By Tracey Drury – Reporter, Buffalo Business First
Oct 5, 2022
A new labor agreement could boost Kaleida Health's competitiveness when it comes to hiring and keeping staff.
At the same time, the organization avoided a strike that would have cost the system millions.
That's all according to Don Boyd, Kaleida's CEO, who said the Oct. 2 late-night deal helped move the system toward its goal of becoming a top employer for Western New York health care workers.
Kaleida is already the region's largest health system, with revenue of $2 billion and nearly 10,000 part- and full-time workers across the region. But it has also faced some of the highest losses among hospital systems, with a deficit of more than $100 million projected for the second consecutive year.
Boyd declined to discuss details of the deal, but it's expected to cost Kaleida somewhere between $200 million and $500 million more than the last contract for the 6,300 workers covered by Communications Workers of America (CWA1168) and 1199SEIU United Healthcare Workers East.
Both sides recognized how devastating a strike would have been, Boyd said, especially facing the possibility of losing patients to providers outside the region.
“We were organizing for the possibility that people have had to leave Western New York for care, possibly to Rochester or elsewhere,” he said. “The impact of a strike would have been catastrophic and devastating, something I’m not certain our community would ever have been able to recover from.”
Here’s a look at four factors that likely played a role in the new deal:
The cost of a strike
Kaleida officials estimated a strike would have cost the system approximately $142 million per month, including $50 million per month in projected losses from temporarily shutting down elective surgeries and procedures and reducing bed census at its hospitals. That’s the amount it lost during the pandemic when the state shut down surgeries.
That’s in addition to $23 million weekly to fund replacement workers through Huffmaster, a national health care crisis staffing firm, which had been working with Kaleida on a contingency plan to supplement staff across the system.
Then there was the potential “back of the envelope” costs. Without income from elective surgeries, hospitals also have no way to counter the losses from Medicaid and Medicare services that may continue in the ER and surgeries that can’t be postponed.
“That’s how you pay for everything,” said Richard Gundling, senior vice president at the Healthcare Financial Management Association. “The emergency patients are still coming in, people are still having heart attacks and car accidents.”
The impact of a strike on patient care
Last year’s 41-day strike at Catholic Health’s Mercy Hospital severely reduced operations at that system’s largest hospital. In Kaleida’s case, there was no pre-determined agreement that a strike would be limited to just one site. That left open the possibility a strike could have occurred at any or all of its hospitals, as well as at clinics and long-term care sites.
Union officials had stressed from Day 1 that their demands for increased staffing levels and higher compensation go back to improving the quality of care for patients. They also acknowledged the impact a strike would have had on patients.
Other area hospitals would have had to make adjustments to accommodate increased traffic and everything from ER access to ICU capacity and specialty services, including stroke services at the Gates Vascular Institute and pediatric specialties at Oishei Children’s Hospital.
The cost of staffing recruitment and retention
A strike would have required bringing in thousands of temp and agency workers. That’s one of the major factors the union had been fighting, pointing to both the increased cost to the system as well as the demoralizing effect that has on the regular workforce who end up working side-by-side with people earning much more for doing the same job.
Union leaders said they held strong in crafting the new deal.
“We put quality patient care at the top of our agenda and fought tirelessly for contract proposals that could make Kaleida a great place to work and to be cared for again," said Debora Hayes, CWA District 1 area director.
The deal also makes Kaleida a leader when it comes to recruiting and retaining staff, Boyd said. The details of the deal likely will become public ahead of the ratification votes, which will take place in the next few weeks.
"We believe through this agreement we’ve done that," Boyd said. "When the details of that information can be shared internally and externally, that will help us in stabilizing our workforce and recruiting new staff to the organization."
The impact of a strike on the system's reputation
The very public nature of a strike often leads to ugly accusations on both sides. And even after it’s done, it’s not so easy to get the community to forget – a factor that can have an even worse impact on a hospital’s long-term sustainability than the financial losses.
“You have those lingering reputational issues, maybe from of the community physicians and patients are angry for a while, but also, if the nurses disgruntled or the laboratory techs, are they devoted to the facility?” Gundling said. “People get over it, but it does have a short-term impact and concern.”
Boyd agreed, pointing also to the loss of confidence by the community in the organization’s ability to meet its health care needs.
"The possibility of losing physicians and losing dedicated staff as a result of it – even if an agreement were settled after a strike – there’s all of those risks that are part of that that needed to be considered," he said.
Kaleida Health's Don Boyd: Tentative labor deal will boost care, save millions - Buffalo Business First (bizjournals.com)
Oct 5, 2022
A new labor agreement could boost Kaleida Health's competitiveness when it comes to hiring and keeping staff.
At the same time, the organization avoided a strike that would have cost the system millions.
That's all according to Don Boyd, Kaleida's CEO, who said the Oct. 2 late-night deal helped move the system toward its goal of becoming a top employer for Western New York health care workers.
Kaleida is already the region's largest health system, with revenue of $2 billion and nearly 10,000 part- and full-time workers across the region. But it has also faced some of the highest losses among hospital systems, with a deficit of more than $100 million projected for the second consecutive year.
Boyd declined to discuss details of the deal, but it's expected to cost Kaleida somewhere between $200 million and $500 million more than the last contract for the 6,300 workers covered by Communications Workers of America (CWA1168) and 1199SEIU United Healthcare Workers East.
Both sides recognized how devastating a strike would have been, Boyd said, especially facing the possibility of losing patients to providers outside the region.
“We were organizing for the possibility that people have had to leave Western New York for care, possibly to Rochester or elsewhere,” he said. “The impact of a strike would have been catastrophic and devastating, something I’m not certain our community would ever have been able to recover from.”
Here’s a look at four factors that likely played a role in the new deal:
The cost of a strike
Kaleida officials estimated a strike would have cost the system approximately $142 million per month, including $50 million per month in projected losses from temporarily shutting down elective surgeries and procedures and reducing bed census at its hospitals. That’s the amount it lost during the pandemic when the state shut down surgeries.
That’s in addition to $23 million weekly to fund replacement workers through Huffmaster, a national health care crisis staffing firm, which had been working with Kaleida on a contingency plan to supplement staff across the system.
Then there was the potential “back of the envelope” costs. Without income from elective surgeries, hospitals also have no way to counter the losses from Medicaid and Medicare services that may continue in the ER and surgeries that can’t be postponed.
“That’s how you pay for everything,” said Richard Gundling, senior vice president at the Healthcare Financial Management Association. “The emergency patients are still coming in, people are still having heart attacks and car accidents.”
The impact of a strike on patient care
Last year’s 41-day strike at Catholic Health’s Mercy Hospital severely reduced operations at that system’s largest hospital. In Kaleida’s case, there was no pre-determined agreement that a strike would be limited to just one site. That left open the possibility a strike could have occurred at any or all of its hospitals, as well as at clinics and long-term care sites.
Union officials had stressed from Day 1 that their demands for increased staffing levels and higher compensation go back to improving the quality of care for patients. They also acknowledged the impact a strike would have had on patients.
Other area hospitals would have had to make adjustments to accommodate increased traffic and everything from ER access to ICU capacity and specialty services, including stroke services at the Gates Vascular Institute and pediatric specialties at Oishei Children’s Hospital.
The cost of staffing recruitment and retention
A strike would have required bringing in thousands of temp and agency workers. That’s one of the major factors the union had been fighting, pointing to both the increased cost to the system as well as the demoralizing effect that has on the regular workforce who end up working side-by-side with people earning much more for doing the same job.
Union leaders said they held strong in crafting the new deal.
“We put quality patient care at the top of our agenda and fought tirelessly for contract proposals that could make Kaleida a great place to work and to be cared for again," said Debora Hayes, CWA District 1 area director.
The deal also makes Kaleida a leader when it comes to recruiting and retaining staff, Boyd said. The details of the deal likely will become public ahead of the ratification votes, which will take place in the next few weeks.
"We believe through this agreement we’ve done that," Boyd said. "When the details of that information can be shared internally and externally, that will help us in stabilizing our workforce and recruiting new staff to the organization."
The impact of a strike on the system's reputation
The very public nature of a strike often leads to ugly accusations on both sides. And even after it’s done, it’s not so easy to get the community to forget – a factor that can have an even worse impact on a hospital’s long-term sustainability than the financial losses.
“You have those lingering reputational issues, maybe from of the community physicians and patients are angry for a while, but also, if the nurses disgruntled or the laboratory techs, are they devoted to the facility?” Gundling said. “People get over it, but it does have a short-term impact and concern.”
Boyd agreed, pointing also to the loss of confidence by the community in the organization’s ability to meet its health care needs.
"The possibility of losing physicians and losing dedicated staff as a result of it – even if an agreement were settled after a strike – there’s all of those risks that are part of that that needed to be considered," he said.
Kaleida Health's Don Boyd: Tentative labor deal will boost care, save millions - Buffalo Business First (bizjournals.com)
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