Healthcare Issues & Trends

Advice & Insights for healthcare's Leaders & HR Professionals

New Labor Union Rules Will be Devestating for Non-Acute Care Facilities

Posted on May 25, 2012 by Kevin Haeberie

If your hospital or health system has a long-term care facility, home health agency, or even a comprehensive psychiatric hospital, then you’ll need an entirely new leadership approach to remain union-free.  This is especially true if the effective and relentless gorilla warfare tactics used by Service Employees International Union and the California Nurses Association become more widespread and consistent among all other labor unions.  The non-acute care setting, not hospitals, will likely become the new ground-zero for labor organizing throughout the nation.  Why?  Because the National Labor Relations Board (NLRB) has made it incredibly easy for unions to get into these facilities. A few years ago, there was an attempt in Congress to change the National Labor Relations Act (NLRA) - the federal labor law which governs unions and union organizing.  The proposed changes were designed to make it easier for unions to organize employees and included eliminating secret ballot elections.  The political reason for changing the NLRA was the dramatic decline in union membership since the 1950s, with less than 8% of the private workforce now represented by a labor union.  This attempt by Congress to make changes to the Federal Labor Law was unsuccessful. The need to address the issue of declining union membership remained after the failed attempt in Congress, so a different political approach was taken.  The National Labor Relations Board (NLRB) in Washington D.C. changed a number of their internal rules to make the process of forming a union much easier than it has been for the last three decades. Here are the NLRB Rule Changes: Quick Elections-- Conducting elections immediately after the union files their petition for an election is one change that went into effect on April 30 - but it was placed on hold a few days later by a federal judge due to procedural issues on how the rule change was implemented.  It is likely the rule change will be reinstated in the next few months.  The union’s tactic under this new rule is to build union support as quietly as possible so that the employer is unable to provide counter information until it is too late.  The other benefit of a quick election is the minimal time for employees who may oppose unionization to become motivated to vote or speak out.  A lower voter turnout almost always improves the unions chances of winning an election, since the union supporters are already motivated to vote. Small Voting Groups--  Another NLRB rule change that will dramatically impact all non-acute care settings.  Since the first of the year, the NLRB now allows unions in non-acute healthcare settings to seek and represent a single job classification or even a single department.  In the past, the typical voting units would be “non-professional” or “professional” employees.  This included large groups of disparate employees, typically with different issues that presented a challenge for the union to effectively bring together without a significant organization-wide issue.  A union can now seek an election for just a single job title (i.e., Mental Health Workers, Hall Aides, Social Workers, Unit Clerks, Account Reps), or even a department with multiple job titles only in that department (i.e., Food and Nutrition).  Any single job classification could be found to be an appropriate bargaining unit.  The new rules also limit the hospitals ability to challenge the appropriateness of the bargaining unit pre-election, and in some cases, even post-election. Why are small sized bargaining units a problem?  There could be over 50 non-management job titles in a non-acute facility.  Potentially, over 50 different bargaining units could exist, with 50 different unions and 50 different sets of negotiated workplace rules, benefit packages, and wage programs.  There also would be the potential for over 50 different strikes, as well as the cost and expense of negotiating and administrating over 50 different contracts. The problem of too many bargaining units was identified as an issue by Congress in 1974, when healthcare organizations came under the NLRA.  Congress cautioned the NLRB of the potential for a high level of workplace disruption.  Congress believed that a “proliferation” of bargaining units could have a serious and detrimental impact on the delivery of care, resulting in uncoordinated activities and constant disruption due to the threat of numerous strikes. Smaller bargaining (voting) also makes it easier for the unions to exploit employees.  A small number of employees could be dissatisfied at a particular time, concerning a very limited issue, and the union could exploit that temporary dissatisfaction.  A short-lived level of dissatisfaction, which would normally pass after the issue was resolved, could now result in long-term union representation, since once the union is in, the ability to decertify and remove them is extremely difficult. The new union organizing rules will require a new leadership approachThe new approach requires a higher level of urgency to identify and deal with issues which may create a temporary high level of dissatisfaction among employees in a job classification, work area, or department.  Unions are opportunistic.  The union leaders establish contacts within departments and work units to notify the union when a negative employee event occurs or when a group of employees is particularly dissatisfied. In the past, methodically addressing an issue within a job classification or work area would not impact the overall union vulnerability of a larger voting unit, unless the issue was widespread and impacted multiple work areas.  Union vulnerability tended to be driven more by hospital-wide issues that were shared by employees in multiple job classifications and departments. Under the new smaller voting unit rules, a very specific issue among a narrow group of employees that lingers unidentified or requires weeks or months to resolve, could be the opportunity the union is constantly looking to exploit. Employees look to unions mainly because they believe the union will resolve their issues better than hospital leadership.  On a work unit level, many times this attitude is fleeting and is replaced by indifference to the union or even support for the hospital leadership once an issue is resolved or expectations are managed through communication and discussion. Other times, employees may be reluctant to discuss an issue until it reaches a high state of discontent.  Once the issue is clearly identified, leadership responds and the situation is diffused.  In both cases, union vulnerability is at a high level for a period of time and then ultimately diminishes. With the new NLRB rules which allow for quicker elections and smaller bargaining units, it will be vital to create a continual “issue identification culture” that will limit the number and types of issues which can fester before being recognized.  Once the issue is identified, it will be imperative to take quick action, which is counter to the more methodical, process-oriented aspect of care delivery and healthcare management. To help limit employee perception that a union can identify and resolve issues better than leadership, all employees need to be educated with a uniform level of knowledge of the limits to union bargaining, the costs of union representation, and the impact of strikes on patients, employees and the community. So that employees are less judgmental of leadership’s attempts to manage and resolve workplace concerns, employees need to understand that a union cannot necessarily resolve their issues and that issue resolution in a union environment can be lengthy with no guarantee of a positive outcome.  There needs to be an identifiable contrast between being represented by a union, and the efforts of leadership to create a positive as possible workplace. A perception that leadership respects employees for the work they do, and that they value and act on their concerns, needs to exist.  This culture needs to permeate all levels of leadership in the organization so that an expectation can also be established that employees respect leadership and are focused on the care and service provided to patients. Traditional union avoidance strategies in non-acute care settings are becoming as obsolete as the fax machine.  Think now of ’texting.’  It’s immediate, to the point, and focused.  Timely and focused education as well as issue identification and resolution is needed to overcome the ‘Welcome’ sign the NLRB has put out for unions in non-acute care settings.

4 Primary Questions Hospitals Should Ask When Assessing Special Pay

Posted on May 22, 2012 by Gallagher Integrated

From the original article, "What are you really paying?  Compounding of pay practices and market positioning," as authored by Martina Young, Senior Consultant with Integrated Healthcare Strategies. Healthcare organizations typically create special pay programs to draw employees to work the less desirable shifts or come to work on short notice.  Programs such as shift differentials; specialty differentials; “hot shift” pay; call pay; travel time; stand-by pay; weekend differentials; holiday pay; weekend alternative plans; extra shift bonuses; and short-staffing pay are all pay policies developed to try to remedy staffing problems. Although special pay programs make up a significant portion of an employee's total compensation, most organizations do not review these programs and policies on an annual basis.  The process typically involves apples-to-apples comparisons of each individual practice to the market, such as each individual shift differential compared for groups of positions.  The hidden cost to many organizations is the compounding effect of these differentials. Healthcare industry salary surveys typically report each type of common differential and pay program individually.  What doesn’t get captured through the surveys are the actual calculation and payment of these differentials to employees through the payroll systems.  Integrated Healthcare Strategies has uncovered differences between the intent of a pay program and how it is actually being administered, and our assessments have identified excessive pay practices. Case Examples: An organization pays shift differentials as a percentage of the base rate.  Rather than having a night differential calculated from the base rate and then the weekend differential calculated separately from the base rate, the weekend night differential could be set in the payroll system by using the night differential plus the base rate together, and the additional weekend percentage calculated again on top.  When an employee worked in a specialty area, such as intensive care, the organization paid a specialty differential on top of the night, weekend, and base rate combination. Our consultants have seen other pay practices that skyrocketed hourly rates for a staff registered nurse up to $75 per hour or more. 4 Primary Questions Hospitals Should Ask When Assessing Special Pay:

  1. Are the programs flat dollar or percentage?
  2. How are the programs being calculated within the payroll system?
  3. Are the programs being compounded in the calculations?
  4. How does the total rate compare to your competitors?

We were recently retained by two metropolitan hospital associations to research and survey total compensation for staff-level positions.  The objective of the survey was to determine whether organizations are paying positions comparable to other regional organizations for total compensation, regardless of how the compensation was paid.  The survey yielded data to determine total compensation market averages for the region.  This approach offers an alternative method for determining what your organization should really pay for particular positions, and may become more prevalent in coming years with the continual development of new pay program elements. View original article.

3 Compensation Challenges Unique to Critical Access Hospitals

Posted on May 21, 2012 by Gallagher Integrated

From the original article, “Unique Compensation Issues in Critical Access Hospitals" by Michael Ritter, Compensation Analyst with Integrated Healthcare Strategies. Critical access hospitals (CAHs) face many unique challenges in comparison to their larger or more urban counterparts.  While most healthcare organizations experience some difficulties attracting and retaining talent regardless of location or size, this specific issue has been at the forefront for rural and critical access hospitals for well over a decade. CAHs must address talent management issues that are in part perpetuated by their defining characteristics, such as being located more than 35 miles (or 15 in special situations) from the nearest hospital, by their size, and by their inherent levels of complexity. 3 Compensation Challenges Unique to Critical Access Hospitals:

  1. Leadership positions that oftentimes function in many capacities and across multiple functions versus more distinct and easily defined roles found in larger organizations;
  2. Positions that require 24/7 coverage regardless of workload and throughput, such as lab and pharmacy;
  3. Positions that are trained across multiple modalities in areas such as radiology, laboratory, and therapy.

These issues, plus several others, call upon the need for compensation benchmark data specific to CAHs .  But, the CAH healthcare industry segment has been underserved with benchmark pay data.  This year, Integrated Healthcare Strategies launched a Leadership and Staff Compensation Survey for Critical Access Hospitals.  With approximately 1,327 critical access organizations in the United States, our objective was to provide CAHs with relevant published data that can be used to effectively evaluate pay levels.  The survey results will allow CAHs to benchmark against like-size and similarly structured organizations, while assessing what has become an all too often overlooked component of many healthcare organizations’ cost structure -- wages for staff through director-level positions. If you have questions related to the data collected in this survey, or on how to participate in a future survey, contact the Integrated Healthcare Strategies Compensation Survey Team at 800.327.9335 or at View original article.

3 Steps to a Successful Physician Compensation Policy

Posted on May 18, 2012 by Gallagher Integrated

From the original article, "Physician Compensation Policy: Do You Have One?" by William F. Jessee, MD, FACMPE, Senior Vice President and Senior Advisor with Integrated Healthcare Strategies.Hospital-employed physicians have increased tremendously over the last few years, and is likely to grow even more in the future.  Based on data collected in their 2011 annual survey, the American Hospital Association (AHA) now estimates that one of every four practicing physicians is a hospital employee. As the number of physician employees has grown, it is increasingly important for hospitals to have clear policies and processes behind their physician compensation decisions.  Not only a compliance issue, it is a critical element for maintaining morale and satisfaction among the physician workforce. First and foremost, physician compensation must be “reasonable.”  Medicare anti-kickback statutes require that all payments meet reasonableness standards, and stipulate several national data sources that can be used as benchmarks for determining reasonableness.  It is important to look at total compensation, not just cash compensation.  In addition, there should be a relationship between amounts paid and revenues (or work RVUs) produced by each physician. Fairness and equity are as important for physician employees as for other employees of the organization.  Since many physician practice acquisitions and physician employment decisions are made singularly, it is easy to create an unintentional patchwork quilt of disparate payments and compensation plans.  The differences can quickly become the subject of medical staff lounge conversations and a source of disgruntlement for physicians who believe that they are undervalued by the organization. Here are three recommendations for a successful physician compensation policy:

  1. Working through your chief HR officer, develop and adopt organizational policies on physician compensation, including at least the benchmarks to be used, the targeted percentile, and the relationship to production, quality measures, and patient satisfaction
  2. Adjust existing compensation plans over time to a standardized approach that is based on “equal work for equal pay,” but which also recognizes legitimate differences that may be the basis for differentials among individuals
  3. Create a board physician compensation committee to assure board oversight of physician compensation policies and their implementation; use the committee to review any proposed exceptions to the policies to assure that they are still compliant with law and regulation, and meet the test of “reasonableness”

Compensation can be an important driver of physician performance, as well as morale.  As with other parts of an organization’s workforce, standard policies and procedures are essential. View original article

Compensation for Nonprofit Health Care Board Members

Posted on May 14, 2012 by Gallagher Integrated

Is compensating nonprofit health care board members the right path or equivalent to entering a minefield? As appeared in the Spring 2012 issue of Inquiry Magazine. In fall 2011, the Governance Institute released the results of its most recent compensation survey showing that 15 percent of the 660 nonprofit hospital and system respondents were compensating some or all of their board members, up from 10 percent in 2009. Government-sponsored respondents were found to be the most likely to compensate some or all of their board members, and nonprofit health system respondents were found to compensate their board chairs more than others (25 percent at $30,000 to $50,000 and 25 percent at more than $50,000). Are there circumstances under which it is appropriate for a nonprofit health care organization to compensate, or to consider compensating, some or all of its board members? Would board members receiving some level of compensation tend to take their board assignments more seriously? If compensation is deemed appropriate for some board members, should all be compensated to at least some degree? Where a board decides that all its members should receive some compensation, should individual board members be permitted to opt out? These are among the issues explored in the following discussion, another in Inquiry’s ongoing Dialogue series, co-sponsored by the Alliance for Advancing Nonprofit Health Care to provide a variety of voices on important nonprofit health care issues. Read full article.

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