In a blow to the Lifespan health system, which says it’s built up a $12 million deficit in the first five months of its 2009 fiscal year, the United Nurses & Allied Professionals, the union that represents about 2,100 Rhode Island Hospital workers, recently rejected a request for “givebacks” on the wages and benefits they’d negotiated in a contract just two years ago.
UNAP director Rick Brooks answered questions about the 876-to-14 vote and the reasons for it.
PBN: The union has suggested that despite any setbacks, Lifespan is still financially strong enough to stand by its contract. How strong do you feel the company is?
BROOKS: Most businesses and most workers have seen their assets decline over the past year, and this is true for Lifespan and its employees as well. And certainly these are difficult times for hospitals, who are faced with the prospect of declining payments from state and federal sources, combined with a growing number of uninsured patients. But Lifespan has also made more than $300 million in profits – well in excess of their budgeted targets – over the past seven years, including the most recent fiscal year, ending last Sept. 30. In fact, this is the explanation that Lifespan offers for why its CEO received salary and bonuses totaling nearly $3 million in 2007, and why Lifespan executives were awarded bonuses this past December. When times are good, it seems that Lifespan pays bonuses to its executives, but when the times are bad, they turn to employees for cuts.
PBN: Do you believe Lifespan has other ways to make up any shortfalls it now faces?
BROOKS: This is certainly not the first time that Lifespan could see a net loss from operations for the fiscal year. For example, Lifespan lost approximately $11 million from operations in fiscal 1994, $50 million in 1998, and $34 million in 2001. Lifespan’s revenues from operations, as well as from its sizable investments, ebb and flow. Lifespan has recovered well from past downturns and without imposing wage or benefit cuts on its employees.
The 2,100 UNAP members who work at Rhode Island Hospital care deeply about the well-being of the hospital and its patients. Even as Lifespan was earning record profits in recent years, our members were enduring very tight budgets that called upon them to take care of critically ill patients with very lean staffing levels. In spite of this, UNAP leaders and members have worked with Rhode Island Hospital to improve patient safety and quality, increase patient satisfaction scores, decrease the risk of on-the-job injuries, control health insurance costs, provide continuing education for health professionals, and develop career ladder programs to address the looming nursing shortage. Each of these joint efforts contributes to increasing revenue and decreasing costs for Lifespan.
PBN: How substantial were the givebacks the company sought, and what kinds of concessions had the union already made in the last contract negotiations?
BROOKS: Lifespan asked our members to permanently forgo a previously agreed-upon 4-percent pay increase this coming July 1. This means that our average member would lose approximately $2,400 per year for every year that they remain with Lifespan. Lifespan was also seeking cuts in education benefits, longevity pay and vacation accruals. Ironically, our current contract, which runs from July 1, 2007, through June 30, 2011, was negotiated early at Lifespan’s request, and has a duration of four years because Lifespan was seeking the stability and predictability of a long-term agreement. In addition to agreeing to a longer contract, our Union also agreed to increase our health insurance co-share from the previous 11 percent of premiums to 15 percent. When this is combined with the annual increase in the cost of health insurance, our members are experiencing double-digit increases in their health care costs. This is in addition to significant benefit plan design changes that we agreed to in previous years. So we believe we have done our part in negotiations, and we will consider additional compromises, if they are warranted, in our next contract.
PBN: So far, the health care sector has had relatively few layoffs, though places such as Kent Hospital have cut back their staff. Are you concerned about possible layoffs at Lifespan hospitals?
BROOKS: In these tough economic times, no one can ensure that there will never be layoffs. In fact, Lifespan was careful to point out that even with concessions, there are no guarantees. But that said, Rhode Island Hospital is still very busy, and still has dozens of vacant positions, so there doesn’t appear to be an immediate risk of layoffs in direct patient care areas. Of course, there is always a possibility that if there is a sustained decrease in patient volume in a particular service, there could be a reduction in force. We will continue to work with the hospital, as we have in the past, to avoid job losses wherever possible.
PBN: Are you concerned about other issues, outside labor-management relations, that could make a big impact on Lifespan and its workers?
BROOKS: There are many external challenges facing Lifespan and its employees, including state and federal budget cuts, rising numbers of uninsured patients, decreases in elective procedures, and competition from out-of-state hospitals and freestanding outpatient facilities. Our health care system is likely to undergo many changes in the coming years which may impact how and where we get our care, and our hospitals will not be immune from those changes. UNAP will continue to advocate for adequate funding, as well as systemic reforms, to ensure that all Rhode Islanders have access to affordable health care services, and that our hospitals and other health care providers have the resources necessary to meet the health care needs of our state.
