Nursing strike would weaken Minnesota hospitals financially

A three-day nursing strike this fall was costly for Twin Cities and Duluth hospitals, but it could be small change compared with the next walkout by as many as 15,000 nurses for up to 20 days.

Allina Health spent nearly $23 million to weather the Sept. 11-13 strike, mostly by flying in replacement nurses, while Fairview Health spent $25 million and Children's Minnesota spent nearly $7 million, according to financial statements. A prolonged strike could cost hundreds of millions of dollars for Minnesota hospitals that collectively are losing money on operations this year.

"With the health care workforce shortages and with the financial crisis, the hospitals and health care systems are already in a category 2 storm," said Dr. Rahul Koranne, chief executive of the Minnesota Hospital Association, using hurricane classifications as an analogy. "If there is going to be a work stoppage, that has the potential to turn the current crisis into a category 5 storm."

Leaders of the Minnesota Nurses Association acknowledged the pressures of the strike, which they announced Thursday and plan to start at 7 a.m. Dec. 11. But they said understaffing has been a concern for years, and has gotten worse — with nurses overwhelmed by patient volumes and pulling back-to-back shifts when nobody else is available to care for them.

"Nurses can't go on like this. Our hospitals can't go on like this," said Mary Turner, union president and an ICU nurse at North Memorial Health in Robbinsdale. "This is our power to win the contracts we need."

Money might not be the biggest problem. Allina and Fairview, two of the state's largest health systems, each lost more than $100 million on operations in the first nine months of 2022. However, they each have more than $1.4 billion in cash and assets on hand, and even larger investment portfolios, that they can lean on if needed — just as Allina did in 2019 when two strikes by its nurses cost $104 million.

But demand has increased since September's strike, when Minnesota hospitals had about 7,200 inpatient beds occupied each day. Surges of RSV and influenza combined with COVID-19 and the usual winter sidewalk slips and car crashes to send that total on many days to more than 8,000.

Even if they recruit the same numbers of replacement nurses as they did this fall, the effort won't stretch as far, said Dr. Marc Gorelick, chief executive of Children's, which operates hospitals in Minneapolis and St. Paul. "It's the worst possible time to reduce that capacity by having a strike that pulls our nurses away from their patients."

Children's stopped admitting patients to its new psychiatric unit in St. Paul on Saturday and expects to reduce intensive care capacity during the strike from 62 beds to 33. Critically ill children might be transferred out of state.

Other hospitals are waiting to tally replacement nurses they recruit before deciding whether to close units. December is popular for elective surgeries — when people have met yearly insurance deductibles — but some are likely to be rescheduled into 2023.

Both sides want a deal. Talks ran late Thursday and Friday, and continued over the weekend.

Nurses dropped wage demands from more than 30% over three years to 20%, and hospitals increased their offers from 10% to as high as 15%. Nurses dropped some staffing demands but want hospitals to automatically re-evaluate nurse-to-patient ratios in units where patient falls, bed sores and other preventable problems are increasing.

Every day closer to a strike means money spent. Fairview already reserved busses to transport replacement nurses to work, said Joe Campbell, a Fairview spokesman. The health system is buying time for negotiations by delaying hiring of replacements, who command double or triple usual wages and come with travel, lodging and training expenses.

"We're holding off as long as possible," he said.

Strikes and contract delays also siphon money that hospitals could spend on their regular nurses. Hospitals were supposed to reach three-year contracts with nurses in June, and it's unclear if raises in an eventual agreement will be paid retroactively for the first year.

Raises for only half a year would be upsetting for nurses who are stressed and burned out by the pandemic, said Kelley Anaas, an ICU nurse at Allina's Abbott Northwestern Hospital in Minneapolis. "For anyone keeping track, we are now almost six months past when our contracts expired," she said.

Strikes in the Twin Cities are scheduled for North Memorial and Children's; Methodist Hospital; Allina's Abbott Northwestern, Mercy and United hospitals; and M Health Fairview's Southdale and St. John's hospitals and the west campus of the University of Minnesota Medical Center.

Strikes also are set for Essentia hospitals in Duluth and Superior, Wis., and St. Luke's hospitals in Duluth and Two Harbors. All strikes would end no later than Dec. 31, except those at St. Luke's, which would continue indefinitely.

Hospitals are gambling with a hard-line stance in negotiations with nurses, who generally have public support, said Dr. Timothy Sielaff, an executive fellow and health care management educator at the University of St. Thomas in St. Paul. Sielaff was chief medical officer of Allina during the 2016 strikes.

He said nurses are gambling, too, by seeking raises that most workers aren't getting. But there is little question about the staffing pressures driving their demands. Job vacancies for nurses and other hospital caregivers tripled in Minnesota this year.

"While the financial issues are real — I would never minimize those — I think there is something deeper and more important behind what the nurses are saying and even the physicians are saying about burnout, moral injury" and other professional issues that are causing them to quit, Sielaff said.

Hospitals leaders said raises should boost retention, though they argued that Minnesota nurses already have some of the highest wages in the country when adjusted for cost of living differences among states. Essentia proposed raising its starting full-time nursing salary to $77,000, and escalating pay above $100,000 in three years to incentivize young nurses to stay.

Hospitals also want state investments in training and student loan forgiveness to entice more students to health care careers. Gorelick said Minnesota should join with the majority of states in a licensure compact, which would get nurses recruited from out-of-state on the job much faster.

"The union and (hospitals) want to have enough nurses to care for patients, and do it well," the Children's chief executive said. "Where we disagree are the best ways to get there."

Nurses have traded staffing solutions in prior negotiations, including after a one-day strike in 2010 when they reached a contact that preserved pensions and benefits. But Angela Becchetti, an Abbott nurse and union board member, said understaffing has worsened, pushing nurses to their limits and increasing the need for staffing guarantees in the next contract.

"After the pandemic," she said, "we are stretched even thinner."