Hospitals, labor unions clash over job cuts to maintain margins

Hospitals, under constant pressure to cut jobs and employee compensation in order to control costs, will likely have more contentious relationships with labor unions in the coming years, according to the Pittsburgh Post-Gazette.

Hospitals generally operate on margins of about 3 percent, while staffing represents 55 percent of their total costs. "There's only so many ways you can address it," Jim Smith, a senior vice president with The Camden Group, told the Post-Gazette. A Camden Group report concluded that hospitals will have to cut back on pay raises, eliminate jobs and outsource many services.

Michael Moschel, a partner with Bass, Berry & Sims, a Nashville law firm, concluded that the pressures between hospital management and labor will lead to increased frictions. "If there [are new] accountability measures and people are being held to a different or higher measures, that could lead to more organizing activity," Moschel told the Post-Gazette. He predicted more frequent standoffs over preservation of benefits and staffing ratios.

Union clashes with hospital management are a problem in several states, with actions ranging from walkouts to full-blown political campaigns. Voters passed a union-backed measure to cap executive compensation at El Camino Hospital in 2012, although it has yet to take effect due to litigation. The Service Employees International Union-United Healthcare Workers West is also pushing a statewide initiative to cap both hospital CEO compensation and hospital prices. And labor unions and providers battle over peripheral issues as well, such as whether providers can make it mandatory for front-line workers to receive flu shots.

To learn more:
- read the Post-Gazette article
- here's the Camden Group report

 

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