Nurses union resists concessions

1

JERREY ROBERTS

Cooley Dickinson Hospital, shown in 2008.

NORTHAMPTON - For the second year in a row, Cooley Dickinson Hospital, the Valley's seventh-largest employer, is resorting to layoffs to close a budget gap.

With negotiations between hospital management and its nurses union at a stalemate - and revenues sapped by lower state health care reimbursements - as many as 20-25 employee layoffs could be announced Monday, according to the hospital's Chief Executive Officer Craig N. Melin.

Registered nurses, who were largely spared in last year's round of layoffs, would likely feel the brunt of these cuts, Melin said.

Last year, Cooley Dickinson, which serves a population of about 150,000 people, laid off or reduced the hours of 81 employees.

Melin said the new round of staff cuts would not be as drastic as the ones made in 2008.

"It's going to be way smaller than last time," Melin said. "There will be no impact to care delivery. It will impact how it is we do that.

"We're caught in a squeeze," he said of the hospital's financial situation.

But Patti Williams, a representative for the Massachusetts Nurses Association, disagrees.

"What the community needs is care at the bedside, and you need nurses to have that care," Williams said. "More than anything else, that should be their priority."

Although some layoffs are inevitable, getting employees to agree to concessions would soften the blow, Melin said.

Hospital administrators are pushing unions to agree to changes to employee pensions and sick time benefits as well as delaying raises, concessions that could save the hospital about $2 million, Melin said.

The Service Employees International Union, which represents nine LPNs, or licensed practical nurses, has agreed to the concessions. The MNA, which represents 270 RNs, or registered nurses, has not.

The MNA has the weekend to come to an agreement with hospital management. If an accord is not reached, layoff notices will be issued Monday.

It appears unlikely that the MNA will change its position. An MNA picket is planned for Monday starting at 4 p.m. in front of the hospital.

"This is not a matter of them suffering a huge loss at this point," said Williams, citing Cooley Dickinson's $8.9 million surplus in the third quarter of fiscal 2009, the largest the hospital has accrued in five years.

"They said they wanted to make more money and they didn't," she said. "Now they want to take it out of employee benefits, and if they can't get that, then they want do to layoffs, and we think that's outrageous."

The hospital, which employs about 1,900 people, has implemented some cost-cutting measures, including taking energy-saving steps, shortening patient stays, and reducing expenses.

Before taking such steps, the hospital had been eyeing a $10 million budget gap for this fiscal year, largely due to declines in state reimbursements, the dismal state of the economy and the rising cost of doing business, Melin said. The cost of running the hospital is expected to increase by about $7 million this year alone due to increases such as employee raises, pensions and equipment maintenance or purchases.

"The revenues are down and the cost is up; it's created an imbalance," Melin said.

Cooley Dickinson's situation is not unique. Hospitals across the country are making cuts in response to the economy, according to the American Hospital Association.

According to the AHA, nine in 10 hospitals have made cutbacks to address economic concerns. Nearly half have reduced staff, eight in 10 have cut administration, and one in five has reduced services to the community.

Due to cuts in Medicare and Medicaid reimbursements, revenues to Cooley Dickinson are projected to decline by $1.4 million this fiscal year, which began Oct. 1.

Medicaid reimbursements from the state, which has suffered more than $8 billion in lost tax revenue since 2008, have been slashed and now cover 60 percent of medical costs. Medicare was reduced to covering 75 percent of costs.

Also, with people losing their insurance, or moving to lower-paying jobs due to the bad economy, Melin estimated the hospital would lose another $1.3 million this year in revenue.

The hospital offset about $7 million of the $10 million gap through regular revenue growth, some price increases coupled with shorter patient stays, energy savings and cutting back on some expenses, Melin said.

Hospital administrators are proposing to eliminate the remaining $3.1 million gap through concessions in benefits and delayed raises for the hospital's workers, along with layoffs.

Melin said the hospital still plans to make good on $1 million in employee raises in 2010.

Union challenge

Williams, the MNA official, maintains that the hospital can cover the budget gap without staff cuts, noting the fiscal 2009 third quarter surplus of $8.9 million.

Melin acknowledged the surplus but said it is necessary to the hospital's financial stability. During a nationwide physician shortage, Melin said about $3 million from the surplus is for guaranteed wages to new doctors while they build up their practices. The remaining $5 million in surplus is necessary to keep the hospital's creditors from requiring immediate repayment of borrowed money or increasing interest rates, he said.

But as Monday approaches, the stalemate between the hospital and the nurses appears intact.

"A contract is a contract," Williams said. "They say they have a crisis and they need to open up for concessions, but if they had a windfall I know I couldn't go knocking on their door and say remember that 4 percent (raise), well let's make it 8 percent now that you have the money. I'd be laughed out of the room."

Kristin Palpini can be reached at kpalpini@gazettenet.com.