Nursing strikes cost Allina $149 million

Two contentious nursing strikes cost Allina Health more than $149 million last year, as the Minneapolis-based hospital and clinic system clashed with the Minnesota Nurses Association over changes in health insurance.

More than 4,000 nurses struck twice — for seven days in June and again for 37 days in the fall — after Allina demanded that they give up a union-backed health insurance plan and accept the same coverage offered other employees.

The cost of hiring replacements at the five struck hospitals exceeded Allina's operating income of $119 million for the year, according to a fourth-quarter financial report released Tuesday. Overall, however, Allina wound up in the black for the year because of strong returns from its investment portfolio.

"This number reflects the cost of fulfilling our commitment to provide uninterrupted and exceptional care," Allina spokesman David Kanihan said in an e-mail.

Hospital executives maintained during the strike that Allina's long-term health required them to phase out the nurses' costly health insurance plans. Nurses sought to retain those health plans, as well as increased staffing and workplace safety protections.

The compromise gradually phases nurses off their union-backed health plans but places Allina payments into flexible spending accounts and offers some guarantees over the benefit levels of their Allina corporate plans.

The contract affected about 4,800 nurses at Abbott Northwestern Hospital and the Phillips Eye Institute in Minneapolis, United Hospital in St. Paul, Mercy Hospital in Coon Rapids and Unity Hospital in Fridley.

Allina's financial report noted that the strike cost could change, as the health system is still sorting out costs with some of the contractors it hired during the strike. The final number will be published in late March.

Jeremy Olson • 612-673-7744