Hospital sale in doubt as labor dispute flares

NORTH SMITHFIELD and ST. LOUIS – Union health care workers at the Rehabilitation Hospital of Rhode Island have authorized a possible strike, citing what they contend is bad-faith bargaining by the hospital and its prospective buyer, RehabCare Group Inc. (NYSE: RHB).
The $1.8 million deal – announced by RehabCare and hospital owner Landmark Health Systems Inc. on Sept. 4, 2007 (READ MORE) – calls for the hospital to be jointly owned and operated by Landmark and the RehabCare Group: The parties have said that RehabCare would become majority owner of a new entity, RHRI LLC, that would provide management services for the hospital. The company then would contract with Landmark for clinical, ancillary and support services. Hospital staff would be employed by the joint venture.
But United Nurses & Allied Professionals (UNAP), which represents nearly 60 nurses, therapists and other employees of the North Smithfield hospital, has filed an unfair labor practices charge that cites the transaction’s potential impact on its members.
UNAP contends that the hospital has been “insisting that employees accept a substantially inferior health plan that is provided to RehabCare employees in other parts of the country.” In a meeting this morning, it added, union members “overwhelmingly” voted to authorize their negotiating committee to call a strike if the parties are unable to resolve the dispute.
“RehabCare is insisting on benefit cuts that would cost our members hundreds – and in some cases, thousands – of dollars per year,” said UNAP president Jan Peso, who is also a registered nurse.
The company, meanwhile, has threatened to withdraw its bid for the hospital if those benefit changes are not imposed, the union said. “The heavy-handed tactics … make clear that this is not the type of company that should be allowed to run a hospital in Rhode Island,” Peso said.
Landmark Health Systems did not immediately respond to the Providence Business News’ request for comment on the labor dispute.
But the employee-benefits conflict is not the only possible stumbling block to the Rehab Hospital sale: Its acquisition by RehabCare is the first planned health care “conversion” – from public to private – to be reviewed under the state procedures developed in anticipation of the planned merger of nonprofit health care networks Lifespan and Care New England. (READ MORE)
But that process is moving slowly: RehabCare’s application, submitted to state officials in March, was not formally accepted for review until last week. The company has threatened to withdraw its bid if the R.I. Attorney General’s Office and R.I. Department in Health do not approve the sale by Dec. 31, UNAP officials said.
Meanwhile, RehabCare last night announced the promotion of James F. Martin – the company’s vice president of human resources since 2005 and a 35-year veteran of employee relations and labor management – to senior vice president and chief human relations officer.
Martin will lead RehabCare’s human resources, compensation and benefits, corporate office administration and campus recruiting efforts, the company said. “I’m confident in Jim’s ability to continue to develop an employee-oriented company culture that’s focused on high performance, continuous improvement, and striking the right balance between employee and company needs,” added President and CEO John H. Short.
For more information about Landmark Health Systems Inc. – parent of the Landmark Medical Center in Woonsocket and the Rehabilitation Hospital of Rhode Island, formerly the Eleanor Slater Rehabilitation Hospital, in North Smithfield – visit www.LandmarkMedical.org. To learn more about St. Louis-based RehabCare Group Inc. (NYSE: RHB) – a provider of physical rehabilitation services, in conjunction with nearly 1,300 hospitals and nursing facilities nationwide, and the owner or operator of 10 freestanding rehabilitation hospitals – go to www.RehabCare.com.
The United Nurses & Allied Professionals, based in Providence, is a labor union representing more than 5,000 nurses, respiratory therapists, radiologic technologists and other health care professionals at hospitals and other institutions across Rhode Island. Additional information is available at www.UNAP.org.