Earlier this month, the hospital industry, led by the California Hospital Association (CHA), and the state’s largest union of hospital workers, SEIU-United Healthcare Workers West (UHW), signed a breakthrough agreement to form a strategic relationship set to change the face of health care in California while at the same time serving as a new national model for how employers and unions interact.

At the center of the new agreement is the establishment of a $100 million joint advocacy committee to drive improvements to the health care delivery system that could not be obtained through direct negotiation between employers and labor unions. A key goal for the relationship is to stabilize California’s health care safety net. The agreement also provides for a code of conduct that will govern conversations between union representatives and hospital employees, thereby also eliminating negative campaigning and bitter attacks that were prevalent in the past.

The agreement will allow both parties to work more effectively toward increasing Medi-Cal reimbursement rates throughout the state; California currently ranks 49th in the nation. The focus will be on positive activities to accomplish this improvement, such as identifying new resources and financing approaches at the state and federal levels, as well as educational opportunities, legislative and regulatory efforts, a ballot initiative, and/or other strategies. Also, SEIU-UHW has agreed to not pursue its two ballot initiatives that would have focused on hospital pricing and executive pay at not-for-profit hospitals.

The overlying concept behind all of this is teamwork—a new word when talking about hospital and labor relations. We have truly reached a new era in health care when an agreement such as this serves as a national model for hospital management-labor relations. This accord will potentially ease tension between the two groups, set forth common goals for both groups to work toward together rather than apart, and foster meaningful dialogue rather than negativity. Indeed, this is something to celebrate.

Let us know your thoughts about this agreement and what it may mean for health care in California.