Allina nurses settlement could embolden hospitals

The recently concluded Allina Health nursing strike could be the start of a change in hospital labor relations nationwide.

Allina took a hard line saying there would be no deal unless the nurses accepted give-backs on health benefits. The nurses' 37-day walkout ended only after the rank and file reluctantly agreed to give up their generous union-only health insurance and transition to Allina's still generous, but less-expensive corporate health plans.

Labor analysts say Allina's victory will shape other nursing contract negotiations.

"It had national implications," said Roger King, a labor attorney at the Washington D.C.-based HR Policy Association.

The group represents many large health care systems that could be more tempted now to adopt Allina's playbook, he said.

For a large, unionized employer like Allina to take a firm stance, King said, "I think probably emboldens other health care organizations around the country to consider the same approach."

Allina hired 1,500 replacement nurses to fill shifts for the almost six-week strike. King said the company gained the upper hand in negotiations by simply carrying on with business as usual.

Still, hospitals won't be looking for walkouts. Hiring replacement nurses is expensive and carries slightly more risk for patients.

But the added risks and costs decrease as a strike wears on and the up-front expenses fade away. So hospitals might be more willing to endure a strike, if there's hope they could substantially pare back their employee health costs over the long-term.

The Minnesota Nurses Association, and by extension it's counterpart National Nurses United, backed an open-ended strike.

That was a strategic blunder, King said, because a lengthy walkout put nurses in a tighter financial bind than Allina.

"If I were advising the union I would certainly want to reconsider the success of that kind of strategy," he said.

That's exactly what the union is doing, according to NNU's collective bargaining director Fernando Losada.

But at the time, an indefinite walkout seemed to be the only way to budge an intransigent employer, he said.

"Would we do it differently? Maybe," said Losada. "We always learn from these experiences. We hope that the employer learned as well."

The lesson Losada wants employers to take away is that nurses are willing to take a prolonged strike.

NNU unions typically walk out for just a few days. Those walkouts tend to inflict a much heavier financial toll on hospitals than nurses. And they can be repeated many times, ballooning costs for employers while minimizing the financial pain for nurses.

The national union signaled that it may reaffirm its preference for spot strikes following Minnesota's walkout. But first, leaders want to take some time to digest what happened and why, said Losada.

However, it's clear the Allina settlement will make it harder for other nurses unions to defend their current health benefits, he added.

"I think it does set a precedent. All these things always set a precedent," said Losada.

NNU has taken forceful stances, which has helped the umbrella group rack up big wins for affiliates in some labor-friendly states.

The union led the campaign to secure nurse-to-patient staffing ratio's in California, the first state to do so. Affiliates in Massachusetts and New York have also seen significant wage and benefit gains for nurses.

Minnesota is another labor-friendly state, but union's goals have been tougher to realize here.

"This is kind of surprising," said economist Joanne Spetz, a professor in the School of Nursing at the University of California, San Francisco. "You don't usually see NNU lose in a union negotiation. They usually come out with at least a good share of what they are looking for."

But Minnesota's labor market may have been a disadvantage, she noted. Nurse negotiators here have to defend better-than-average pay and benefits.

At the same time, there's a surplus of nurses. They provide a reservoir of replacements in a strike.

Whether the labor market was a factor, the union's choice of an open-ended strike could slow NNU's ability to win over nurses in other states, said Spetz.

"They may be feeling like this loss [in Minnesota] isn't great for them, but they are hoping to get big gains in some other states and that might counteract this," she said.

But if Allina's hardline bargaining sets a new standard for employers, nurse union leaders could face defections — and there were hundreds in the Allina strike. Nearly one in every seven nurses had agreed to cross the picket line by the end.