Planned Aggie Square Rehab Facility Has UC Labor Unions Concerned Over Outsourcing

The new Aggie Square campus near the UC Davis hospital in Sacramento is being advertised as a hub of innovation for the university, but the new rehab facility there might not be staffed by UC employees.

UC Davis is partnering with a national company called Kindred Healthcare to build the new 40-bed physical rehabilitation center, and that company — which owns 51 percent of the project — will be doing the hiring. When the current rehabilitation units close due to seismic compliance deadlines taking effect in 2020, administration says those workers can apply for jobs with Kindred, or they can take jobs elsewhere in the main hospital or at outpatient clinics. They say no one will be laid off.

Still, labor groups are raising the alarm about what they allege is outsourcing. It’s a practice that involves replacing in-house employees with outside workers, often because they’re cheaper or more specialized. It’s happening increasingly in health care as hospitals feel the financial strain of more patients and lower reimbursement rates. The outsourcing question has been a main point of contention in recent UC-wide strikes.

The therapists, social workers and nurses in UC Davis’s current rehab department say if Kindred hires new staff to take their spots, patients will see a drop in quality.

Jasmine Tobin is a certified occupational therapy assistant who’s been working with local UC labor union AFSCME 3299 on the issue.

“It just feels like such a disservice to our community to not bring us, as skilled clinicians, to this new area to be able to provide that,” she said. “It’s really heartbreaking.”

Steve Telliano, assistant vice chancellor for public affairs at UC Davis Health,says UC Davis wouldn’t have been able to build the new $60 million facility without partnering with Kindred. And he says it’s not outsourcing, it’s job creation. He expects there will be more than 200 new positions at Kindred, while the existing positions at UC Davis Medical Center stay intact.

Telliano thinks UC employees can find jobs at the new facility, and says the public-private partnership is a key component of the new Aggie Square project.

“Kindred has said they’re really interested in hiring our employees, because they’re very good,” he said. “It’s going to create new jobs doing additional physical therapy, and even, we hope, new kinds of physical therapy, so this is a net job partnership.”

Tobin says she doesn’t want to work for Kindred, and that her colleagues are dubious about the company’s credibility. She says her future — including how she’ll provide for her family — has suddenly become uncertain.

“It’s uprooted a lot of emotions that I never expected, thinking that this was gonna be where I was retiring doing what I absolutely love to do,” she said.

Dr. Richard Sheff, chief medical officer with a healthcare consulting firm called the Greeley Company, said there are times when outsourcing makes a lot of sense, such as when hospitals contract with food companies to hire meal service staff. But some situations are more likely to lead to labor disputes.

“If you’re an employee in a hospital or health care system, and the hospital chooses to outsource what you do to another company, one might feel wronged in the process,” he said. “However, organizations at any business have to figure out how to provide a service at the highest quality and lowest cost.”

Outsourcing could become even more common as jobs that had to be done in person go digital and can be assigned to faraway labor, said Dr. Robert Wachter, a physician at the University of California, San Francisco who studies the way hospitals work.

“We’re beginning to see things like radiology or pathology get outsourced every now and then because the doctor doesn’t need to look at a physical X-ray or a physical pathology slot anymore, they can look at a digital image,” he said.

The labor union is currently voicing concerns to UC Davis administration about staffing at the new facility.

Correction: This story has been updated to reflect the price of constructing the new rehabilitation facility.