Allina Health spent more than $104 million to keep its Twin Cities hospitals open during two nursing strikes this year, according to a financial report released Monday.
The total matched the amounts that had been rumored on the picket lines, where striking nurses grumbled that all the stopgap spending could have been spent to preserve their benefits.
An Allina official on Monday called it a regrettable but necessary expenditure in the organization's effort to hold the line against costly health insurance plans used by the nurses. The two sides reached a deal in mid-October that moves the nurses from their union health plans to Allina's own plans in exchange for other benefit concessions from Allina..
"We look at that as an investment in securing a sustainable cost structure over the long term for our health insurance benefits," said Allina spokesman David Kanihan. "We had hoped to avoid making this investment."
Allina spent $20 million on more than 1,200 replacement nurses and related expenses during a seven-day strike in June, and then $84 million for the September portion of a strike that started Sept. 5 and ended Oct. 16, according to the third-quarter financial report. Strike spending in October won't be publicly reported until Allina releases its year-end financial details for 2016.
Many of the replacement nurses came from other states and commanded premium wages, especially as the second strike dragged on, and Allina also had to train, transport and house them. As a result, Allina reported an operating loss of $13 million through the first three quarters of 2016, compared to a $102 million gain over the same time period in 2015, when there was no strike.
The health system still made money, though, thanks to a healthy stock market in early 2016 and $73 million in investment returns.
The prolonged labor dispute centered on health benefits. Hospital nurses had maintained rich health plans with low or no deductibles that Allina officials believed would be subject as of 2020 to a new federal "Cadillac" tax.
