Minnesota nurses attack hospital executive pay amid union negotiations

By: - June 1, 2022 7:41 am

Nurses picketed outside Abbott Northwestern Hospital and 10 other Twin Cities hospitals on Jun. 1, 2022, as they negotiate new three-year contracts. Photo by Max Nesterak/Minnesota Reformer.

The Minnesota Nurses Association has come out swinging against hospital executives as they negotiate new union contracts for some 15,000 nurses at 15 hospitals in the Twin Cities and Duluth.

Union nurses began picketing 11 Twin Cities hospitals on Wednesday — a day after their contracts expired — and launched a public ad campaign blaming executive “greed” for rising health care costs, high staff turnover and a chronic nursing shortage.

“Minnesota is facing a health care crisis of unprecedented proportions. And it’s not COVID. It’s greed,” says a male voice ominously on one of the commercials released by the Minnesota Nurses Association.

The campaign also includes a website, “Minnesota Patients Before Profits,” to draw attention to high executive pay and cost-cutting measures at some of the state’s largest health care systems.

The attack at the beginning of negotiations is an unusually confrontational strategy — even for one of the state’s most active unions. Nurses are trying to drive public support for significant wage gains and staffing increases after two years on the frontlines of the COVID-19 pandemic followed by the highest inflation in decades.

“This campaign is very different from previous ones,” said Angela Becchetti, a nurse at Allina’s Abbott Northwestern Hospital in Minneapolis and a member of the union’s bargaining committee. “Enough is enough.”

The union accuses the hospital systems of operating like profit-seeking corporations, even though all seven are non-profits — Allina, M Health Fairview, HealthPartners, Children’s Minnesota, North Memorial Health, St. Luke’s Duluth and Essentia Duluth.

Paul Omodt, a spokesman hired by M Health Fairview, HealthPartners, North Memorial Health and Children’s Minnesota, said the hospitals have been negotiating in good faith but that the nurses’ proposals are unrealistic.

“The union’s current demand of a 39% increase for wages and other increases simply are not realistic nor in the best interest of our community. This is not financially viable for our community members and healthcare systems recovering from a pandemic – many of which are operating with negative margins through the first quarter of 2022,” Omodt wrote in a statement.

A spokesman for Allina said they offered the highest wage proposal in 15 years. “We hope to be able to find common ground around contract changes that address attracting and retaining the next generation of talented nurses,” the spokesman said.

Bechhetti says the offer was for an 8% pay increase spread out over the next three years. She said while it may be the best offer in 15 years, it doesn’t account for inflation outpacing their wage increases over that time.

“Some years we’ve had zero percent (increases),” Bechhetti said. “So we’re actually down overall.”

Meanwhile, hospital executives have often seen major increases in their compensation, even just year to year, according to tax filings.

At M Health Fairview, CEO James Hereford received $3.55 million in total compensation in 2019, a 90% increase from 2018. That’s 40 times more than the $84,000 salary earned by the average Twin Cities registered nurse in 2019. In addition to Hereford, eight other employees received more than $1 million in compensation that year.

At Children’s Minnesota, CEO Marc Gorelick received $1.49 million in total compensation in 2020, a 2% increase from 2019. That’s on top of a 47% increase in compensation he received from 2018 to 2019. Two other employees received more than $1 million in compensation.

At Essentia Health, CEO David Herman received $2.7 million in total compensation in 2020, a 61% increase from 2019. One other executive received more than $1 million in compensation.

At Allina Health, former CEO Penny Wheeler saw a slight decrease in her compensation in 2019 from 2018 but still received $2.67 million, more than 30 times the average salary of a Twin Cities nurse. Thirteen other employees received more than $1 million in total compensation that year, a group that includes executives and physicians. Wheeler retired in 2021.

Union nurses say high executive pay is just one of the ways their non-profit employers act more like corporations. They also point to an estimate by National Nurses United — a national nurses union — that U.S. hospitals charge patients more than four times their costs.

And they point to business practices like “just-in-time staffing” in which nurses will have their shifts cut with as little as four hours notice based on anticipated demand for health care. In theory, the practice is supposed to reduce unnecessary costs, but in practice it results in understaffed shifts leading to burnout and worse patient care, nurses say.

Bechhetti said some nurses on understaffed shifts are forced to make difficult decisions, like whether to attend to the patient needing medicine or the patient who’s soiled themself and needs to be cleaned up.

“That’s not safe for our patients,” Bechhetti said. “I think that’s why you’re seeing so many nurses leave the bedside because they’re burnt out. They’re tired of not providing the highest quality care.”

The nurses’ union has been a vocal critic of hospital executives through the pandemic, alleging their mismanagement, rather than the pandemic, is at the root of the statewide nurse shortage.

The Minnesota Nurses Association, which represents some 22,000 registered nurses across the Upper Midwest, surveyed 748 nurses who left the job over the past two years. The most common reason cited among those surveyed was “management issues,” followed by short staffing and then the COVID-19 pandemic.

More than 80% of those nurses surveyed said they would not return to work in hospitals unless conditions improved.

The nurses’ muscular opening gambit is based in part on polling conducted for the union that finds widespread distaste for hospital executives.

More than half of Minnesota voters polled say they have an unfavorable view of hospital executives and CEOs, while just 11% said they viewed hospital executives favorably. By contrast, 84% of those polled said they viewed nurses favorably.

Eighty-five percent of those surveyed said hospital executives make too much, while 62% believe nurses make too little.

The nurses’ current campaign comes on the heels of their push at the state Capitol to pass a law setting minimum staffing ratios on each unit at hospitals, a holy grail for health care workers — and a non-starter for hospital administrators.

The “Keeping Nurses at the Bedside Act” (SF 3027) would require hospitals to implement a staffing plan approved by a committee made up of nurses and managers. The bill, which failed to make it out of committee in the Republican-controlled Senate, also would have created a loan forgiveness program for hospital nurses and paid for the Minnesota Department of Health to develop violence prevention strategies to protect nurses.

The nurses are hoping to win some of those items through their contract negotiations with hospitals in addition to wage increases that keep pace with inflation. And, they appear ready to strike over their demands, possibly replaying a drawn out fight from just six years ago. In 2016, the nurses at Allina went on strike for 37 days, just a day shy of the state’s longest nursing strike in 1984.

“No employer has wanted to discuss staffing. But obviously with the past few years (and) a pandemic, it’s time to talk,” Bechhetti said.

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Max Nesterak
Max Nesterak

Max Nesterak is the deputy editor of the Reformer and reports on labor and housing. Previously, he was an associate producer for Minnesota Public Radio after a stint at NPR. He also co-founded the Behavioral Scientist and was a Fulbright Scholar to Berlin, Germany.