News & Events

Costs added up as nursing strike loomed

By Christopher Snowbeck

To deal with a one-day strike and planning for a subsequent walkout that didn’t happen, hospitals in the Twin Cities spent $23.8 million this year to maintain operations during a contentious contract dispute with nurses.

Hospitals spent most of the money hiring about 2,800 replacement nurses who worked during the strike June 10. But the tab also includes costs related to preparations at 14 hospitals for a threatened open-ended strike in early July, which was averted with last-minute negotiations.

The hospitals and more than 12,000 nurses represented by the Minnesota Nurses Association reached a contract settlement that provided small wage increases for workers but lacked mandated staffing ratios that nurses argued were critical for patient safety.

Nurses and hospitals blamed one another for the nearly $24 million in expenses.

"The nurses believe this was a tremendous waste of money on behalf of the hospitals," said Joni Ketter, director of organizing for the Minnesota Nurses Association. "They were willing to spend this kind of money rather than listen to their front-line nurses and put patients first."

Anne Sonnee, a spokeswoman for the St. Paul-based HealthEast system, countered by saying: "The nurses union, by implementing a one-day work stoppage, inflicted upon the community unnecessary costs and inconvenience that were clearly not warranted. … Because of the (union’s) actions, the expenditure was unavoidable."

The hospitals have detailed



strike-related spending in quarterly financial disclosure statements filed in recent weeks.

All one-day strikes are costly in the sense that expenses primarily go to replacement nurses who are not part of the contract dispute, said Aaron Sojourner, an assistant professor of labor relations at the University of Minnesota. So, the $24 million in reported expenditures by the hospitals wasn’t available as part of the ultimate settlement.

Even so, Sojourner said he thinks the one-day strike was constructive. That’s because the walkout helped show the strength of both sides — the union pulled it off, and hospital management operated without major missteps, he said.

"Each side recognized that it would not be a quick knock-out blow," Sojourner said. "It was going to be a bruising knock-down battle if it went to a full strike."

And it’s hard to say exactly what’s typical for hospital spending in strike situations because the events are relatively uncommon.

"These one-day strikes are very, very rare — strikes in general are very rare," said Jill Furillo of National Nurses United, a national union group. She said the $24 million tab in Minnesota is "probably in the ballpark of what hospitals spend."

Nurses struck hospitals in the Allina, Children’s, Fairview, HealthEast, North Memorial and Park Nicollet systems.

During contract talks, hospitals estimated that granting the nurses’ demand for staffing ratios would require up to $250 million per year in additional labor costs for the group.

Hospitals argued that ratios would add unnecessary costs at medical centers that already receive good marks for patient care.

Allina operates five of the hospitals that were involved in the strike — the largest cluster from any one health system — and the system’s total hit was the largest, at $15 million. The tally, however, does not include costs that the Allina hospitals avoided by not having to pay unionized nurses during the strike.

"We did what we had to do to serve our patients," said David Kanihan, a spokesman for Allina.

Park Nicollet did not factor avoided labor costs into its tally of $2 million in operating expenses related to the strike.

That also goes for the $2 million in operating expenses at HealthEast; officials separately estimated they avoided about $220,000 in payroll for striking nurses at three hospitals in the system.

"The one-day strike expenses totaled $1.8 million and the open-ended strike expenses were approximately $200,000," said Sonnee, the HealthEast spokeswoman. "The primary expense was for replacement nurse wages and expenses (such as) travel, meals, license, background check, training and lodging."

In the weeks leading up to the strike, staffing firms publicized the chance for nurses from around the country to travel to the Twin Cities and make anywhere from $1,600 to $2,224 for one day of work plus orientation. Travel and lodging costs were covered, too.

Hospital officials said the savings from avoided labor costs were included in the calculation of operating expenses at Fairview ($1.9 million), Children’s ($1.7 million) and North Memorial ($1.2 million). While all six systems incurred operating expenses related to the strike, the Allina, Children’s and North Memorial systems also reported smaller hits to patient care revenue.

The Minnesota Nurses Association anticipated that hospitals would spend about $20 million for replacement nurses during the one-day strike, said Ketter, the union official. So, while the final tally isn’t exactly surprising, nurses still find it disappointing, because the money could have been put toward patient safety, Ketter said.

"The agencies that provide these (replacement) nurses have a corner on the market, so this would be the same type of expenses other hospitals would see in similar situations," she said.

Hospital officials said they would rather not have spent the money. But they felt it was important to negotiate a contract that didn’t include staffing ratios that hospitals viewed as unsustainable.

"Avoiding this cost allows us to carry Park Nicollet’s mission into the future," said Jeremiah Whitten, spokesman for the health system. "The affordability and sustainability of health care is critical to the community."

Christopher Snowbeck can be reached at 651.228.5479.