OHSU ‘contracts in’ AFSCME patients billing unit

About 75 employees at the Oregon Health & Science University (OHSU) will be keeping their jobs after a “contracting in” proposal from their union — the American Federation of State, County and Municipal Employees Local 328 — was accepted by university management.

In late August, OHSU announced plans to contract out the 75 union (and 10 management) jobs in its patient billing services (PBS) department, a department that grosses over $940 million per year for University Hospital.

But Local 328 had one card up its sleeve: An untested clause in its contract that gave the local the right to bid on any work scheduled to be “outsourced” (the university’s term for contracting out). So, when OHSU officially released its request for proposal (RFP) on PBS, Local 328 informed the university it intended to bid.

“It’s a credit to our 1998 bargaining team that they had the foresight to put that clause in our contract,” said Diane Lovell, the senior AFSCME staff representative for Local 328. “Still, we hadn’t actually done it before, and it was a daunting task.”

“It truly is a victory for the employees — we created a process five years ago and used it effectively when needed,” said Local 328 President Philip Curtis.

“We thought it (the contracting out) was a formality, and that we’d lose our jobs,” added union member Crista Odell. “We were not optimistic.”

A half-dozen outside agencies also bid — non-union companies such as Siemens and Electronic Data Systems (the Ross Perot-founded firm).

Local 328 had to operate on two tracks simultaneously. First, it had to prepare its formal response to the RFP — a document eventually housed in a large binder with hundreds of pages, 33 tabs and weighing in at just under five pounds. The proposal outlines a budget, agency benchmarks and so forth. At the same time, the local had to begin a process of training both employees and PBS managers in work process management; part of that task was creating a Process Improvement Team for PBS.

“There have been some legitimate, ongoing concerns about some aspects of that department,” said Frank Vehafric, a longtime Oregon AFSCME staff rep assigned to Local 328. “Work flow and, frankly, some attitudes needed to change and improve at PBS. This whole process was a challenge at many levels.”

Vehafric credits OHSU management with “taking us seriously, and not throwing up false roadblocks” in the bidding process. In the end, Vehafric believes it came down to Local 328 and Siemens.

“Our presentation included the advantages of both the PBS management team and the department employees,” said Vehafric. “Management at PBS brings expertise to that department no outside firm could match. We recognized that fact. Our PBS members have institutional knowledge of that department and an ability to problem solve that, again, you just can’t bring in from the outside.”

Lovell said the union RFP “showcased the work of the PBS staff; we showed we could do the job better.”

She said all PBS employees rewrote and updated their resumes, something they hadn’t done for years. “The university respected and appreciated that fact. Our PBS employees represent 130 different faith and community groups. We are truly OHSU ambassadors in the community, and that’s something else an outside agency couldn’t match.”

The week of Nov. 17, OHSU management announced it had accepted the union’s proposal over the private, non-union employers.

AFSCME and the PBS employees engaged in a brief celebration event on Nov. 24 ... a celebration tempered by the realization that everyone involved is about to venture into uncharted waters.

“I’m excited and a little apprehensive all at the same time,” said patient account rep Heather Pashley. “I’m very proud of AFSCME. We went in there and proved we can do the work the best. But now we have to follow up and move forward.”

“It certainly gets interesting now,” said Lovell. “We, AFSCME Local 328, are now full partners in jointly managing PBS. It’s something you’re always striving for — an equal say in the worksite — but now that it’s here, there are some challenges. So now we have to follow through. We’re not only going to redesign the work at PBS, we’re going to change the culture of the workplace.”

Lovell and Vehafric will work closely with PBS Director Terri Meier, who supported the local’s bid throughout the process.

First will be a redesign of work plans and work teams. Department benchmarks and targets will be reevaluated and likely changed. Local 328 is kicking in $10,000 from its treasury to help pay for training costs. Employees will receive new training, and cross-training functions will be a priority. With that training, employee opportunities will increase — but so will accountability.

“It’s all very exciting, but there is risk involved,” Lovell said. “If we’re not successful, it could be the death knell for ever getting to try this again. On the other hand, if we are wildly successful, there will be demand to do the same thing at other OHSU departments, and that demand could easily challenge our capacity.”

So, acknowledging the challenges ahead, the local is still basking in the glow of victory for at least a little while.

“We’re very excited,” Pashley concluded. “PBS is headed in a new direction, and we’ll still be here to be part of it.”

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