Pay, benefits at heart of St. Charles negotiations

Nurses at St. Charles Medical Center Bend have been working on an expired contract for seven months. Local nurses and St. Charles executives are currently in federal mediation with the next two sessions scheduled for January 10 and 11.

The almost 900 nurses at St. Charles Bend are represented by the Oregon Nurses Association. Nurses at the other three St. Charles hospitals each have their own bargaining unit and contract and are not part of this negotiation.

The discussions between St. Charles Bend leadership and the nurses has been long and contentious. The two sides have met 24 times to negotiate a new contract since June 2018. According to Iman Simmons, St. Charles Health Systems chief operating officer, "At this point, the negotiation is down to essentially two things - wages and benefits."

According to a guest column from the January 3, 2019 Bulletin newspaper by nurses who are leaders on the ONA's contract negotiation team, "We disagree with Simmons and St. Charles executives on many basic facts - from St. Charles' fuzzy financial math to what contract negotiations are about - and we think we understand why. St. Charles executives don't have a problem talking, they have a problem listening."

The nurses contend they have been speaking up about staffing and safety issues at St. Charles Bend for years.

"Since 2015, Bend nurses have reported more than 600 unsafe or inadequate staffing incidents at St. Charles Bend, but we haven't seen significant action from St. Charles executives," the column said. It went on, "In 2017, the Oregon Health Authority conducted an independent investigation of staffing at St. Charles Bend. The state found hundreds of violations of Oregon's Hospital Nurse Staffing Law and ordered St. Charles to comply with the law. A year and a half later, hospital executives haven't fixed the problems," the guest column said.

According to the nurses, in 2018, St. Charles was asked by LeapFrog, a prominent hospital safety organization, if it had enough qualified nurses in the hospital. St. Charles administrators "declined to report" any staffing information.

St. Charles' Simmons, in a guest editorial in the December 21, 2018 Bulletin stated, "You can depend on us for safe, reliable care."Economics

From an economic point of view, the figures coming from both sides paint very different pictures.

According to Simmons, "St. Charles is looking to end 2018 with about a 3 percent operating margin. As a nonprofit organization, that means that out of every $1 we collect for the care we provide we can re-invest three cents into the organization.

"That money goes to provide raises and education opportunities for our 4,300 caregivers. It is reinvested into the system for necessary renovations and equipment upgrades. In the near future we plan to upgrade the old intensive care unit space in Bend to a much-needed observation unit. We are getting ready to bring comprehensive cancer services including radiation oncology to Redmond and are in the process of expanding family care and immediate care access in Prineville. All of these investments lead to a better place to work, provide, and receive care."

According to figures reported by St. Charles to the State of Oregon and the federal government, in 2017, St. Charles reported a net income of $70 million, giving them the seventh-highest net income out of 60 hospitals in Oregon.

The total margin (measure of overall profitability) reported in 2017 was 10.6 percent, putting St. Charles in the top 30 percent of hospitals in Oregon. Their gross patient revenue of $1,268,241,236 ranked them the eighth highest out of 60 hospitals in the state.

Wages and Salaries

Executive salaries at St. Charles in 2016 for eight top hospital executives totaled $8,363,831, with president Joe Sluka receiving $834,019 in salary and other benefits. According to the Portland Business Journal of October 20, 2017, in 2015, former president and CEO James Diegel received $996,793.

The Governance Institute is a membership organization that provides research and other education for nonprofit hospitals and health systems. In a survey conducted by the Institute, of board member pay, nationally only 9 percent of nonprofit health systems pay their board members. Among those that do, most pay less than $5,000 per year.

In 2016, St. Charles' 12 directors made a combined $293,000, according to an article in The Bulletin. The base stipend adopted in 2015 is $20,000 a year. The board chair receives an additional $10,000 a year and committee chairs receive an extra $5,000 per committee.

Directors have been paid since 2011 when the goal was to attract more physicians to the board and get them to remain on the board. At that time, not all directors accepted the compensation. In 2013, the board voted to make all directors accept compensation. In 2015, the base of $20,000 was established.

In October 2017, directors agreed to take 10 percent cuts to their stipends continuing into 2018. During the same time period they announced cutting 30 jobs and temporarily lowering pay for salaried workers by 5 percent and for salaried executives by 10 percent.

Only about two percent of nonprofit health systems pay their directors $20,000 or more according to Governance's survey. No respondents said they pay $30,000 or more.

In 2001, St. Charles had one hospital in Bend. Now there are three more in Redmond, Madras, and Prineville. The role of the board has changed and more time is required of the directors. It is also necessary to have the right mix of expertise on the board to manage more complex issues.

Nurses' salaries are a combination of step pay, which is based on their level of education and number of years as a nurse, and cost-of-living adjustments. The steps don't necessarily increase every year worked; some steps cover a number of years. For example, in 2018 an entry level nurse with an AA degree from COCC would receive $35.77 per hour. A brand-new masters-level nurse would receive $37.57 an hour. Those figures in 2018 reflected a 1.75 percent increase over the previous year.

For two nurses with the same levels of education as the first example, and with 25 years or more of experience, their base pay would be $55.26 and $58.03 an hour respectively. The percentage of increase in step pay is determined by the contract negotiated between management and the nurses' union, ONA, which represents nearly 15,000 nurses across the state.

The Western Consumers Price Index (WCPI), which the nurses are using as the basis for their cost-of-living adjustment, is 3.8 percent and more accurately reflects the real cost of living in Bend as opposed to the Bureau of Labor and Statistics CPI, which reflects only the rise in the cost of goods and services nationwide.

The union bargaining team is saying that any wage increase that is less than a cost-of-living adjustment (COLA), amounts to a pay cut for the nurses. They want 3.8 to meet the cost of living in Bend and to maintain age-targeted retirement planning.

Lisa Goodman, public information officer for St. Charles, told The Nugget, "At this point in the negotiation process, St. Charles has offered a two-percent wage increase in 2019, one-percent in 2020 and one-percent in 2021. This is in addition to the 1.6 percent average step increases many nurses receive annually. We are proud that St. Charles Bend nurses are some of the highest paid in the nation, making an average base hourly wage of $47.79. For a full-time person working 80 hours per pay period, that equates to $99,000 a year and does not include shift differentials, overtime, or premium pay."

Benefits

According to COO Simmons, St. Charles is proposing that nurses pay five percent more of their health insurance premiums starting in January 2019, which is the same increase all other non-contract St. Charles caregivers took in January 2018. Depending on the plan selected, the increase equates to an additional $20 to $60 per pay period withheld ($40 to $120 a month) for full-time-equivalent

aemployees.

The nurses contend that the problem with the health plan offered amounts to more than just the five percent increase in their contribution. It includes a higher deductible and fewer in-network services. For example, if a nurse's child needs special pediatric care not available in Bend, the entire cost of care out-of-network would be the employee's responsibility.

The ONA negotiating team contends that St. Charles is proposing to raise healthcare premiums by 30-100 percent depending on hours worked and plan chosen. According to data collected by ONA from 2019 employers' benefits selection handbooks on premiums paid by nurses at St. Charles, Providence, Kaiser, Legacy, and OHSU, St. Charles is by far the most expensive for employee coverage as well as spouse, children, and families. The five percent increase would make St. Charles even higher. Several of the other hospitals cover the employee's premium 100 percent.

Specifics about actual deductibles, out-of-pocket maximums, percentage paid post deductible, and co-pays were found to exceed St. Charles in both quality and accessibility.

St. Charles is a self-insured group health plan (or a self-funded plan), in which the hospital assumes the financial risk for providing health care benefits to its employees. In other words, they don't pay premiums to an insurance company that then pays for health care for the employee.

Now What

The St. Charles Bend ONA bargaining unit took a vote of the union membership regarding conducting informational picketing at the hospital. Ninety-nine percent of nurses voted in favor, with 837 yes votes and 11 no. A union representative said, "This might be the largest turnout we've ever seen, with approximately 97 percent of the bargaining unit participating."

Kevin Meely, communications director for ONA, said, "An informational picket is NOT a strike or work stoppage. It's a peaceful public rally that gives community members the opportunity to meet with nurses to talk about their healthcare concerns and show their support for their local nurses. During an info picket, nurses continue to work their regular shifts and participate in the info picket during their personal time."

The nurses will be explaining their stance on safe staffing, affordable health care, fair wages, the grievance process, and unit practice committees.