Hospitals coping with shrunken state budgets and anticipating cuts from President Barack Obama's health-care overhaul are now getting squeezed by a new power: an activist nurses union.
Twelve thousand members of the National Nurses United (NNU) planned a one-day strike on June 10 in Minnesota, the biggest work stoppage ever by U.S. nurses, the union claimed. (A San Francisco court order on June 8 barred another walkout set for the same day at University of California hospitals.) Last month 1,500 members at an NNU affiliate in Philadelphia stopped work for a month, ultimately winning concessions.
The union's assertiveness could hamper efforts to slow exploding health-care costs, which rose 5.7 percent last year, to $2.5 trillion. Hospitals are slated to bear the brunt—$113 billion—of the $196 billion in savings mandated by Obamacare over the next decade, according to the Congressional Budget Office. That may be hard if the nurses' union insists on staffing increases.
The 150,000-member NNU, formed in December from various state nurses associations, has made mandatory hospital nurse-to-patient ratios its main agenda item. California is the only state with such a law. Cuts in staffing "have always been bad, but the cuts the last two years have made it even worse," says John Nemo, a spokesman for the NNU's Minnesota Nurses Assn.
The labor strife reflects state financial woes and hospitals' attempts to respond to the federal health-care law, which will boost insurance rolls but also seeks to reduce costs, including those for Medicare, the federal health-care program for the elderly. Cuts in Minnesota's health budget reduced state payments to hospitals for patient services under Medicaid or other programs beginning in 2009. "Hospitals are thinking ahead, they know that they will not be getting as large Medicare payment updates in the future," says Jean Abraham, an assistant professor of health policy at the University of Minnesota in Minneapolis. In Minnesota, the NNU affiliate is calling for guaranteed nurse-to-patient ratios, maintenance of employer pension contributions, and annual raises as high as 4 percent over a three-year contract.
The 14 targeted Twin Cities Hospitals want cuts of about 30 percent in pension contributions after being forced to double contributions this year to pay projected benefits. They also want more staffing flexibility, and raises of less than half what the union is seeking. The Minnesota nurses' staffing proposal would leave hospitals paying $250 million more a year for labor, says Maureen Schriner, a spokeswoman for the hospitals. "They think we can just increase our costs because we can just pass that cost on to our payers, but that's just from a bygone era," Schriner says.
Tensions between health-care institutions and employees are "hitting a boiling point" in many states, says Eric Simon, a partner at law firm Jackson Lewis who represents health-care employers in New York. "Revenues are becoming tighter, [and] the areas for finding common ground are becoming more and more difficult to achieve."
The bottom line: Hospitals and a new nurses' union are taking a tough line on salaries and benefits now, in advance of the cost pressures from Obamacare.