As Hospitals Go ‘Lean’ and Squeeze Workers, Unions See Potential for Organizing
Health care is a growing, consolidated industry with billions flowing into its coffers and desperately in need of skilled labor. It’s the kind of organizing target U.S. unions have not seen for some time.
While unions have already achieved a density of 21 percent in hospitals over the last two decades, by some estimates—well above the national average—they will need more to tame the lean and mean regime brought on by a radical reorganization of hospital work.
Today’s hospitals are big business, run like factories and clustered in growing corporate systems, the result of 597 mergers from 2000 through 2009. Almost three-quarters of private hospitals belong to such systems, concentrated in urban areas. For-profit hospitals are on the rise, intensifying the competition for private and public insurance revenues.
And whatever “nonprofit” hospitals once were, today they are profit-seeking businesses, paying CEOs as much as $1.4 million a year. A survey of hospital executives found that their highest priority was “operating profit margin.”
LEAN WORK, LEAN CARE
Competition and cost-cutting pressures have led hospital managers to turn to lean production methods straight from the Toyota playbook: lean manufacturing, Six Sigma, and supply chain strategies aimed at greater efficiencies.
As with all such management-by-stress systems, “efficiency” means greater output with fewer workers. In America’s hospitals this has brought staff reductions, more outsourcing and agency workers at all levels, increasing standardization of treatment, and reorganization of work.
Outsourcing has long impacted the ancillary workforce, as food service, telephone provision, and other services are farmed out. The use of agency workers has become common for nurses, too. As short-staffing has made patient care more difficult and stressful, protection of quality care and patients’ rights have become prime union goals.
Standardization and reorganization of work are enabled by investments in new technology. Real assets per worker have grown at 5 percent or more a year since 1990—about three times the pace during the 1980s. Some of this investment is in digital labor-controlling programs such as Clinical Decision Support Systems, a program that standardizes treatment, now used in nearly two-thirds of hospitals nationwide.
Even electronic medical records, a seemingly neutral advance, increase standardization of care and provide the means to reduce the workforce.
MORE AND SICKER
Although the resulting pressures affect nurses most directly, they impact the entire workforce as cost-cutting pressures grow. This shows up in wage trends. Median weekly earnings, adjusted for inflation, have risen only slowly for the last 10 years—a mere three-tenths of 1 percent a year for support workers. Even nurses, whose pay is relatively decent, saw only a half percent increase per year in real terms.
Unionized health care workers, of course, have done considerably better, with major contracts often producing 3-4 percent annual raises.
For nurses in particular, hospital work has become intense. The recession made matters worse, as more than half a million hospital jobs disappeared between 2007 and 2008, before recovering in 2010.
In addition, the shift of less ill patients to outpatient care, to cut costs, has meant that the remaining inpatients are sicker and require more time-consuming care.
But because hospitals (except in California) aren’t required by state law to cap the number of patients each nurse cares for, nurses are pressured to take more patients than they can handle, giving each less bedside time. Nurses unions, especially those affiliated with the new National Nurses United, have made nurse/patient ratios a central bargaining, organizing, and political issue.
As with all lean systems, hospital management demands greater workforce “flexibility.” For nurses this means “floating,” transferring a nurse temporarily from one ward to another. Nursing, however, is not a one-size-fits-all occupation. Nurses specialize. Floating ignores this fact, so, it too has become a key bargaining issue.
Unions have fought to limit overtime because it is another central aspect of lean flexibility as well as a way to reduce staff. The battle is often legislative. While a campaign to win federal limits failed, nine states have passed laws limiting nurses’ overtime, due to union efforts. Most restrict work beyond 12 hours, but in New Jersey after eight hours.
Challenging work intensification has, of course, met fierce resistance from profit-seeking hospital managements. As a result the use of strikes and strike threats by health care unions has increased, even while strikes by most unions have dropped sharply.
As President Obama’s health care law reduces Medicare payments to hospitals, it will increase pressures to restrain wages and intensify work (while pouring billions into the insurance industry).
As some 34 million people gain either public or private insurance, the hospital industry will grow. But the aggressive for-profit chains such as HCA and Tenet will skim the healthiest from the private insurance market and specialize in the most lucrative services, leaving the mass of Medicare and Medicaid patients for the “nonprofits.” These will see more cost pressures.
Given the complexity of the multi-payer system, much of the new money flowing to hospitals will go to administration. Administrative expenses already average 23 percent of costs, far higher than in national or single-payer health care systems in other developed nations.
Bookkeeping costs cut into care-giving. With millions of new forms to process and claims to argue over, administrative costs will be an increased drain on hospitals and thus a pressure on the workforce.
OPPORTUNITY FOR UNIONS
Hospital growth could mean union growth, and lean production pressures certainly give workers more incentives to organize.
But unions oriented to partnership with employers are unlikely to attract the workers who are feeling those pressures. Nor are they likely to win concessions from aggressive managements.
Instead, the dual patients’ advocate, workers’ advocate approach taken by a number of unions, especially the nurses, is far more likely to make the breakthrough this new situation offers.
Kim Moody, a former Labor Notes staffer, is the author of Workers in a Lean World.