Old school journalists call this a healthcare man bites dog story: A hospital system accusing nurses of unfair labor practices.
Duluth, Minn.-based Essentia Health filed an unfair labor practice charge with the National Labor Relations Board accusing the Minnesota Nurses Association (MNA) of failing to include Essentia Health-Duluth when listing facilities in its 10-day strike notice on Sept. 1, while announcing a three-day strike, which was slated to begin within hours of this posting.
“Since bargaining began in April, Essentia has negotiated in good faith toward a fair agreement,” the health system said in its release. “We believe it’s imperative for us to exhaust all of our options in pursuit of this objective as we seek to preserve our ability to provide patient care. This includes continuing to negotiate at the table, which is where solutions are found. We again encourage the MNA to consider mediation.”
A tip of the hat to the MNA for its response:
“This is yet another desperate move by Minnesota hospital executives unprepared to reckon with the power of 15,000 nurses standing firm to demand better care and working conditions in our hospitals,” Chris Rubesch, a nurse at Essentia Health said in a statement to Becker’s Hospital Review. “The National Labor Relations Board requires notification only of the date and time that picketing will commence, which the Minnesota Nurses Association provided to Essentia Health. There is no requirement that a union provide notice of the locations at which it intends to picket.”
If the MNA’s members practice nursing with the same prowess as their association practices PR, I’m going to Minnesota for my hospital care. The MNA has prepared a commercial that impressively captures all that’s wrong with U.S. healthcare: Overpaid hospital executives lining their pockets while cutting back nursing staff and charging patients prices that exceed four times the cost of care. The MNA launched a website called “Patients Before Profits” to elaborate on its position. I’ve linked to the commercial.
The MNA has some good ammunition to back up its claims. As reported by the Minnesota Reformer, Essentia Health CEO David Herman received $2.7 million in total compensation in 2020, a 61% increase from 2019. One other executive received more than $1 million in compensation.
At M Health Fairview, a partnership between the University of Minnesota, Unversity of Minnesota Physicians, and Fairview Health Services, CEO James Hereford received $3.55 million in total compensation in 2019, a 90% increase from 2018. That’s 40 times more than the $84,000 salary earned by the average Twin Cities registered nurse in 2019. In addition to Hereford, eight other employees received more than $1 million in compensation that year.
A survey of MNA members who quit their jobs in the past two years revealed that “management issues” were the No. 1 reason for the departures, while short staffing was the No. 2 issue. Covid ranked No. 3.
The MNA appears to have the public on its side. A poll conducted on behalf of the MNA found that more than 50 percent of Minnesota voters have an unfavorable view of hospital executives and CEOS, while just 11 percent said they viewed hospital executives favorably. By comparison, 84 percent of those polled said they viewed nurses favorably.
Most Minnesotans said hospital executives are paid too much money, while 62 percent said nurses make too little.
There’s a nationwide shortage of nurses, so Minnesota hospitals have lost their historic bargaining power. Hopefully, so-called travel nursing agencies won’t agree to provide scab labor, as that could create ill-will among striking nurses and hurt the agencies in the long run.
Dim bulbs running U.S. hospitals
Executives running U.S. hospitals aren’t the brightest bulbs in the management galaxy.
That was the conclusion of a former Wall Street executive who earlier served as a board member of a regional hospital system and was aghast at the industry’s prevailing management practices. What left him especially dumbfounded were hospital executives thinking they were geniuses if they could achieve four percent profit margins, while their suppliers were easily enjoying profit margins more than five times greater. Medtech companies, for example, enjoy margins averaging 22 percent.
The American Hospital Association, which represents the interests of the hospital industry’s dim bulbs, in April issued a report entitled, “Massive Growth in Expenses and Rising Inflation Fuel Continued Financial Challenges for America’s Hospitals and Health Systems.” The report lamented that hospitals are experiencing significant increases in expenses for workforce, drugs, and medical supplies.”
If the AHA was serious about its concern for the rising costs of medical supplies, it would immediately advise its members to stop buying them through third-parties knowns as Group Purchasing Organizations. In theory GPOs are supposedly able to get better pricing because they buy in bulk on behalf of hundreds of client hospitals, but that’s not how things work in practice. GPOs are legally allowed to accept kickbacks, which right off the bat breeds inefficiencies.
This Vanity Fair article does a good job explaining what one of my best healthcare sources routinely refers to as the “filth” in the industry. My source insists hospital CEOs are savvier than they appear. He and and others allege that GPOs have ways to line the pockets of their client CEOs.
As for the increases in workforce expenses, much of that is the doing of the geniuses running U.S. hospitals. For years they treated nurses badly, increasing their workloads while denying them additional pay. When they tried to unionize, managements spared no expense on union busting. For example, at Beaumont Royal Oak in suburban Detroit, former CEO John Fox spent nearly $2 million on consultants whose job it was to intimidate nurses. The effort successfully derailed the union organizing but caused many of them to quit.
The situation played out at hospitals across the country to varying degrees, leading to the current nursing shortage. That’s forced hospitals to rely on nursing staffing agencies, whose fees are rising because demand for their services is growing. The nurse staffing agencies pay considerably better than hospitals, so nurses increasingly are quitting their jobs to join staffing agencies. It’s a vicious circle.
Tina Freese Decker, CEO of Michigan’s biggest hospital system known as BHSH because her marketing people have yet to come up with a name for the enterprise created by her Grand Rapids-based Spectrum Health acquiring suburban Detroit-based Beaumont Health in February, cited the AHA’s April report in a shameful email to employees last Friday explaining why she fired 400 employees.
Freese Decker left out two critical details about costs in her memo. One is how much former Beaumont CEO John Fox was paid to disappear after handing her the keys to Beaumont in February. There’s reason to believe Fox possibly received a golden parachute that exceeded $30 million.
The other was the terms of her new contract, which you can rest assured includes a huge bump in compensation because she’s doubled the size of her operation. Never mind that BHSH recently reported that Beaumont lost more than $100 million in the first six months Freese Decker took over the operation. Countless Beaumont and Spectrum workers will lose their jobs because of Freese Decker’s misguided acquisition.
Freese Decker didn’t disclose how much she’ll save firing 400 employees. I wonder if it’s even enough to cover Fox’s golden parachute.
Holding CEOs liable for staffing shortages
In wake of North Carolina’s Supreme Court ruling last month overturning a 90-year-old precedent protecting nurses from legal liability, I got to wondering why the CEO of Novant Health Hanover Regional Medical Center isn’t held legally liable for the death of a 77-year-old woman who died after waiting more than five hours in his ER to see a “provider.” Among the woman’s symptoms were vomiting, weakness, unable to stand, fever, and rectal cancer for which she was receiving chemotherapy. She went into distress while waiting in the ER lobby and couldn’t be saved.
Novant Health shamefully denied the unidentified woman died awaiting treatment, but the Department of Health and Human Services investigated a local TV station report and found it to be accurate. The TV station reported that Novant Health at one point was short 400 nurses.
If nurses are going to be held liable for their errors, why shouldn’t hospital CEOs be held legally accountable for failing to staff their hospitals properly? Some two-thirds of hospital ERs are staffed by private equity-owned firms, who should also be held accountable.
Long lines in the ER were commonplace even before the pandemic. In April 2021, a Missouri ER doc was awarded $26 million after claiming he was wrongfully terminated because he complained about ER staffing shortages at the hospital where he worked. The defendant in the case, filed years before the pandemic, was EmCare, which is owned by KKR.
Novant Health CEO Carl Armato was paid $4.1 million in compensation in 2020.
Good News at Henry Ford Hospital
There’s rarely any good healthcare news coming out of southeastern Michigan these days, but the appointment of Robert Riney as CEO of Henry Ford Health is cause for celebration. He’s been with the Detroit-based hospital system for more than four decades, which means some of its competitive strengths will continue.
One of those strengths is HR, particularly nurse staffing management. Nurses at troubled Beaumont Royal Oak in suburban Detroit repeatedly told me during the pandemic that Henry Ford “treats its nurses like royalty.” A friend of mine who was treated at HFH asked his nurse why she seemed so happy, and she replied, “Because I love my job.”
Riney succeeds Wright Lassiter III, who left in late July to become CEO of CommonSpirit Health in Chicago. Probably a good thing that Lassiter left given his growing extracurricular activities. In addition to serving as chair of the American Hospital Association, in January he joined the board of Fortive, a publicly traded company headquartered in Washington state.
Under Lassiter’s leadership, HFH’s top safety Leapfrog rating declined significantly. In these troubled times, all hospitals need CEOs who have their eyes on the ball 100 percent of the time.