Collective Bargaining in an Era of Healthcare Reform;
How One System Saved $18 Million Through Negotiations
Brian Sweeney, RN, FACHE
Vice President for Clinical & Support Services
Joseph Anton, RN
Vice President for Clinical & Support Services
Agenda
I. Organizational profile & union environment
II. Contract negotiations
III. Strike preparations
IV. Outcome and return on investment
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Objectives
 Describe how to formulate a strike plan to
strengthen your negotiating position and
minimize revenue loss from a work stoppage.
 Identify tactics to reduce operating expenses
associated with a collective bargaining
agreement.
 Demonstrate how to assemble a negotiating
team that will lead to optimal outcomes.
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I. Organizational Profile and Union
Environment
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Organizational Profile
 Philadelphia, PA
 953 bed academic health system
 3 hospitals
 46,000 admissions
 100,000 ED visits
 8,000 employees
 3 unions
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Key Facts – District 1199c
 Affiliate of National Union of Hospitals & Health Care
Employees, AFSCME, AFL-CIO
 72,500 national/17,000 local/1,ooo Jefferson members
 Experienced leadership team
 Simultaneous negotiations with 4 hospitals
 Previous strikes
 Key positions: EVS, nursing assistants, transport
sterile processing, nutrition, mail room & supply chain
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Different Times…Higher Stakes
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II. Contract Negotiations
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Negotiation Objectives
 Secure a realistic and responsible collective bargaining
agreement given ACA
 Maintain high quality care
 Protect patients, visitors, and staff
 Continue academic activities
 Maintain image/reputation
 Minimize revenue loss
 Provide consistent messaging
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Approach
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Engage multidisciplinary teams
Analyze data
Develop formal plans
Synchronize timelines
Communicate effectively
Educate union
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Negotiating Team
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Hospital administration
University administration
Human resources
Internal counsel
Outside labor counsel
Support – financial administration
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Starting Point
 Total annual cost of contract = $52.5 million
 Wages - $36 million
 Health and welfare - $12 million
 Pension - $3.9 million
 Training/legal - $720,000
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# 1 - Wages
 Challenges:
 Highest wages in marketplace
 Payroll drives pension costs
 Union will oppose anything reducing dues
 Goals:
 Preserve current workforce salaries
 Two tiered wage structure
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# 2 - Health and Welfare Benefits
 Challenges:
 Multi-employer plan
 Most costly benefit
 Rich plan with low co-pays
 High ED utilization & low PCP engagement
 Goals:
 Maintain contribution rate for 30 months
 Reduce benefit costs
 Activate disease management
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# 3 - Pension
 Challenges:
 Grossly underfunded
 Freeze is best option
 Limited options with federal requirements
 $62 million withdrawal liability
 Rate increase in 2014
 Goals:
 Migrate to defined contribution plan
 Develop hybrid alternative
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# 4 - Earned Time Off (ETO)
 Challenges:
 Poor attendance
 Paying OT to cover call outs
 “Right” to use time
 Implement for non-union employees first
 Goals:
 Migrate to ETO plan
 Resolve other matters first
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III. Strike Preparations
Contract Ratification or Strike?
 Potential scenarios
 Contract ratification
prior to expiration
 Contract
expiration/preannounced strike
 10-day notice
 Unannounced walkout
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Strike Preparations
 Challenges:
 Take firm position to reduce 1199C expenses, increasing
likelihood of a strike
 Uncertain when strike will occur
 Goals:
 Minimize disruptions to operations
 Maintain security for patients, visitors, and staff
 Maintain image/reputation through aggressive PR
Financial Implications of Strike
 Strike estimated to cost $1.5 million for 8 weeks
 Reduction of 1199C payroll helps offset expenses
 Reduced admissions budget
 Unable to quantify risk of PR/media exposure
Developing A Strike Plan
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Confidential playbook
Formal written document
Multidisciplinary involvement
Clear written procedures with accountability
Set timelines
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Replacement Staffing
 Staffing plan - day 1-7 - internal
 Redeploy non-clinical staff
 Train within 7 days of contract expiration - visible
 Staffing plan - day 8+ - external
 Large, experienced national firm
 Cost
 Authorization to deploy
 Logistics
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Security
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Jefferson
Outside security firm
Philadelphia Police
US Marshall Service
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PR/Communications
 Hired outside crisis
communication firm
 Developed tools for
departmental managers –
FAQs, progress reports
 Trained spokespersons for
media inquiries
 Prepared statements for
patients, media, & vendors
 Monitored social media
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Supply Chain
 Verified vendors will deliver
 Stockpiled medical/surgical supplies,
pharmaceuticals, and office supplies
 Secured refrigerated trailer for perishables
 Identified off site depots for deliveries
 Used undercover vehicles for deliveries
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Legal and Regulatory
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Prepared injunctions
Emergency arbitration hearing
Conducted management education
Reviewed communication
Hold union accountable for following laws
Notification to DOH/Joint Commission
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Table Top Exercises
 Test the plan
 Did people read it?
 Did we miss anything?
 Are we ready?
 Scenarios
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Access to loading dock will be impeded for an
extended period of time given an excessive
number of protesters.
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What is the alternate plan?
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How is it implemented?
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Labor Operations Center (LOC)
 Leads implementation of the
strike plan
 Staffed 24/7
 Labor hotline
 Monitor campus security
 Coordinate deliveries,
communication and staffing
 Monitor media activity and
coordinate response
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Staffing Center
 Coordinate logistics for inbound staff
 Travel, hotel, meals, transportation
 Identification
 Health screening and immunizations
 Scheduling
 Record keeping
 Training with department managers
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Security Responsibilities
 Demonstrate preparation to reassure patients/staff
 Protect perimeter
 Coordinate efforts with law enforcement
 Videotape picket line activities to gather evidence
 Provide executive protection
 Escort employees and vehicles safely in and out
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Rallies
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IV. Outcome and ROI
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Results
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Settled on July 1st at 3 am
Six year agreement
Health and welfare reopener in July 2014
$18,609,304 million in savings over life of
contract
 Wages/pension - $12,391,486
 Health and welfare - $1,913,868
 ETO -$4,303,680
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ROI
Cost of strike preparedness Legal fees Public relations firm Total Return –
$262,000
$240,000
$36,000
$540,000
35 x initial investment
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ETO
 OT hours per pay
 Before -
1,310
 After -
591
 Time off hours per pay
 Before -
5,887
 After –
2,388
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Lessons Learned
 Engage operational leaders in negotiations and
strike preparations
 Link negotiations to strike preparations
 Ensure preparations are visible
 Be sure you are ready to take a strike!
 Continue communication on terms after
ratification
 Understand role of other hospital settlements
 After action review – we will do it again in 6 years
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