After Steward Made Threat to Close the Hospital in Retaliation if Nurses Refused to Accept Management's Contract Offer, RNs at Steward Nashoba Valley Medical Center File Unfair Labor Practice Charges for Bad Faith Bargaining

AYER, Mass., Sept. 9, 2019 /PRNewswire/ -- The registered nurses at Steward Nashoba Valley Medical Center (NVMC) in Ayer, who are represented by the Massachusetts Nurses Association (MNA), have filed  unfair labor practice charges at the U.S. National Labor Relations Board (NLRB) against the Dallas-based for profit health care corporation after it issued a threat to close the hospital unless the nurses stopped attempting to bargain and accept Steward's "final" offer.

The "final offer," with the threat to close the hospital, was delivered via email to the nurses' negotiating team on Aug 26, two days after Steward canceled scheduled talks with the nurses on Monday and Wednesday of last week. The letter concluded with, "If this offer is not acceptable, NVMC will seriously consider the closure of the hospital." 

Under Federal labor law¹, it is illegal for an employer to threaten to close a facility as a threat of retaliation and force against employees exercising their rights to bargain a union contract. Upon receiving the threat, the MNA submitted a request for specific financial information from Steward to substantiate the need to close the facility. Steward refused to provide the majority of the requested data. Steward Healthcare is currently being fined by the State of Mass. for refusing to provide complete audited financial statements to the state, as all other hospitals do. Steward has refused to pay the fines, and the matter is now in the courts.

The nurses point out that on numerous occasions in negotiations over the past several months, they specifically asked management if their consideration of the union's call for staffing improvements and economic enhancements were based on the hospital's inability to afford higher wages. Management repeatedly stated this was not the case, showing that the employer's threat is punitive. The employer specifically confirmed this key fact in a letter to the union on August 29:

"The Medical Center has never claimed an 'inability to pay' in response to the MNA's economic proposals. In fact, you specifically acknowledged at the bargaining table that the Medical Center has not made such a claim… ²

"Steward's threat to close the hospital is an attempt to bully the nurses into an agreement that will continue to prevent us from being able to recruit or prevent continued resignations that are making it harder to provide the level of care our patients and this community need," said Fran Karaska, co-chair of the MNA bargaining unit at NVMC. "They continue to place their corporate interests above their commitment to our staff and our patients."

The MNA began asking hospital executives to begin bargaining in July 2018. Steward did not agree to a first bargaining session until the second week of December, just two weeks before the contract expired. The executives refused to give a first wage proposal until mid-April 2019, four and a half months after the contract expired. At the nurses request a federal mediator has been attempting to aid the parties. Throughout these sessions, the nurses have been committed to improving nurse staffing levels and benefitting nurse recruitment and retention.

Steward Threatens Closure While Spending Hundreds of Millions on Expansion

Steward's threat to close NVMC and its refusal to share their financials was made as they pursue plans for a $100 million expansion at Steward St. Elizabeth's Medical Center in Brighton. 

Says MNA St. Elizabeth Medical Center union co-chair Chris Kenney, RN:  "Nurses at St. Elizabeth's all know the executives haven't been staffing the hospital to properly care for the number of patients we have today. There isn't evidence that they will be willing or able to properly staff for an expanded number of patients each day. Why in the world would we do anything but oppose this plan?"

Says MNA St. Elizabeth's co-chair Kirsten Ransom, RN: "Steward's model was to 'provide quality health care in your community.' Providing world class care close to where patients live. This approach has changed as patients are regularly transferred to SEMC for services currently not provided in other Steward community hospitals. With the threat of closing NVMC patients may now have to travel hours in traffic to receive basic care needs within their health care network. This is not the model steward has promoted and the delayed time in receiving patient care could lead to poor patient outcomes."

Last year, Steward shut down the maternity services at Taunton's Morton Hospital and in 2013 the company shut down Morton's inpatient pediatrics unit. In 2015 Steward shuttered Quincy Medical Center, making that one of the largest cities in Massachusetts without a hospital. In all those cases the Mass. Department of Public Health (DPH) had issued formal findings that these were essential services that should not be shut down. Steward subsequently shut down the hospital (with the exception of its emergency department). Last year Steward shut down Northside Hospital in the working-class city of Youngstown, Ohio about a year after purchasing it.

For-profit Steward Healthcare is owned by the giant hedge fund, Cerberus Capital Management:

• In September 2016 Steward/Cerberus sold the physical properties of its nine Mass. hospitals for $1.25 billion to Medical Properties Trust (MPT), a real estate investment trustⁱ.
• In September 2017 Steward/Cerberus sold the properties of 10 out of state hospitals to MPT for $1.4 billion.ⁱⁱ
• The public has seen no evidence that any of those profits were distributed to any of the company's hospitals' budgets.
• In the past two years, Steward/Cerberus bought 26 hospitals in the U.S.ⁱⁱⁱ and three in Malta^iv.
• Massachusetts is suing Steward for refusing to provide their audited financial statements.^v
• At the top of the company is Cerberus' CEO Stephen Feinberg, whose personal net worth is a reported $1.6 billion^vi.

A recent MNA analysis that compared the wages of Nashoba RNs to those of RNs at 22 competing hospitals showed NVMC RN wage scales are 18.5% percent less than the average of 22 of their local counterparts at the top of the scales. Over 25 years, a Nashoba RN would lose out on nearly $350,000 in wages alone (at their present value before accounting for future inflation), compared to working at the average of the area hospitals. The executives' "final offer" would leave the NVMC nurses the lowest paid nurses in the region, and the hospital will not be able to stem the tide of resignations or be able to adequately recruit new nurses.

"Our hospital has an excellent reputation in the community, and it is staffed with great, dedicated caregivers," said Karaska. "But the hospital's inability to recruit and retain RNs will harm both the hospital and community in the long term."

Related Statistics on NVMC's Nurse Staffing Levels; Turnover Rates and Impact on Patient Care

• In 2018, 12 percent of the time (84 shifts out of 730) the Intensive Care Unit (ICU) was staffed with only one RN. In the first three months of 2019, 35 percent of the time (52 shifts out of 148) there was only one RN in the ICU for a whole shift.
• Apart from two nurses, the RN staff in the geriatric psychiatric unit has turned over entirely three times in the past three years.
• Schedules, which are posted three weeks in advance, almost always have "holes," meaning that management cannot say what RNs will be assigned to what shifts because there are not enough RNs on staff., Example: When the seven week Emergency Department schedule was posted July 1, of the 363 ER RN shifts for July 11, 2019 through August 31, 2019, 100 did not have an RN assigned![vii]
• Patients are frequently transferred from the ER to other hospitals because there is not enough staff to care for them. ICU patients are routinely transferred from NVMC to other hospitals due to a lack of appropriate RN staffing.
• ICU beds have been closed due to the absence of ICU RNs. In response, the hospital depends on stopgaps: boarding ICU patients in the ER and transferring ICU patients to non-ICU floors where the nursing care is not specialized. During some shifts, management has closed the ICU entirely due to a lack of RN staff.

New Federal Funding for Nashoba: Where Did it Go?

Adding insult to injury, Steward NVMC recently successfully applied with the Centers for Medicare & Medicaid Services (CMS) to have its reimbursement-rate designation changed from "Central Massachusetts" to "Boston." Steward's rationale for this request was that its costs are like those of Boston hospitals, including labor costs. Since receiving this reclassification in 2018, RNs have not seen an increase in compensation, nor has its rate of new nurse-hires flourished. Steward executives have responded that some other Central Mass. hospitals similarly won this reclassification. True. But those other hospitals for which the MNA has information have raised staff wages, using the new federal funding for its intended purpose. Steward NVMC has not.

"Whatever financial benefit the executives of this for-profit hospital have seen from reclassification, it has not trickled down to the people providing the care and it has not resulted in an increase in hiring," said Karaska. "We continue to lose staff to other hospitals, including Boston, Lawrence, and Worcester, hospitals where wages are 8  to 25 percent higher."

As the NLRB evaluates the charges against Steward, the nurses will continue efforts to educate the public about the situation and its impact on the quality and safety of patient care and the future of the hospital.  The nurses have received strong support from local policymakers and community leaders.  In July, a delegation of community members led by State Senator Jamie Eldridge visited the hospital to register their support for the nurses in this negotiation. 

U.S. Representative Lori Trahan also offered her support for the nurses on Monday, stating, "I stand with the hardworking nurses who make up the MNA. The right of workers to organize and bargain in good faith negotiations - free of coercion - has long been enshrined in our laws. No workers deserve these rights more than nurses. They are our everyday heroes who care for us in our hour of need and get us on the road to recovery. After months and months of negotiations, it's time for the heel-dragging to end and for  NVMC and MNA to sign a fair deal."

Says MNA co-chair at NVMC Audra Sprague, RN, "In threatening closure unless we accept its bargaining demands, Steward is also threatening the health and safety of the communities this hospital serves. This is our hospital and our community and we intend to do whatever is necessary to engage this community to ensure access to the care they need."

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Founded in 1903, the Massachusetts Nurses Association is the largest union of registered nurses in the Commonwealth of Massachusetts. Its 23,000 members advance the nursing profession by fostering high standards of nursing practice, promoting the economic and general welfare of nurses in the workplace, projecting a positive and realistic view of nursing, and by lobbying the Legislature and regulatory agencies on health care issues affecting nurses and the public.

¹ Including Sections 8(A)(5) and  8(C) of the National Labor Relations Act
² Steward's attorney's letter of 8/29/2019 continues emphasizing that their threat of closure is punitive rather than based on a legally defensible claim of inability to pay: (Where he uses the term 'The Medical Center,' he refers to the company's executives):  "Further, your assertion that the Medical Center has contended that it 'cannot provide any further economic enhancements without causing [its] closure' is  entirely  false. The Medical Center has never drawn the linkage upon which you rely. The Medical Center has every right to consider the closure of its operation rather than continuing to engage in fruitless collective bargaining negotiations and incurring the costs associated therewith." 

ⁱ "Steward Healthcare Announced National Plan, $1.25 billion Investment," Boston Business Journal, 9/26/2016, and http://www.medicalpropertiestrust.com/stories.asp?id=1544129
ⁱⁱ https://www.businesswire.com/news/home/20170929005650/en/Medical-Properties-Trust-Completes-1.4-Billion-Investment and http://www.medicalpropertiestrust.com/stories.asp?id=1549048
ⁱⁱⁱ https://www.steward.org/network/our-hospitals
^iv https://timesofmalta.com/articles/view/steward-hospital-in-us-sold-to-real-estate-developer.670448
^v "Steward Health Care fined for second year in a row for failing to submit financials." Modern Healthcare, https://www.modernhealthcare.com/article/20160516/NEWS/160519915/steward-health-care-fined-for-second-year-in-a-row-for-failing-to-submit-financials
and
https://www.bostonglobe.com/business/2016/05/15/steward-again-withholds-financial-data-from-mass/tmFOsE1WAG83yc4M4rj1lN/story.html
^vi Forbes. https://www.forbes.com/profile/stephen-feinberg/#18bf0db9736e
and
New York Magazine: http://nymag.com/intelligencer/2016/11/a-billionaires-dreams-of-creating-a-guns-empire.html?gtm=bottom
^vii As of 7/1/2019

SOURCE Massachusetts Nurses Association

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