The union representing 12,000 registered nurses in the Twin Cities this week authorized a strike unless it can reach a new contract with 14 metro hospitals by June 1.
In some ways, this labor dispute is like any other labor dispute: wages, benefits, work rules, etc. But take a closer look and you will see the stresses of America’s health care system playing itself out in the Twin Cities.
On the one hand, the United States faces an acute shortage of nurses, especially as the nation’s baby boomers get older. Nursing jobs will grow by 22 percent, or 581,500 jobs, over the next decade, much faster than all occupations, according to the Bureau for Labor Statistics (BLS).
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“Growth will be driven by technological advances in patient care, which permit a greater number of health problems to be treated, and by an increasing emphasis on preventive care,” the BLS report says. “In addition, the number of older people, who are much more likely than younger people to need nursing care, is projected to grow rapidly.
Normally, market forces tells you that when demand outstrips supply, workers hold the advantage. But in the Twin Cities, the hospitals are offering zero, one, and two percent wage increases over three years, far short of three percent annual gains the nurses want.
In an Op-Ed published in the Star Tribune, hospital executives called the nurses wage demands “significant” and unreasonable.
A three percent increase, essentially a cost of living increase, is significant?
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Well, there are two forces at work. First of all, though the BLS says nurses will see a lot of jobs, hospitals will experience the smallest growth out of all healthcare institutions. BLS estimates hospital nursing jobs to grow 17 percent over the next decade, compared to 48 percent for doctor offices, 33 percent for home health services, and 25 percent for nursing homes.
Why? Health care reform experts say the country can lower costs by focusing on preventive care and shortening the length of stay in hospitals. In other words, keep patients out hospitals if you can.
“Employment is expected to grow more slowly in hospitals—healthcare’s largest industry—than in most other healthcare industries,” the BLS report says. “While the intensity of nursing care is likely to increase, requiring more nurses per patient, the number of inpatients (those who remain in the hospital for more than 24 hours) is not likely to grow by much.”
“Patients are being discharged earlier, and more procedures are being done on an outpatient basis, both inside and outside hospitals,” the report says. “Rapid growth is expected in hospital outpatient facilities, such as those providing same-day surgery, rehabilitation, and chemotherapy. More and more sophisticated procedures, once performed only in hospitals, are being performed in physicians’ offices and in outpatient care centers, such as freestanding ambulatory surgical and emergency centers.”
Secondly, hospitals are likely to see lower Medicare payments as the result of the new healthcare reform law. The weak economy has also forced more uninsured patients to seek care in emergency rooms. Lower payments and fewer paying patients means less revenue and profit.
Local hospitals only recently returned to the black. Collectively, net income for hospitals swung to $327 million for the first three quarters of 2009, compared with a loss of $42 million during the same period in 2008, according to the Minnesota Hospital Association, which surveyed 22 metro hospitals.
Metro hospital admissions, after falling in 2008, rose slightly to 278,307 in the first three quarters of 2009, compared with 257,163 for the same period in 2008.
That’s not to say hospitals get a free pass. The BLS report says hospitals still need more nurses because there is such high turnover.
It’s not to hard to see why. Nurses, like primary care doctors, face enormous stress and workloads, mostly because they are so few of them.
Hospitals not only have to compete for patients but also talent. Looking at the BLS report, the nurse’s smartest bet is to pursue higher growth markets like doctors offices and nursing homes, the same way medical school grads eschew primary care in favor of higher paying specialty jobs.
That’s why the Twin Cities reflects such a dysfunctional health care system. There’s a huge demand for nurses but can hospitals afford to hire and keep them?
