The chairman of the Brooks Memorial Hospital Board of Directors has responded to news that employees plan to picket the lack of a new labor contract this Thursday from 2 to 5 p.m.
In an open letter sent to the OBSERVER on Sunday, Christopher Lanski explained the hospital cannot afford to increase expenses by conceding to the demands of the collective bargaining unit, 1199 Service Employees International Union. He states the hospital could face "stark, serious and unsustainable" consequences if that were to happen, due to millions of dollars in operational losses over the past several years.
The hospital lost $5.8 million the past two years, with a projected loss this year of $3.4 million.
Chris Lanski, Brooks Hospital board chair, speaks during a press conference in June. At left is Gary Rhodes, interim chief executive officer.
"This bleak financial picture has made it more than clear that our hospital cannot continue to operate as it has in the past," Lanski said. "To do so would be irresponsible and put our hospital and services to the community at great risk."
Among the significant economic challenges facing the hospital, inpatient volume is down as much as 22 percent since 2011, according to Lanski, who added this is a trend for hospitals across the nation. Lanski blames this trend on the shift to higher co-pays, deductibles and out-of-pocket expenses, meaning more and more individuals are not accessing a hospital for non-emergent health care needs.
The letter also points to declining reimbursement rates; third-party payers have not kept pace with reimbursement for hospital services, and in some cases even pay less than Medicare or Medicaid. In fact, according to the letter, insurers are sometimes paying Brooks less than the cost to provide services.
Brooks' losses Reported in letter
2012: $2.7 million
2013: $3.1 million
2014: $3.4 million
Lanski said the hospital may have to drop those carriers that add to lost revenue if payment levels do not stabilize and rise up to the levels similar to other hospitals in the region.
"It is under these unprecedented conditions that we find ourselves in contract negotiations," Lanski wrote. "Asking for concessions in employment expenses is difficult for all parties involved in the negotiations. We are working to appropriately balance our pre-eminent concern to fulfill our community trust to have a strong and sustainable hospital with our deep commitment to our hard-working employees. In doing so, it is clear that with our economic situation, we simply cannot take on additional expense, and in fact need to reduce expenses."
Employees have been asked to delay increasing any additional labor expenses, move overtime to the national norm of 40 hours per week and decrease the number of hours in the benefit leave program. These concessions could potentially assist in "providing a necessary economic buffer while we (the hospital administration) recast the direction and financial foundations of the hospital" in the short-term.
"We do this (asking for concessions) knowing that our current total rewards program - our compensation and benefits - in most instances exceed regional market standards for health care," Lanski explained. "The SEIU1199 has responded to this request with proposals that would add to our fiscal deficit, on average, over $400,000 in new expense each year. We believe this to be irresponsible."
The board chairman accuses union officials of appealing to the community to incite fear and propagate false rumors about the hospital's direction.
He adds those same officials seek to erode the reputation of the hospital, which is affiliated with the University of Pittsburgh Medical Center.
"They have wrongly told 1199 retirees that their pension is being frozen. They wrongly look to a nemesis beyond Brooks, with whom they appear to want to use our hospital as a proxy in their campaign," Lanski asserted. "They wrongly engage in innuendo and misleading statements to raise fear, erode confidence and generate sympathy for an agenda that will be detrimental to the community and our employees."
Lanski concluded his letter by writing everyone agrees on the fact that this is "our" hospital, meaning the hospital is in the service of the local communities and not the agenda of the labor union.
"The issues are here, in front of us, and demanding to be addressed," he said. "(This) will not be easy, and what we have asked of all of us is not easy. But we believe in Brooks, our leaders and our employees, and know that together, we can establish a hospital with a secure foundation and trusted services into the future."
Last week, Brooks employees delivered a 10-day notice of picket to hospital management. The union's bargaining committee, made up of Brooks workers, accused hospital administration of stalling negotiations by putting forth contract proposals that they knew were unacceptable to the workers.
Contract talks began in early March, but have made little progress, even with the help of a federal mediator.
"We aren't asking for much," Rosie Calph, a medical records clerk at Brooks for over 26 years, said in a previous OBSERVER article. "Just a fair wage for an honest day's work and the hope that the hospital does the right thing for our community."
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