Nurses' Gain in Hospital Contracts May Push Up Health Group Costs.

Key contract agreements reached between the California Nurses Association and Catholic Healthcare West at five Southern California hospitals could end up forcing other hospitals to give costly concessions to unions as nursing professionals gain ground.

The pacts with the state's largest not-for-profit hospital chain, which nurses will wrap up voting on this week, came in the space of just a few days, and only six months after the registered nurses union organized the hospitals. That's almost half the time it normally takes to bargain a first contract.

The pacts included key labor gains, such as the right to submit staffing disputes to binding arbitration, a ban on mandatory overtime, and the counting of overseas experience in calculating pay, a breakthrough for the system's many Filipina nurses.

Southern California historically has been a region where nurses have organized in low numbers, compared with the northern half of the state, but if the CNA's success is any indicator, that may not be for long.

"Whether they are unionized or not, they are going to be pressured to develop similar packages for nurses," said Jim Lott, executive vice president of the Hospital Association of Southern California, the industry's regional trade group. "We are faced with a critical nursing shortage and all hospitals want to provide a good working environment for our nurses."

Shortage behind gains

That shortage has given unions an upper hand.

The Service Employees International Union, which in the past focused on organizing lesser-skilled hospital workers, scored a big win at another CHW hospital last month when 600 registered nurses at Northridge Hospital Medical Center voted to join that union.

That comes on top of organizing wins at two CHW facilities in Ventura County earlier this year for the SEIU, which like the CNA, reached overarching "organizing" agreements with the San Francisco-based Catholic system earlier this year.

(Those agreements give union organizers greater access to workers in exchange for such concessions as pledges to not attack the chain publicly. The SEIU in particular had waged a withering campaign against the not-for-profit system, questioning its commitment to Catholic values.)

The CNA, meanwhile, is readying for another union election this Tuesday and Wednesday at Long Beach Memorial Medical Center, a Memorial Health Services facility, where it barely lost an organizing vote last year. It's also looking for other Southern California and L.A. county hospitals to organize.

"I don't have any doubt that before long the majority of nurses in Southern California will be represented by the CNA," boasts David Johnson, the union's Southern California director. "This is a rapidly unionizing work force."

The union represents 38,000 RNs statewide, but it's estimated that fewer than 20 percent of the nurses in Southern California are organized, while more than half are organized in the Bay Area and northern part of the state. However, in the past six months the CNA alone has organized nearly 3,000 nurses in Southern California.

Glendale Memorial Hospital and Health Center, San Gabriel Valley Medical Center, California Hospital Medical Center in downtown Los Angeles and St. Mary Medical Center in Long Beach are the CHW facilities in L.A. County that reached tentative contract agreement over the last few weeks.

Community Hospital in San Bernardino also reached a tentative agreement, while the union was still negotiating at two other CHW hospitals.

Ratification votes

Last week, 87 percent of the nurses at St. Mary's and three-quarters of the nurses at Glendale Memorial voted to ratify their contracts. The votes were expected to continue at least through Tuesday, with a vote by nurses at California Hospital.

While the contracts included some provisions unique to each facility, the union says they all included the establishment of experience-based pay scales -- including pay hikes of up to 21 percent --retiree health benefits for the first time, and staffing provisions that could force the hospitals to hire more nurses.

The union said that while many of the provisions appear in CNA contracts in the northern part of the state, many are new to Southern California -- and are even more remarkable for being part of first-time contracts.

Linda Bridge, a neonatal intensive care nurse at Glendale Memorial who was on the bargaining team, said that while the salary and benefit gains were appreciated, most nurses valued even more the greater voice the contracts provide in staffing decisions, such as the binding arbitration.

"As patients advocates we have never had that before," said Bridge. "We could be suspended for speaking up for patient care."

CHW says it is ready to work cooperatively with its newly unionized work force. But the success in organizing comes at a tough time for hospitals.

While there is anecdotal evidence that hospitals have been able to demand larger reimbursements this year from health insurers, a recent study showed that the median operating margin for Southern California hospitals dropped to -0.53 in 1999 from 1.44 percent in 1995.

And it comes at a particularly tough time for CHW The chain reported operating losses of $307 million in 2000 and $309 million in 1999 prompting a management change this summer and the adoption of a plan aimed at trimming $100 million in expenses. Moreover, seven hospitals are breaking away from the 48-facility chain.

Elaine Batchlor, vice president at the California HealthCare Foundation, said the system may have felt competition from Kaiser Permanente, which last year reached a nationwide agreement giving its nurses a far greater say in staffing and quality of care issues.

"They may have felt some competition here," she said.

Diane Hirsch-Garcia, a CNA negotiator, said the system complained during negotiations it could not afford various contract provisions, but then ended up acceding to them anyway.