Hospitals paying $24 billion more for labor during the COVID-19 pandemic

https://www.healthcarefinancenews.com/news/hospitals-paying-24-billion-more-labor-during-covid-19-pandemic

Clinical labor costs are up by an average of 8% per patient day, translating to $17 million in additional annual labor expenses.

As the delta variant pushes COVID-19 caseloads to all-time highs, hospitals and health systems across the country are paying $24 billion more per year for qualified clinical labor than they did pre-pandemic, according to a new PINC AI analysis from Premier.

Clinical labor costs are up by an average of 8% per patient day when compared to a pre-pandemic baseline period in 2019. For the average 500-bed facility, this translates to $17 million in additional annual labor expenses since the beginning of the public health emergency.

The data also shows that overtime hours are up 52% as of September. At the same time, the use of agency and temporary labor is up 132% for full-time and 131% for part-time workers. The use of contingency labor – positions created to complete a temporary project or work function – is up nearly 126%.

Overtime and the use of agency staff are the most expensive labor choices for hospitals – usually adding 50% or more to a typical employee’s hourly rate, Premier found.

And hospital workers aren’t just putting in more hours – they’re also working harder. The analysis shows that productivity, measured in worked hours per unit of departmental volume, increased by an average of 7% to 14% year-over-year across the intensive care, nursing and emergency department units, highlighting the significance of the increases in cost-per-hour.

Another complicating factor is that hospital employees are more exposed to COVID-19 than many other workers, with quarantines and recoveries requiring the use of sick time. The data shows that use of sick time, particularly among full-time employees (FTEs) in the intensive care unit, is up 50% for full-time clinical staff and more than 60% for part-time employees when compared with the pre-pandemic baseline.

WHAT’S THE IMPACT

The combined stressors of working more hours while under the constant threat of coronavirus exposure are pushing many hospital workers to the breaking point. In fact, the data shows clinical staff turnover is reaching record highs in key departments like emergency, ICU and nursing. 

Since the start of the pandemic, the annual rate of turnover across these departments has increased from 18% to 30%. This means nearly one-third of all employees in these departments are now turning over each year, which is almost double the rate from two years ago.

This is a number that could increase as new vaccination mandates take effect. Already, one Midwestern system reported a loss of 125 employees who chose not to be vaccinated, while a New York facility reported another 90 resignations. Overall, staffing agencies are predicting up to a 5% resignation rate once vaccine mandates kick in. 

While a minority of the overall workforce, losses of even a few employees during times of extreme stress can have a ripple effect on hospital operations and costs.

THE LARGER TREND

According to the American Hospital Association, hospitals nationwide will lose an estimated $54 billion in net income over the course of the year, even taking into account the $176 billion in federal CARES Act funding from last year. Added staffing costs were not addressed as part of CARES and are further eating into hospital finances. 

As a result, some are now predicting that more than half of all hospitals will have negative margins by the end of 2021 – a trend that could be dire for some community hospitals. 

Prior to the pandemic, about one quarter of hospitals had negative margins, the Kaufman Hall data showed. At the beginning of 2021, after almost a year of COVID-19, half of hospitals had negative margins.

Meanwhile, the most potentially disruptive forces facing hospitals and health systems in the next three years are provider burnout, disengagement and the resulting shortages among healthcare professionals, according to a March survey of 551 healthcare executives.

Possible strike looms for 28,000 Kaiser workers in Southern California

80,000 Kaiser Permanente workers to strike nationwide in October | Fox  Business

Nurses and other healthcare workers have voted to authorize a strike at Kaiser Permanente in Southern California, according to a union news release.

The vote covers 21,000 registered nurses, pharmacists, midwives, physical therapists and other healthcare professionals represented by the United Nurses Associations of California/Union of Health Care Professionals, as well as 7,000 members of United Steelworkers. It does not mean a strike is scheduled. However, it gives bargaining teams the option of calling a strike. Unions representing the workers would have to provide a 10-day notice before striking.

The vote comes as Oakland, Calif.-based Kaiser is negotiating for a national contract with UNAC/UHCP, along with about 20 other unions in the Alliance of Health Care Unions. The alliance, which has been in negotiations with Kaiser since April, covers more than 50,000 Kaiser workers nationwide.

UNAC/UHCP said union members are facing “protracted understaffing” amid record levels of burnout during the COVID-19 pandemic.

“While healthcare workers are facing record levels of burnout after 18 months of the COVID pandemic, they continue to deal with protracted understaffing. Talks at the table center on how to recruit to fill open positions that impact patient care and service,” the union said in a news release. “Kaiser Permanente … wants to slash wages for new nurses and healthcare workers and depress wages for current workers trying to keep up with rising costs for food, housing and other essentials.”

Kaiser has defended its pay amid a challenging pandemic, saying its proposal includes wage increases for current employees “on top of the already market-leading pay and benefits,” as well as a market-based compensation structure for those hired in 2023 and beyond.

In a statement shared with Becker’s Oct. 11, the system also emphasized its continued focus on high-quality, safe care.

“In the event of any kind of work stoppage, our facilities will be staffed by our physicians along with trained and experienced managers and contingency staff,” the system said. 

This strike would affect Kaiser hospitals and medical centers in Anaheim, Bakersfield, Baldwin Park, Downey, Fontana, Irvine, Los Angeles, Ontario Vineyard, Panorama City, Riverside, San Diego, West Los Angeles and Woodland Hills, as well as various clinics and medical office buildings in Southern California.

Kaiser Permanente union in California nearing strike

Dive Brief:

  • A union representing 24,000 Kaiser Permanente clinicians in California has put a pause on its 24-year partnership with management, the group said Friday.
  • Leadership of the union voted last week to move forward with a membership vote that would authorize the bargaining team to call a strike.
  • The United Nurses Associations of California/Union of Health Care Professionals said in a press release Kaiser Permanente is planning “hefty cuts” to nurse wages and benefits despite the ongoing COVID-19 pandemic and high levels of burnout among nurses.

Dive Insight:

Union activity at hospitals has been ramping up since the onset of the pandemic, as front-line healthcare workers have been stretched to the brink with full ICUs, worries of infection and sick coworkers.

Now, Kaiser Permanente nurses in California are saying they’re not being appreciated for their efforts.

“How do you tell caregivers in one breath you’re our heroes, we’re invested in you, I want to protect you, but in the next say I want to take away your wages and benefits? Even say you’re a drag on our bottom line,” Charmaine Morales, executive vice president of the union, said in a press release. “For the first time in 26 years, we could be facing a strike.”

The most recent bargaining session between the health system and the union was Sept. 10. Another one hasn’t been scheduled, despite most contracts being set to expire at the end of the month, the union said.

The labor management partnership started in the 1990s as an attempt for the union and management to share information and decision-making, the union said.

But they also said company leaders have not been invested in the agreement recently.

“Kaiser Permanente has stepped back from the principles of partnership for some time now, and they have violated the letter of our partnership agreement in the lead up to our present negotiations,” union president Denise Duncan said in the press release. “Despite that, we are here and ready to collaborate again if KP leaders find their way back to the path — where patient care is the true north in our value compass, and everything else falls in line behind that principle. Patient care is Kaiser Permanente’s core business, or at least we thought so.”

The press release cites Kaiser’s profitability, as the system’s net income was nearly $3 billion in the second quarter of this year. However, that was a decrease of more than a third from the prior-year period.

It also noted multiple lawsuits alleging Kaiser tried to game the Medicare Advantage program by submitting inaccurate diagnosis codes. The Department of Justice has joined six of those lawsuits.

Kaiser Permanente did not respond to a request for comment by time of publication.

Are recent labor actions getting nursing unions what they want?

While nurses in Cook County, Illinois, struck a deal in recent days, those on a three-month-plus strike against a Tenet hospital in Massachusetts plan a protest at the chain’s Dallas headquarters.

Thousands of healthcare workers have waged strikes this summer to demand better staffing levels as the pandemic brought greater attention to what happens when a nurse must take care of more patients than they can reasonably handle.

In New York, a report from the attorney general that found nursing homes with low staffing ratings had higher fatality rates during the worst COVID-19 surges last spring helped spur legislators to pass a safe staffing law long-advocated for by the New York State Nurses Association.

While unions elsewhere face a steeper climb to win the success found in New York, through strikes and other actions, they’re attempting to get new staffing rules outlined in their employment contracts.

Most nursing strikes include demands for ratios, or limits on the number of patients a nurse can be required to care for, Rebecca Givan, associate professor in the School of Management and Labor Relations at Rutgers University, said.

“And employers are very anxious about that because it threatens their bottom line, so often when a compromise is found, it’s something that approaches a ratio but maybe has a bit more flexibility,” Givan said.

Some have been successful, like the 1,000 Chicago-area nurses at Stroger Hospital, Provident Hospital and Cook County Jail who waged a one-day strike on June 24 after negotiating with the county over a new contract for nearly eight months.

They reached a tentative agreement shortly after the strike, stipulating the hiring of 300 nurses, including 125 newly added positions throughout the system within the next 18 months.

The deal also includes wage increases to help retain staff, ranging from 12% to 31% over the contract’s four-year term, according to National Nurses United.

Meanwhile, 700 nurses at Tenet’s St. Vincent Hospital in Worcester, Massachusetts, have been on strike for over 100 days over staffing levels. Nurses represented by the Massachusetts Nurses Association have been trying to get an actual nurse-to-patient ratio outlined for specific units in their next contract.

The two sides haven’t come close to reaching a deal yet, and some nurses will travel to Tenet’s headquarters in Dallas on Wednesday in an attempt to appeal to corporate executives, according to MNA.

At the same time, federal lawmakers wrote to Tenet CEO Ron Rittenmeyer seeking details on the chain’s use of federal coronavirus relief funds amid the strike and alongside record profits it turned last year.

The hospital denied lawmakers’ claims in the letter that Tenet used federal funds to enrich executives and shareholders rather than meet patient and staff needs, saying in a statement it strongly objects to the “mischaracterization of the facts and false allegations of noncompliance with any federal program.”

The strike is currently the longest among nurses nationally in a decade, according to the union.

A number of other major hospital chains have contracts covering their nurses expiring this summer, including for-profit HCA Healthcare and nonprofit Sutter Health.

Unionized nurses at 10 HCA hospitals in Florida have reached a deal on a new collective bargaining agreement, though members still need to ratify it, according to National Nurses United. The details are still unclear.

And after joining NNU just last year, 2,000 nurses at HCA’s Mission Hospital in Asheville, North Carolina, ratified their first contract Saturday, which includes wage increases and the formation of a nurse-led staffing committee.

Newly-formed unions take an average of 409 days to win a first contract, according to an analysis from Bloomberg Law. In the healthcare industry, new unions take an average of 528 days to win a first contract, the longest among all sectors examined.

Across the country at Sutter’s California hospitals, disputes haven’t been so easily resolved. Healthcare workers at eight Sutter hospitals planned protests throughout July “to expose the threat to workers and patients caused by understaffing, long patient wait times and worker safety issues at Sutter facilities,” according to Service Employees International Union United Healthcare Workers West, which represents the workers.

Similar to the ongoing Tenet hospital strike, SEIU is highlighting Sutter’s profits so far this year and the federal relief funds it received.

Striking Tenet nurses, hospital CEO trade jabs with no end in sight for standoff

About 800 nurses at a Tenet hospital are on the third week of a strike that’s shaping up to be one of the longest among healthcare workers in recent years.

At the hospital chain’s St. Vincent Hospital in Worcester, Massachusetts, nurses represented by the Massachusetts Nurses Association have been on strike since March 8 following a breakdown in negotiations over a new contract they’ve been bargaining for since November 2019.

Nurses have been active on the labor organization front in wake of the COVID-19 pandemic, and share a common issue at stake — staffing levels, and more specifically the nurse to patient ratio.

At St. Vincent, unionized nurses say their staffing has been worsened by the pandemic, affecting their ability to adequately care for patients. They point to hundreds of unsafe staffing reports filed by nurses over the past year, and the departure of more than 100 St. Vincent nurses over the past 10 months.

The hospital rejects those claims, and said only two citations have been issued by the Massachusetts Department of Public Health since 2019, according to a release.

The changes MNA is asking for are “excessive,” St. Vincent Hospital CEO Carolyn Jackson contended in an interview with Healthcare Dive, and the hospital cannot agree to the “aggressive” levels the union is proposing.

The two sides haven’t met again since the strike began, and do not have a timeline to get back to the table.

Right now, St. Vincent operates on staffing guidelines brokered after its nurses waged a 49-day strike over their first union contract in 2000Under those terms, one nurse in its medical surgical units can be assigned to either four or five patients.

The terms proposed by MNA stipulate that one nurse in those units would be assigned to four patients at a maximum. MNA is also asking for a five-nurse critical care float pool, and for the hospital to double its emergency department staff from 71 employees to 157, Jackson said.

California is currently the only state with mandated ratios of one nurse to five patients in medical surgical units.

“It has been our request for them to remove some of those unreasonable, or preferably all of those unreasonable staffing requests, and come back to the table and really work on getting a reasonable deal done,” Jackson said.

During the first week of the strike, the hospital paid over $5 million to hire replacement nurses, according to a release. When asked directly about how much the hospital has spent so far, Jackson declined to answer.

“It is definitely an added expense to the hospital, and that is challenging,” she said.

The strike in 2000 ended when both parties reached a deal brokered by former Sen. Ted Kennedy, D-Mass., that resulted in provisions to limit mandatory overtime and the staffing guidelines currently in place.

But this time it seems “there is no point at which anybody’s going to step in and settle this for the two parties,” Paul Clark, professor and director of Penn State’s school of labor and employment relations said.

The union has garnered support from Massachusetts lawmakers including Sen. Elizabeth Warren, Rep. James McGovern and former Rep. Joe Kennedy, who visited the picket line on March 12, along with state Attorney General Maura Healey, who visited Wednesday.

The Worcester City Council also approved a resolution in support of the striking nurses at St. Vincent on March 16.

But those moves wield little power to break the strike, although the political pressure could hurt the hospital.

“The increased cost is, perhaps, public opinion beginning to coalesce behind the union,” Clark said.

Strikes have costs for both sides, as nurses on the picket line have gone without pay for almost three weeks now.

“Until the cost becomes too great to one or the other sides, they’re going to continue down this road,” Clark said.

Healthcare executives fear for their organizations’ viability without a COVID-19 vaccine

https://www.healthcarefinancenews.com/news/healthcare-executives-fear-their-organizations-viability-without-covid-19-vaccine

A complete financial recovery for many organizations is still far away, findings from Kaufman Hall indicate.

For the past three years, Kaufman Hall has released annual healthcare performance reports illustrating how hospitals and health systems are managing, both financially and operationally.

This year, however, with the pandemic altering the industry so broadly, the report took a different approach: to see how COVID-19 impacted hospitals and health systems across the country. The report’s findings deal with finances, patient volumes and recovery.

The report includes survey answers from respondents almost entirely (96%) from hospitals or health systems. Most of the respondents were in executive leadership (55%) or financial roles (39%). Survey responses were collected in August 2020.

FINANCIAL IMPACT

Findings from the report indicate that a complete financial recovery for many organizations is still far away. Almost three-quarters of the respondents said they were either moderately or extremely concerned about their organization’s financial viability in 2021 without an effective vaccine or treatment.

Looking back on the operating margins for the second quarter of the year, 33% of respondents saw their operating margins decline by more than 100% compared to the same time last year.

Revenue cycles have taken a hit from COVID-19, according to the report. Survey respondents said they are seeing increases in bad debt and uncompensated care (48%), higher percentages of uninsured or self-pay patients (44%), more Medicaid patients (41%) and lower percentages of commercially insured patients (38%).

Organizations also noted that increases in expenses, especially for personal protective equipment and labor, have impacted their finances. For 22% of respondents, their expenses increased by more than 50%.

IMPACT ON PATIENT VOLUMES

Although volumes did increase over the summer, most of the improvement occurred in areas where it is difficult to delay care, such as oncology and cardiology. For example, oncology was the only field where more than half of respondents (60%) saw their volumes recover to more than 90% of pre-pandemic levels.

More than 40% of respondents said that cardiology volumes are operating at more than 90% of pre-pandemic levels. Only 37% of respondents can say the same for orthopedics, neurology and radiology, and 22% for pediatrics.

Emergency department usage is also down as a result of the pandemic, according to the report. The respondents expect that this trend will persist beyond COVID-19 and that systems may need to reshape their business model to account for a drop in emergency department utilization.

Most respondents also said they expect to see overall volumes remain low through the summer of 2021, with some planning for suppressed volumes for the next three years.

RECOVERY MEASURES

Hospitals and health systems have taken a number of approaches to reduce costs and mitigate future revenue declines. The most common practices implemented are supply reprocessing, furloughs and salary reductions, according to the report.

Executives are considering other tactics such as restructuring physician contracts, making permanent labor reductions, changing employee health plan benefits and retirement plan contributions, or merging with another health system as additional cost reduction measures.

THE LARGER TREND

Kaufman Hall has been documenting the impact of COVID-19 hospitals since the beginning of the pandemic. In its July report, hospital operating margins were down 96% since the start of the year.

As a result of these losses, hospitals, health systems and advocacy groups continue to push Congress to deliver another round of relief measures.

Earlier this month, the House passed a $2.2 trillion stimulus bill called the HEROES Act, 2.0. The bill has yet to pass the Senate, and the chances of that happening are slim, with Republicans in favor of a much smaller, $500 billion package. Nothing is expected to happen prior to the presidential election.

The Department of Health and Human Services also recently announced the third phase of general distribution for the Provider Relief Fund. Applications are currently open and will close on Friday, November 6.

Hartford HealthCare nurses begin strike

https://www.beckershospitalreview.com/hr/hartford-healthcare-nurses-begin-strike.html?utm_medium=email

Nurses strike begins at Backus Hospital in Norwich - Hartford Courant

Registered nurses at Hartford HealthCare’s Backus Hospital in Norwich, Conn., are launching a two-day strike Oct. 13 over alleged unfair labor practices, according to the union that represents them.

Backus Federation of Nurses, AFT Local 5149, which represents approximately 415 registered nurses at Backus Hospital and its partner medical facilities, and the hospital have been negotiating since June to resolve contract issues around patient care, workplace safety, and recruitment and retention, according to the union.

AFT Local says members want a fair contract that protects workers and patients, provides better access to personal protective equipment and allows the hospital to retain skilled registered nurses. However, the union contends the hospital has failed to bargain for a fair contract.

“We’d rather be at the bedside caring for our patients and hope a mutual resolution can be reached; but we cannot allow unfair labor practices to stand,” union President Sherri Dayton, RN, said in a statement shared earlier this month with Becker’s Hospital Review. “That’s why we marched on Hartford HealthCare’s executives to announce that we’re on strike if a settlement is not reached by Oct. 13.”

Nurses authorized a strike in September over these issues and issued a strike notice on Oct. 9.

Backus Hospital President Donna Handley, BSN, RN, said in a statement that the hospital has tried to avoid a strike and, over 23 bargaining sessions and using federal mediators, has continually addressed issues such as personal protective equipment, staffing and additional accommodations for breastfeeding.

The hospital’s offer includes wage increases for registered nurses amounting to 12.5 percent over three years, additional paid time off for 82 percent of registered nurses, and a 2 percent reduction to the cost of healthcare premiums.

Ms. Handley said the hospital has also offered to retain daily overtime for registered nurses and provided staff with additional paid time off during the pandemic and other support.

“In all of these and other ways, Backus Hospital has shown that we respect our nurses, we are prepared to find common ground, and we want to reach agreement on a fair contract,” she said. “The union, unfortunately, is prepared to strike, causing an unprecedented degree of disruption during an unprecedented health crisis.”

She said Backus Hospital will remain open during the strike and programs and services will remain accessible to community members.

Striking nurses at Illinois hospital return to work without new contract

https://www.healthcaredive.com/news/university-illinois-nurses-back-to-work-after-strike/585631/?utm_source=Sailthru&utm_medium=email&utm_campaign=Issue:%202020-09-22%20Healthcare%20Dive%20%5Bissue:29794%5D&utm_term=Healthcare%20Dive

Dive Brief:

  • Nurses at the University of Illinois Hospital in Chicago returned to work Monday following a weeklong strike over their new contract. The two sides were unable to reach an agreement despite negotiations “that ran well into the evening” each night of the strike and planned to resume talks Monday.
  • They made some progress on key issues. The hospital agreed to hire more than 200 nurses to quell staff-to-patient ratio concerns at the forefront of the strike, according to the Illinois Nurses Association. UIH also proposed slight wage increases for nurses opposed to previously offered freezes, though the union countered with larger increases, INA said.
  • UIH agreed that it’s closer to making a deal on the contract despite not reaching a tentative agreement. Nurses will report to work under the existing terms of their past contract until a new deal is reached.

Dive Insight:

Nurse staffing levels have been an issue since long before the COVID-19 pandemic, but the crisis has accelerated those concerns, along with labor activity, as clinicians on the front lines have faced grueling conditions.

Before the strike began, UIH said staff-patient ratios are too rigid and remove flexibility, instead favoring acuity-based models focused on “obtaining the right nurse at the right time for each patient.”

But it amended that proposal last week, now agreeing to hire 200 nurses “to improve the staffing ratio, addressing the most important issue the nurses insisted on as a primary reason to strike,” according to INA.

Illinois has a Safe Patient Limits bill before its legislature that would spell out the maximum number of patients who may be assigned to a registered nurse in specified situations. HB 2604 was introduced in February 2019 and is currently before the House rules committee, though it has not received a full vote.

On Sept. 11, the day before the UIH strike began, a judge granted a temporary restraining order forbidding nurses in certain critical care units from going on strike.

The lawsuit, filed by the University of Illinois Board of Trustees, claimed a work stoppage among those nurses would endanger public safety due to the unique nature of the services provided in the units, specialized needs of patients they serve and lack of qualified substitutes to perform nurses’ duties.

About 525 nurses out of 1,400 represented by INA were barred from striking at UIH, according to the union.

Two days after UIH nurses walked off the job, service workers at the university main campus, hospital and various other facilities also went on strike.

Some 4,000 clerical, professional, technical, service and maintenance workers represented by Service Employees International Union 73 went on strike Sept. 14 over similar issues as the nurses, mainly staffing and pay.

The planned duration of the SEIU strike is unclear, though it’s been a week since it began.

“As UIC nurses return to work, we will continue our strike,” the union said in a statement. “We won’t quit until UIC respects us, protects us and pays us. Working through a pandemic and seeing our co-workers die has stiffened our resolve to fight for however long it takes to ensure the safety of all workers and those we serve.”