The high cost of nursing strikes at Allina Health: $149M and counting

Strike signs
Two nursing strikes at Allina Health last year cost the system $149 million with most of the money spent on replacement nurses to care for patients while staff walked the picket lines.

Two nursing strikes at Allina Health last year cost the system $149 million, with most of the money spent on replacement nurses to care for patients while staff walked the picket lines.

The high costs of the labor dispute wiped out 2016 operating revenue for the Minneapolis-based hospital and clinic system, the StarTribune reports.

The system’s fourth-quarter financial report revealed that the cost of hiring 1,500 replacements for nurses at its 5 hospitals exceeded its operating revenue of $119 million. “This number reflects the cost of fulfilling our commitment to provide uninterrupted and exceptional care,” Allina spokesman David Kanihan told the newspaper.

But the final cost for the strike may be higher than the fourth-quarter figures indicate. The system still hasn’t accounted for all the costs associated with contractors it hired during the strike, according to the report. That number will be published in late March.

The labor dispute first began in June 2016 when 4,800 nurses went on strike for 7 days in protest of the system’s demands to phase out costly health insurance plans. In the fall nurses went out on strike again, this time for 37 days. But the nurses finally agreed to give up their union health benefits in favor of Allina’s corporate health plan.

Industry experts said at the time that the resolution could have nationwide implications because the health system could ride out the strike by hiring replacements, what they considered to be a cost-effective option. But the new figures related to the costs of the strike may make hospital leaders rethink that strategy.

Last year saw a rise in healthcare union activity across the country. And just this week nurses at Essentia Health Northern Pines, a 16-bed critical-access hospital and 50-bed long-term care facility in Aurora, Minnesota, authorized a strike, according to the Hibbing Daily Tribune.  The dispute centers on the organization’s desire to remove a successorship clause, which the union says would allow Essentia to sell the nursing home and lay off staff.

The newspaper reports that Essentia is developing a contingency plan to keep the organization in operation in case of a strike.