3 - Becker`s Hospital Review
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Transcript 3 - Becker`s Hospital Review
Collective Bargaining in an Era of Healthcare Reform;
How One System Saved $18 Million Through Negotiations
Brian Sweeney, RN, FACHE
Vice President for Clinical & Support Services
Joseph Anton, RN
Vice President for Clinical & Support Services
Agenda
I. Organizational profile & union environment
II. Contract negotiations
III. Strike preparations
IV. Outcome and return on investment
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Objectives
Describe how to formulate a strike plan to
strengthen your negotiating position and
minimize revenue loss from a work stoppage.
Identify tactics to reduce operating expenses
associated with a collective bargaining
agreement.
Demonstrate how to assemble a negotiating
team that will lead to optimal outcomes.
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I. Organizational Profile and Union
Environment
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Organizational Profile
Philadelphia, PA
953 bed academic health system
3 hospitals
46,000 admissions
100,000 ED visits
8,000 employees
3 unions
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Key Facts – District 1199c
Affiliate of National Union of Hospitals & Health Care
Employees, AFSCME, AFL-CIO
72,500 national/17,000 local/1,ooo Jefferson members
Experienced leadership team
Simultaneous negotiations with 4 hospitals
Previous strikes
Key positions: EVS, nursing assistants, transport
sterile processing, nutrition, mail room & supply chain
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Different Times…Higher Stakes
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II. Contract Negotiations
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Negotiation Objectives
Secure a realistic and responsible collective bargaining
agreement given ACA
Maintain high quality care
Protect patients, visitors, and staff
Continue academic activities
Maintain image/reputation
Minimize revenue loss
Provide consistent messaging
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Approach
Engage multidisciplinary teams
Analyze data
Develop formal plans
Synchronize timelines
Communicate effectively
Educate union
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Negotiating Team
Hospital administration
University administration
Human resources
Internal counsel
Outside labor counsel
Support – financial administration
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Starting Point
Total annual cost of contract = $52.5 million
Wages - $36 million
Health and welfare - $12 million
Pension - $3.9 million
Training/legal - $720,000
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# 1 - Wages
Challenges:
Highest wages in marketplace
Payroll drives pension costs
Union will oppose anything reducing dues
Goals:
Preserve current workforce salaries
Two tiered wage structure
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# 2 - Health and Welfare Benefits
Challenges:
Multi-employer plan
Most costly benefit
Rich plan with low co-pays
High ED utilization & low PCP engagement
Goals:
Maintain contribution rate for 30 months
Reduce benefit costs
Activate disease management
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# 3 - Pension
Challenges:
Grossly underfunded
Freeze is best option
Limited options with federal requirements
$62 million withdrawal liability
Rate increase in 2014
Goals:
Migrate to defined contribution plan
Develop hybrid alternative
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# 4 - Earned Time Off (ETO)
Challenges:
Poor attendance
Paying OT to cover call outs
“Right” to use time
Implement for non-union employees first
Goals:
Migrate to ETO plan
Resolve other matters first
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III. Strike Preparations
Contract Ratification or Strike?
Potential scenarios
Contract ratification
prior to expiration
Contract
expiration/preannounced strike
10-day notice
Unannounced walkout
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Strike Preparations
Challenges:
Take firm position to reduce 1199C expenses, increasing
likelihood of a strike
Uncertain when strike will occur
Goals:
Minimize disruptions to operations
Maintain security for patients, visitors, and staff
Maintain image/reputation through aggressive PR
Financial Implications of Strike
Strike estimated to cost $1.5 million for 8 weeks
Reduction of 1199C payroll helps offset expenses
Reduced admissions budget
Unable to quantify risk of PR/media exposure
Developing A Strike Plan
Confidential playbook
Formal written document
Multidisciplinary involvement
Clear written procedures with accountability
Set timelines
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Replacement Staffing
Staffing plan - day 1-7 - internal
Redeploy non-clinical staff
Train within 7 days of contract expiration - visible
Staffing plan - day 8+ - external
Large, experienced national firm
Cost
Authorization to deploy
Logistics
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Security
Jefferson
Outside security firm
Philadelphia Police
US Marshall Service
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PR/Communications
Hired outside crisis
communication firm
Developed tools for
departmental managers –
FAQs, progress reports
Trained spokespersons for
media inquiries
Prepared statements for
patients, media, & vendors
Monitored social media
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Supply Chain
Verified vendors will deliver
Stockpiled medical/surgical supplies,
pharmaceuticals, and office supplies
Secured refrigerated trailer for perishables
Identified off site depots for deliveries
Used undercover vehicles for deliveries
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Legal and Regulatory
Prepared injunctions
Emergency arbitration hearing
Conducted management education
Reviewed communication
Hold union accountable for following laws
Notification to DOH/Joint Commission
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Table Top Exercises
Test the plan
Did people read it?
Did we miss anything?
Are we ready?
Scenarios
Access to loading dock will be impeded for an
extended period of time given an excessive
number of protesters.
What is the alternate plan?
How is it implemented?
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Labor Operations Center (LOC)
Leads implementation of the
strike plan
Staffed 24/7
Labor hotline
Monitor campus security
Coordinate deliveries,
communication and staffing
Monitor media activity and
coordinate response
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Staffing Center
Coordinate logistics for inbound staff
Travel, hotel, meals, transportation
Identification
Health screening and immunizations
Scheduling
Record keeping
Training with department managers
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Security Responsibilities
Demonstrate preparation to reassure patients/staff
Protect perimeter
Coordinate efforts with law enforcement
Videotape picket line activities to gather evidence
Provide executive protection
Escort employees and vehicles safely in and out
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Rallies
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IV. Outcome and ROI
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Results
Settled on July 1st at 3 am
Six year agreement
Health and welfare reopener in July 2014
$18,609,304 million in savings over life of
contract
Wages/pension - $12,391,486
Health and welfare - $1,913,868
ETO -$4,303,680
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ROI
Cost of strike preparedness Legal fees Public relations firm Total Return –
$262,000
$240,000
$36,000
$540,000
35 x initial investment
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ETO
OT hours per pay
Before -
1,310
After -
591
Time off hours per pay
Before -
5,887
After –
2,388
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Lessons Learned
Engage operational leaders in negotiations and
strike preparations
Link negotiations to strike preparations
Ensure preparations are visible
Be sure you are ready to take a strike!
Continue communication on terms after
ratification
Understand role of other hospital settlements
After action review – we will do it again in 6 years
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