PROVIDENCE – Union health care workers at Lifespan’s Rhode Island Hospital voted 876 to 14 against the pay freeze and other givebacks requested by hospital officials.
“That’s a very high turnout for us, especially in mid-contract,” Rick Brooks, director of the United Nurses & Allied Professionals, told Providence Business News in a telephone interview today.
Lifespan had announced on March 18 – in memo to employees that was obtained by PBN (READ MORE) – that the nonprofit health care system was freezing pay, trimming education and training benefits and making other cuts, including layoffs in some departments. “While a number of our employees are covered by collective-bargaining-unit agreements, we have been and will continue to discuss these changes with the unions and hope those employees will agree to the changes that are affecting their fellow employees,” the memo said.
But the nonprofit health care network failed to persuade either the 2,100-some members of UNAP’s Rhode Island Hospital local – who are looking forward to a 4 percent pay raise on July 1 – or the union’s executive board.
“We did very thorough analysis … the balancing, on the one hand, the needs of our members and the expectations of our members; and on the other hand, what we believe to be the needs of Lifespan,” Brooks said. The board concluded that “there was just not sufficient justification to renegotiate a contract that we just renegotiated, at their request.”
The current contract, which runs through 2011, was negotiated two years ago, Brooks noted. At the time, the UNAP local’s old contract still had another year to run – “but we agreed, at Lifespan’s request, to begin a year early,” he said. The union also agreed to extend the term of its contract to four years, rather than the customary three, to give the hospital more financial stability and ease long-term planning. And in the new contract, the workers agreed “to increase our share of the health insurance costs,” Brooks added.
That left the Rhode Island Hospital workers in no mood to accept more concessions, the UNAP director said. Moreover, “while we recognize that there is an economic downturn, and many companies will be seeking concessions, Lifespan hospitals have been for many years the most profitable hospitals in Rhode Island.”
Lifespan has said its “Performance Improvement Plan” is needed because of “financial shortfalls resulting from declining Medicare [and] Medicaid reimbursements, increased numbers of un[insured] or underinsured patients; reduced volume as patients delay or cancel elective procedures; decreased average length of stay; and reduced earnings from investments.”
The union rejected those arguments, however.
“Of course they are experiencing a downturn, like everybody is,” Brooks told PBN, “But as recently as the last fiscal year, they actually made a profit – and based on their profit, awarded bonuses to executives.”
In its annual report for the year ended Sept. 30, 2007, Lifespan posted a net gain of $102.22 million, an increase of 65.62 percent from the year-ago $61.27 million, on total operating revenue that rose 4.13 percent to $1.41 billion. (READ MORE) Annual research funding and net patient revenue at Rhode Island Hospital and its Hasbro Children’s Hospital division rose 4.68 percent to $854.64 million in fiscal 2007, the November report showed.
Last week, however, Lifespan painted a very different picture of FY 2009, which began in October. By the end of last month, the hospital network said, it was facing a shortfall of about $12 million.
The hospital network already has eliminated the merit raises that Lifespan President and CEO George A. Vecchione and other senior executives would have received starting Jan. 1, cut their base pay by 2 to 10 percent and imposed permanent cuts in benefits. Those cuts – like the givebacks Lifespan had hoped to win from UNAP and other unions – are part of the austerity plan the network hopes will achieve savings of $50 million this fiscal year.
“This is a company that is very, very strong,” Brooks said, citing the credit score recently awarded by Standard & Poors. (Both S&P and the rival Moody’s Investors Service have confirmed their rating of Lifespan’s debt at “A3”: a strong score, but several notches down from the top “AAA.” Given the current climate, “we were just pleased to maintain that,” a Lifespan spokeswoman told PBN this afternoon.)
Still, the UNAP director added, should the situation change, “we will, of course, reconsider.”
The United Nurses & Allied Professionals represents nurses, respiratory therapists, radiologic technologists and other health care professionals at hospitals and other institutions across New England. With more than 5,000 members across Rhode Island, it is the state’s largest health care union. Additional information is available at www.unap.org.
Rhode Island Hospital – a private nonprofit institution founded in 1863 – includes the state trauma center and the Hasbro Children’s Hospital. It is a founding member of the nonprofit Lifespan health care system, which also includes The Miriam, Bradley and Newport hospitals. For additional information, go to www.lifespan.org or www.RhodeIslandHospital.org .
