Hospitals Seek to Shift More Costs onto Nurses

Approximately 17,000 NYSNA members at twelve hospitals in New York City had contracts expiring on Dec. 31, 2022. Of that number, 15,000 nurses sent 10-day strike notices, with Montifiore and Mount Sinai going on strike before ultimately reaching an agreement with historic gains. There was a lot of dialogue over the past few weeks, and I want to ensure that we are all clear about what is happening and why.

First, negotiations occurred in the context of an intense staffing crisis that had nothing to do with a lack of nurses. The staffing crisis is the result of a mass exodus of nurses from hospitals and nursing homes because they are fed up with understaffing caused by hospital management, poor working conditions, inadequate pay, and the stress of trying to provide safe care for patients while management ignores nurses’ concerns.

Profits Over Patients

Next, hospital systems are committed to profits over patients. Their efforts to shift the burden of rising health insurance costs to their registered nurse staff was about returning more profits to themselves not patient care. In negotiations, employers are claiming to have limited resources amid higher health insurance costs. No one should believe that hospitals simply cannot do better, because they can absolutely do better.

Large hospitals are raking in significant dollars. Presbyterian made more than $1 billion in profits in 2021 and is sitting on more than $19 billion in assets. Mount Sinai made more than $185 million in profits and has more than $6 billion in assets. Northwell made more than $177 million in profits (plus $460 million in investment income) and also has a hoard of more than $19 billion in assets.

On a Spending Spree

At the same time hospitals are seeking to shift the burden of rising health insurance costs onto nurses, they are on a spending spree with executive pay packages. The CEOs and executives of the big hospital networks are giving themselves big raises and handing out executive bonuses like Halloween candy:

• The CEO of Presbyterian made more than $12 million in 2019.
• The CEO of Mount Sinai made $5.6 million in 2019.
• The CEO of Northwell made almost $4 million in 2019.
• In 2020, 364 top executives at New York hospitals received more than $73 million in bonuses.
• Ten executives received more than $1 million in bonuses, and another 40 got at least $500,000.

As if this isn’t astounding, these hospitals have hundreds of executives who receive $1 million or more in compensation each year — at Presbyterian, for example, at least 29 executives earned $1 million or more in 2019. By way of comparison, the CEO of the 11 hospital Health + Hospitals public network received about $700,000 in pay. No one should be confused. Hospitals are responsible for rising health insurance costs. And at any point they can make a different decision.

Healthcare Costs Are Growing

Unfortunately, health insurance costs have been growing at a rate that far outpaces inflation and the pay of nurses and other workers. In the last 12 months, the inflation rate in New York City was about 6% (lower than national average), but healthcare costs rose by 7.9%. Hospital price increases are the major drivers of increasing health care costs. Since 2009, hospital prices have gone up by 80%, compared to less than 50% for nonhospital care and 30% for prescriptions.

Much of the increase in hospital costs is the result of price gouging and profit maximizing by these same hospital CEOs that pay themselves so well. These private hospitals charge exorbitant prices that are on average 316% of the rates paid by Medicare and for some hospital systems reach more than 390% of the Medicare rate, according to an analysis by the SEIU 32BJ member health plan.

As a result, healthcare funds across the country are facing cash flow issues. In 2022, expenses exceeded contributions leading to an average monthly shortfall of $2.6 million.

After nurses put our lives on the line during the worst healthcare crisis of our lifetime, some of our hospital employers had the audacity to consider cutting healthcare for COVID nurse heroes. They proposed 35 different reductions and restrictions to our NYSNA health insurance and were refusing to set their contribution rate to our healthcare fund, which they do every fall. Days before contracts expired, the hospital trustees finally agreed to increase the rate to continue funding nurses’ good health benefits. This is a step in the right direction toward respecting nurses' work and protecting our health.

Price Gouging

There are plenty of examples and data showing the degree of price gouging — for example, a normal vaginal birth at NYC Health & Hospitals cost $11,000, while the same procedure costs $41,000 at Montefiore, $33,000 at Presbyterian and $24,000 at Northwell. It is beyond ironic to hear these hospitals say they can’t afford healthcare coverage for nurses and healthcare professionals when they are making huge profits and complaining about the same healthcare costs that they themselves have jacked up.

Again, we shouldn’t be confused. We also know what needs to happen. Hospitals must keep their hands off nurses’ health coverage — nursing is one of the most dangerous occupations, and nurses need good health coverage if we are going to attract and retain our nurses. But health systems should also fully absorb the cost of health coverage and value their teams the same way they value their executives. If there is any talk about reducing healthcare coverage, it should be solely to lower the amount that health systems are charging health care professionals and patients.