Bargaining tactics saved Thomas Jefferson millions

Hard-nosed and extremely organized negotiations with its three labor unions bore fruit for Thomas Jefferson University Hospital in Philadelphia: savings of nearly $19 million in its new contract with three unions representing non-medical staff.

Such savings are critical at a time of tight operating margins, said executives with the hospital during a presentation at the Healthcare Financial Management Association's annual national institute in Orlando, Fla., last week. And the Jefferson executives accomplished this at a time when hospital-related work stoppages are fairly common.

One of the keys to the negotiating success was closely involving senior management with the negotiations from the beginning, according to Brian Sweeney, the hospital's vice president for clinical and support services.

"Contracts used to be finalized with a few people from human resources and some attorneys," Sweeney said. Instead, the most recent negotiations included 10 executives from the hospital's staff, whose presence he said was "critical."

Thomas Jefferson was able to negotiate a two-tiered wage structure, including lower starting pay for new employees. It also was able to negotiate far larger health insurance co-payments for emergency room visits--a sorely needed concession because the hospital's unionized employees were visiting the ER an average of 1.5 times per year. And, the unions agreed to pool sick days with vacation days. That was another important concession because workers in the union were taking an average of 11 sick days per year, causing overtime costs to rise.

Thomas Jefferson's management team also prepared for a potential strike, setting aside $1.5 million to stockpile medical supplies, boost security and beef up public relations in case there was a work stoppage.

As a result, the contract will cost the hospital $18.6 million less than originally forecast. And the union agreed to a six-year contract to guarantee greater security for its workers.

"They saw the value of a longer pact," Sweeney said.