MN Nurses Strike Advances Hospital Safety, Quality Debate, Need for New

System

By Joel Albershealth economist, clinical pharmacist

Universal Health Care Action Network-MN612-636-3838, joel@uhcan-mn.org

July 12, 2010

Hospital Safety,Quality of Care

Deterioration in Quality of Care

• 1999 Institute of Medicine landmark report found medical errors in hospitals kill up to 98,000 people/yr,8 th leading cause of death in U.S.

• IOM “Care W/out Coverage report found 44,000 unnecessary deaths every year in U.S.

• WHO: Health System Rating US Ranks 37th in the World in quality of care who.int/whr/2000/en/report.htm

• ER Waiting time is 1 hr before seeing a M.D., up from 38 minutes in 1997.

Mandated Nurse:Patient Ratios Calif

• Associated w/ significantly lower mortality• Less nurse burnout• Greater job satisfaction• 22,336 hospital staff nurses surveyed, cross-sectional• Data supporting this association growing; 90 studies

Source: Implications of the California nurse staffing mandate for other states. Health Services Research,pp1-18, http://tinyurl.com/y7rdzys

Nurse Staffing Improves Care

• Increased hours of nursing care is associated with better care of hospitalized patients

Needleman et al NEJM 2002

VA: Highest quality care

• Outperformed other providers by 20% in prevention

• Significantly better in chronic disease,overall quality

• Coordinated approach to care

• Systemwide electronic health record

• Excellent quality measurement tools

• Source: Elizabeth McGlynn, RAND Health

MN Hospital Financial Trends

Hospitals are Largest Component of Health Care Spending, 2005:

15%

12%

15%

3%

3%

22%

29%

17%

11%

9%

5%

3%

23%

33%

0% 5% 10% 15% 20% 25% 30% 35%

Other Spending

Prescription Drugs

Long Term Care (includingHome Care)

Dental Services

Other Professional Services

Physician Services

Hospital Care

Minnesota U.S.

Note: Some spending included in hospital services in the national estimate is defined as long term care spending in the Minnesota estimates.Sources: MDH Health Economics Program and Centers for Medicare and Medicaid Services (estimated spending for health services and supplies).

Minnesota Hospitals are Profitable: Net Income as % of Revenue, 1998 -08

6.5%

5.7%6.1%

4.4%

5.1%5.3%

6.6%6.9%

5.6%

7.3%

2.7%

0%

1%

2%

3%

4%

5%

6%

7%

8%

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008

Source: MDH, Health Care Cost Information System

MN’s Largely “Non-profit” Hospitals accrue even more profit

Non-profit

requirements

Total

in millions

% of operating expenses, 2005

Value of tax exemptions

$ 482.0 5.0%

Uncompensated care

$ 191.2 2.0%

Source:Mn Hospitals: Uncompensated care,community benefits,and the value of tax exemptions,Mn Dept

Health,2007.

Despite Profits,MN Hospitals Cut 100s of Jobs during recession

• Park Nicollet 233• North Memorial 380• Allina 300• Fairview 175• HCMC 100• Regions 30

Source: Recession afflicting metro-area hospitals, Mpls-St Paul StarTribune, Dec 7,2008, other articles.cuts include clinical staff.

Yet Major Capital Expenditure Commitments by MN Hospitals

2007 2008

Percent of Minnesota hospitals reporting major capital expenditure commitment

29.9% 26.1%

Total number of capital expenditure commitments reported

95 95

Value of major capital expenditure commitments reported ($ millions)

$1,118.2 $458.3

Major spending commitments that are reportable under 62J.17 include expenditures in excess of $ 1 million.Source: MDH, Health Care Cost Information System

MN Hospital and Insurance Structure

HEALTHCARE INFRASTRUCTURE:Enough to serve all Minnesotans

• 127,142 healthcare practitioners & technicians

• 140 hospitals with a total of 16,503 staffed beds

• 413 nursing homes• 1,023 home care providers

(facilities and services)

4 HMOs Control MN Health Care

• Blue Cross-Blue Shield 2 million members

• Medica 1 million members

• HealthPartners 660,000 members

• Preferred One 600,000 members

• These 4 insure 9 of every 10 insured Minnesotans • Own or investors in most of MN’s major hospitals & clinics• 646 HMOs and commercial insurers are licensed to sell health and accident

insurance in the state of Minnesota

Source: HMO companies,2002. MN Dept of Health, MN Dept of Commerce

Allina 27%, 29.2%

Fairview University 26%, 20.9%HealthEast12.0%, 12.1%

Hennepin Cty 8%,6.3%

HealthPartners,(was Regions) 7%,7.6%

Methodist 6%

Children’s 5%,5.6% Other non-affiliated 3%,3.9%

Twin Cities Hospital Market Share*,1996 & 2001

Source: MN Dept of Health, Consolidation in MN’s Health Care Market, Issue Brief 98-04, MN Managed Care Review 2002, Part one

*Measured as % of Inpatient Admissions

N.Memorial 7%,7.8%

Implications of Fixed costs

• Once a facility or service is up and running, we pay for it whether it is used or not

• Trying to save money by keeping patients out of the hospital is like trying to save money on schools by keeping kids home for the day

• It is much more cost effective to invest in only what we need.

Hospital Administrative Budget Squeezes Clinical Budget

Growth of Registered Nurses and Administrators

0%

500%

1000%

1500%

2000%

2500%

1970197519801985199019952001

Growth since 1970

AdministratorsRNs

Source:Bureau of Labor Statistics & Himmelstein/Woolhandler/Lewontin Analysis of CPS Data

0

500

1000

1500

2000

2500

1970 1975 1980 1985 1990 1995

Administrators

RNs

Physicians

Do you want your

health care

dollars spent

Here or

Here?

Nurses, Labor Unions & Health Care

Health Care Problems for Labor Union Members

*More time is spent negotiating benefits than wage increases

*Wage increases are often eaten up by rising health care costs

*Health care benefits suspended while members are on strike

*Employers are shifting ever more costs of health care to working families

Source: MN COACT

8 Labor Union Strikes Provoked by Health Costs

• 2005 Crosby-Ironton Teachers

• 2004 Bus Drivers ATU 1005

• 2003 AFSCME 3800 U of MN

• 2002 Teachers in Red Wing

• 2002 Teachers in International Falls

• 2001 Nurses Fairview Hosp;

• 2001 MN Assn Prof. Employees

• 2000 HERE , Hotel and Restaurant Union• 2000 Teamsters Mpls Pepsi

Hospital Workers Strike Their Own Hospitals 4 Times April & May 2003

*Service Employees Int’l Union 900 members walked out of United Hospital & Children’s Hospital

*SEIU says Hospital charges workers 2 x as much as CEOs for health insurance

*United Worker’s family $479/mo, CEO $153/mo

*Other hospitals too,strike approval all 90%

Source: Union Advocate, April 24,2003,p1,5;May 15,p4

22 Day Strike by 1,350 MN RNs, 2001*MNA says: “Patient care is being compromised in our hospitals because not enough

nurses are on staff”*Allina spent $8.6 million, Fairview $5 million in RN OT pay,2 000

*RN rural MN worked 42 days w/ only 1 day off*RNs seek say in patient flow, workload, staff levels; pay, benefits

*Hospitals refused to negotiate these issues in a meaningful way*“We cannot and will not accept these conditions for ourselves or for those who follow us

in this profession”

*New contract upped Fairview’s share of premiums from the current 65- 68% of family coverage to 75% in ‘02.Upped pay 19.5%/3 yrs

Source: Fairview nurses OK pact, ending strike. St Paul Pioneer Press,June 26, 2001;Brochure,MNA nurses are standing up and speaking out for safe patient care

Government-funded System will Resolve the HC Crisis