Case Study: Allina Health – 5 Hospitals
Preparing for a strike is a massive undertaking for any healthcare institution, but particularly one as large as Allina Health. Serving communities throughout Minnesota and Western Wisconsin, the more than 27,000 employees of this Minneapolis-based health system staff 1,775 beds and admitted more than 109,000 for inpatient care and an additional 1.5 million for outpatient care in 2016.
With revenue of $3.9 billion in 2016, the not-for-profit’s operating income was trending $30 million below 2015 due to softer patient volume at its hospitals and significant investments in patient services. Its operating margin was 3.9% in 2015, and was in danger of falling below 3% in 2016 if additional savings couldn’t be found. Like many other hospitals, reducing employee benefit costs is one of the largest opportunities for savings.
The Minnesota Nurses Association represents the 4,800 members of the nursing staff at five Allina Hospitals – Abbott Northwestern Hospital, the Phillips Eye Institute, United Hospital, Mercy Hospital, and Unity Hospital – in the Twin Cities area. When presented with a new contract that phased out low-deductible health plans that Allina believed would be subject to a new federal “Cadillac” tax in 2020, the union initially went on strike for 7 days in June 2016.
During the weeklong June strike, Huffmaster had contracted to provide 220 nurses, while two other competitors were contracted to provide approximately 700 nurses each. One major “US” competitor did not provide nursing staff at all due to a previous negative engagement with Allina. One of the two companies that had contracted for 700 nurses each came up dramatically short of their commitment. This “Global” competitor was not invited back to provide nursing staff during a subsequent strike later in the Fall of 2016.
Negotiations with the union continued throughout the summer without resolution. Based on its excellent performance in meeting its commitments in June, Allina significantly expanded Huffmaster’s staffing order to 740 RN’s when the nurses walked out again on Labor Day 2016. This time, it was an open-ended strike, with no firm date for the nursing staff to return to work. Huffmaster deployed its In-Processing personnel on August 29 to begin the monumental task of completing all licensing and certification requirements for the replacement nurses, and on August 30 started utilizing its transportation team to pick up RNs at the airport (99% of the nurses came from outside Minnesota) and transport them for paperwork processing, training and shuttling them to a hotel located closest to their assigned hospital.
Over the course of the 41-day strike – one of the longest strikes in the history of the healthcare industry – Huffmaster put 1,024 replacement nurses on site at Allina, including backfilling positions for nurses who needed to leave after the initial two-week commitment. Huffmaster handled all of the logistical details – reservations, transportation, per diems, scheduling – including making sure that there were accommodations for nurses at 19 different hotels in the Twin Cities area. Adding to the complexity was the fact that the biennial Ryder Cup golf tournament was being held at a nearby country club at the same time, dramatically shrinking the pool of available hotel rooms.
Even while the strike ended on October 16, Huffmaster’s commitment to Allina continued. The other vendors let their nurses return home, while Huffmaster did the hard work of continuing to staff open positions with its BlueForce travel nurse resources. Nearly a year later, these nurses are still on the job, helping Allina provide exceptional care to its patients and keep its promise to the community.