News & Events

Executive Director’s Column: Building a bigger lifeboat

From the Massachusetts Nurse Newsletter
April 2010 Edition

Executive Director’s Column
By Julie Pinkham

Whenever the opportunity arises, I like to talk to MNA members about the rapidly changing environment in which they work— particularly when it comes to the phenomenon of “back to the future in health care.” I focused on this topic in my February column, but I think it is important to keep talking about what is happening, what might happen and what we need to do with these pieces of information.

First, we need to understand the impact of health care reform and specifically health care expansion as it was implemented here in Massachusetts. While the policy succeeded in getting health insurance to those who did not have it, the plan did not tackle the issue of cost. The more people with access to care, the bigger the total bill. The belief was that with better access to preventive care, costs would go down. This has not happened, mainly because the cost of providing care to those who have entered the system is still greater than the savings. And in crafting the health care bill, the Legislature did not put in place the funding to sustain it … that problem was to be addressed later.

But “later” has arrived, and it has arrived in the midst of a major financial crisis. As a result, the state cannot provide the funding to adequately underwrite its health reform plan and the problem of cost is not going away.

Employers say the cost of insurance is too high, while insurers say the cost of health care is too high. Meanwhile, hospitals and doctors say they are not paid enough to survive. So while everyone is pointing fingers, the problem of actually reducing health care costs has reached epic proportions.

Recently the attorney general and the Division of Health Care Finance and Policy set out to investigate the costs that drive the state’s health care systems. The current reimbursement system (outside of Medicare and Medicaid) is a “private insurer” model where price is dictated by competition. How does that model work? Well, the industry—after deregulation in the 1990s—negotiated with insurers over reimbursement rates through contract arrangements with various insurers. Hospitals quickly came out of the gate to form networks, allowing them more market leverage to negotiate favorable reimbursement rates with the insurers. Not long after, mergers, closures and affiliations affected nearly every hospital in the state. Under this model, some networks have grown strong while many stand-alone hospitals have struggled to survive.

With a recent analysis of hospital pricing, the attorney general found that the negotiated price of services had no correlation to patient care outcomes; teaching status; proportion of Medicare/Medicaid patients served; or the complexity of patients. There was also no significant difference between charges for the same service between hospitals, other than the advantage of the provider/ hospital network to negotiate a good rate.

This information is not sitting well with the hospital industry, and the blame game and finger pointing are in full swing. Stakeholders have attempted to drag nurses into their funding battle by saying nurses’ salaries are a reason for rising health care costs.

The MNA conducted a thorough review of this situation and we testified last month that nurses, as a percent of hospital expenses, account for no more than 18 percent of the total hospital budget and it has been that way for the last five years. On the other hand, capital expenses (new technology, infrastructure) represent 30 percent. The bottom line is that the cost is not driven by the industry’s investment in nursing, but rather by its investment in bells, whistles, bricks and mortar. Given this priority, it is no surprise the industry wants to cut salaries/benefits and to “speed up” nurses by redesigning the model of patient care delivery.

We saw this 15 years ago in response to managed care funding pressures and it is in vogue once again, except now the research documents this is the wrong approach. In fact the research proves that these tactics will result in increased morbidity and mortality for patients.

So with all this finger pointing, what’s happening? Well, the governor is looking to cap insurance premium increases to not greater than the medical inflation rate. There is also talk of re-regulating the provider industry and nurses can expect an onslaught of troubling reactions to the health-reimbursement policy debate.

By way of example: For the Caritas Network the “survive or thrive” reaction has led to its acquisition by Cerberus Capital. Why? Because Cerberus can inject $830 million into the network to rebuild services, eliminate debt and position it for growth (read, add more hospitals), thus making Caritas a stronger competitor. Tufts Medical Center announced its intent to change their model of patient care delivery (read, cut nursing staff, increase the number of patients assigned to each nurse and replace nurses with unlicensed personnel). Morton Hospital, Quincy Medical Center and North Adams Regional Hospital are all facing difficult bargaining with employers pushing for concessions and all are looking to be acquired. They are not alone: I cannot name an institution that isn’t “shopping” or being “shopped.” Health care is transitioning from small business models to health care corporations.

So what do we do to navigate these troubled waters? Metaphorically speaking, we build a bigger lifeboat. A small lifeboat means only a few people can survive and the focus is on who is tossed out of the boat and who stays in. A bigger boat will help both you and your colleagues survive. What do I mean exactly? When services are cut or consolidated you can look at it as, “I have high seniority, so I have protection; too bad for everyone else.” Or, instead, you can choose to partner with everyone who needs the lifeboat and push to make it bigger. Will the bigger lifeboat be perfect and protect all aspects of every person’s job? I doubt it. But it is very likely that you will ALL do better by strategizing collectively.

In the case of MNA bargaining units being merged, this brings up the sensitive subject of seniority. Seniority becomes important when discussing reduction-in-force rights, job bidding rights and time-off access. And when things get tight—like now—all of those items become important and, therefore, potentially giving up a perceived or real security may be a difficult leap of faith. But I can tell you that the alternative is a small lifeboat. What if it is you in the next “consolidation?” Do you want to be thrown out?

We need to stay together and support each other or else management will divide and conquer. We also need to help nurses who are not yet organized to do so because non-union hospitals are already imposing such changes. Those nurses don’t have the chance to negotiate.

Nurses are most powerful when they act collectively. Before all of these current changes began to unfold, your bargaining unit was positioned against the decisions of a single facility viewed as your employer. That is not what the future holds. The employer will no longer be the individual hospital. It will be a corporation and decisions will be made at a corporate level. While we do not aspire to the corporatization of health care, we do need to define our power within that structure. Doing so will help us protect both our practice and our patients.

The solution to the health care financing crisis is not the devolution of our working conditions. We need to stand together to ensure that these burgeoning health care corporations do not push any of us out of the lifeboat.