not without inflicting some pain, says attorney Roger King, who heads the labor and employment practice of law firm Jones Day. “The financings ultimately went to market, but something like that turns into a cost of doing business,” King says. “And it could have an impact on the premium the bond sells for.”

In 2005, SEIU proposed an ordinance that the Sacramento city council create an authority to manage how hospitals spend their money and care for patients, and to oversee approval of renovation or new construction projects—including a $456 million Sutter project in the city, which the union was attempting to block. The proposal included a provision prohibiting hospitals from spending patient care money to fend off union organizing. The city council rejected the ordinance and approved the project.

“Corporate campaigns are about preying upon and exploiting organizational weakness and vulnerability. If a union can’t find a legitimate weakness, they’ll make one up,” says Sutter spokeswoman Karen Garner. “The better able we are to meet our mission, the fewer opportunities the SEIU will have to criticize.”

Into the Streets

One area where unions think hospitals are especially vulnerable is in billing and collections. In Chicago, for instance, SEIU has issued report after report over the last four years alleging that Advocate Health Care overcharges uninsured patients and its 10 Chicago-area hospitals employ overly aggressive collection tactics. SEIU also accused Advocate of “redlining”—spending far less on hospitals in minority neighborhoods than on those in the more affluent suburbs. Union organizers created a Web site, hospitalmonitor.org, to keep tabs on the system, and SEIU’s Hospital Accountability Project focuses on Advocate hospitals’ business practices and working conditions.

Over time, SEIU’s tactics in Chicago have become increasingly militant. Union organizers and community activists have picketed outside the homes of Advocate  executives. The union demanded that Advocate turn over a list of employee names, phone numbers and addresses, which the hospital system refused to do.

The union also has picketed Advocate fund raisers. To protect benefactors, Advocate instructed its foundation not to list donors in reports.

And in the summer and fall of 2005, union organizers rounded up uninsured and homeless people, some from out of state, took them to emergency departments of Advocate and other local health systems, and instructed them to demand care. It was a way for the union to flex its muscles and tarnish Advocate’s reputation by forcing overcrowded emergency departments to divert local patients.

Questioning charity care practices is also a tactic of the American Federation of State County and Municipal Employees. The union has been trying to organize nurses, technicians, housekeeping staff and other service workers at Resurrection Health, Chicago’s largest Catholic health system. In 2004, AFSCME issued a report charging that Resurrection cut 2003 charity care spending 57 percent from 2002. Resurrection responded that the drop actually was 32 percent, and was largely because more patients were covered by Medicaid or received other forms of financial assistance.

AFSCME also went after the hospital’s tax-exempt status. Shortly after the 2004 report, a Chicago alderman promised to look into legislation requiring not-for-profit hospitals to spend 5 percent of gross revenue on charity care. Last year, AFSCME used political pressure to bring to a ballot vote in Evanston, Ill., a measure that would have revoked the tax-exempt status of Resurrection’s St. Francis Hospital. The measure was defeated. And in early April, AFSCME called on the U.S. Senate Finance Committee to hold a hearing on whether Resurrection’s tax-exempt status should be revoked. No hearing was held before the legislative session ended, but Illinois Attorney General Lisa Madigan introduced a measure requiring hospitals to spend 8 percent of revenue on charity care. She plans to pursue the bill in the next session.

Efforts by AFSCME, SEIU and others challenging hospitals’ tax status have rattled the bond markets. Standard & Poor’s and Fitch Ratings issued reports in March saying such a move would be damaging to hospitals. “Requirements of this magnitude could potentially lead to lower ratings,” the S&P report says. “Anecdotal evidence also suggests Illinois hospitals could have a more difficult time getting bond insurance.”

Through a spokeswoman, Resurrection declined requests for an interview.

The Chicago effort shows how relentless union corporate campaigns can be even if at a given time they appear to be ineffective. James Skogsbergh, Advocate’s president and CEO, says that the four years during which SEIU has waged its campaign have been among the system’s best ever financially. Moreover, during that period, Advocate has achieved its highest employee satisfaction scores ever, hitting 96 percent in 2005, and is seeing continuing improvement in patient satisfaction scores.

“Somewhere, someone has got to be asking some questions of the SEIU leadership here in Chicago,” Skogsbergh says. “How long have we been at this? How much have we spent? And we don’t have one new dues-paying member?”

SEIU says it’s not going away. “The message SEIU has sent to the industry, based on how we hung in there with Yale-New Haven (Conn., Hospital), how we’ve been hanging in there at Advocate, is simple,” Henry says. “We are not going to walk away from our commitment to the workers to win a union.”

Nightmare in New Haven

Nowhere have all the elements of the corporate campaign come together and created more of a hostile environment than at Yale-New Haven Hospital. The SEIU’s eight-year effort to organize workers at the facility serves as a cautionary tale for hospital leaders nationwide.

In 2003, the union filed a class-action lawsuit against Yale-New Haven and an affiliate facility, Bridgeport (Conn.) Hospital, on behalf of former patients who said they were denied free medical care, charged exorbitant rates and when they couldn’t pay, were aggressively pursued by hospital bill collectors. Yale-New Haven was accused of obtaining arrest warrants for nonpaying patients as part of its collection practices—so-called “body attachments.”

That year, the Connecticut legislature passed a law regulating billing and collection practices. In 2004, a group of patients sued the hospitals again, this time on charges that it violated that law by pursuing collection of bills of uninsured and underinsured patients even though it knew the patients were eligible for charity care.

On another front, the SEIU in the last two years rallied community groups, local clergy, pro-union politicians and the New Haven mayor to hold up construction of a $430 million cancer center on the Yale-New Haven campus. SEIU said it was concerned that the hospital wasn’t doing enough to resolve neighborhood concerns over traffic, parking and a shortage of affordable housing. Critics said the union’s true intent was to force the hospital to submit to a neutrality agreement and card-check election.

In its fight with Yale-New Haven, the union erected billboards and placed full-page ads in the New York Times criticizing the hospital for its practices. Last year, the union accused the hospital in television ads of illegally blocking the union’s efforts, and criticized wages and benefits the hospital offers. The hospital responded with its own ads saying its workers don’t want to unionize and accusing the union of lying.

The corporate campaign ended in March when Yale-New Haven agreed to an NLRB-sponsored secret ballot election and promised not to interfere with the union’s organizing efforts, as long as those efforts didn’t disrupt hospital operations. A third-party arbitrator will address any conflicts that arise. At press time, no schedule had been set for the election.

The long, bitter battle in New Haven troubled hospital executives throughout the area. “The people at Yale-New Haven are good people,” says Robert Kiely, president and CEO of Middlesex Hospital in Middletown, Conn., and immediate past president of the Connecticut Hospital Association. “Watching them be taken apart bit by bit—it was remarkable. And scary.”

Hospital leaders in nearby Boston watched warily as the drama in New Haven played out. In October 2005, the 12,000-member SEIU local in Massachusetts merged with the much-larger SEIU local in New York, and observers say the union likely is targeting Boston because of the size and prestige of its big hospitals and the fact that there is little union representation at the facilities. Boston hospital executives declined interview requests.

Union vs. Union

Labor experts say unions are getting more aggressive partly because they are engaged in an all-out battle with each other in the health care arena. The fight is especially intense when it comes to nurses.

SEIU and the Massachusetts Nurses Association are going toe to toe to represent fewer than 50 nurses at a cancer treatment facility being built at Boston Medical Center. The duel is so heated that to avoid a major showdown, the hospital asked the NLRB to intervene; it could take months or longer to resolve the dispute.

Onlookers expect the rivalry among unions to only get more fierce. Of the 12,000 health care workers that SEIU represents in Massachusetts, a small number are nurses. MNA, with 23,000 nurse members, is the state’s largest health care union.

Unions increasingly ignore their former, self-imposed geographic boundaries to expand membership. A bitter feud erupted in May 2005 when the Illinois Nurses Association lost a rancorous decertification vote at Chicago’s John H. Stroger Jr. Hospital of Cook County and watched 1,800 nurses defect to the California Nurses Association. The Illinois Nurses Association says the CNA’s actions were a deliberate attempt to splinter nurses in the state and gain members without doing the hard work of organizing.

“They go in and create dysfunction on purpose,” says Tom Renkes, INA executive director. “You don’t have to read Sun Tzu’s The Art of War to know their concept exactly. They’re after more members, and they don’t care how they get there—they just want to get there.”

The CNA scoffs that its organizing effort is predatory, but it has gained a reputation within the labor movement for being ambitious and pugnacious.

“Organizing campaigns look different from place to place,” says David Johnson, the CNA’s national director of organizing. “But we believe the same methods we’ve used in California can be used successfully outside California.”

Competition among unions nationally, and the CNA raid in Chicago in particular, is counterproductive, believes Susan Bianchi-Sand, national executive director of United American Nurses, the organizing arm of the American Nurses Association, Silver Spring, Md. “We regard that as a waste of money and resources,” she says. “There are plenty of unorganized nurses that want to be organized. That’s where mature unions put their resources.”

The UAN and seven other unions  announced in February that they will work together to recruit nurses. The UAN is the largest of the unions in the alliance, called RNs Working Together. Others represent primarily teachers, communications workers, steelworkers and AFSCME, but all at one time or another have recruited nurses.

In March, SEIU launched a nurses union that will advocate for federal and state staffing legislation and measures to ease the nation’s growing shortage of nurses. Called the Nurse Alliance of SEIU, the union brings 84,000 SEIU nurses in 23 states into a separate organization with a dedicated staff and annual budget of $6 million.

Henry of SEIU’s hospital division says the union is “thinking more boldly” about its organizing efforts. Whether that means the SEIU will employ the same aggressive corporate campaign tactics remains to be seen. During a teleconference announcing the new union, SEIU President Andrew Stern hinted at a harder edge to nurse organizing in the future.

“This is really about launching the first-ever national campaign for nurses in the same vein that we’ve done in so many other industries, which have changed them fundamentally,” Stern said.

That “fundamental change” worries hospital leaders. “This is not your father’s labor movement,” says an executive at a large health care system. “It’s either, ‘we’ll get you now or we’ll get you later, but we’ll get you.’ The question is, ‘are you vulnerable?’

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