Health payment disparity affects labor talks

Tufts says it can’t match better-paid competitors on nurses pay

THE US SENATE on Tuesday delayed debate on its version of changes to the Affordable Care Act. No one knows exactly what the future holds for health care, but Gov. Charlie Baker estimates the Senate’s version of the bill would cost Massachusetts $1.7 billion annually by 2024. To say the least, these are challenging times in health care and things may get worse before they get better.

At Tufts Medical Center, we are managing through this uncertainty while providing the high-quality, lower-cost care we have become known for nationwide– the care our patients rely on.

At the same time, we are engaged in ongoing negotiations with the Massachusetts Nurses Association, making every effort to reach a contract agreement with our nurses. We recently had our 35th meeting at the negotiating table, and, again, the union representatives left the negotiations abruptly.

Over 14 months of talks, our offer for our nurses has stretched to $30 million. The three-year contract provides nurses with pay increases ranging from 5.5 percent to 10.5 percent; new staffing resources; an enhanced retirement savings plan that increases our contribution to the majority of nurses’ retirement accounts; and a comprehensive health insurance plan – with Tufts Medical Center paying at least 82 percent of the monthly cost.

We have been told time and time again by union leaders that our $30 million is simply not enough. The union has pointed to the disparity in compensation for Tufts Medical Center nurses versus peers at other Boston hospitals. Unfortunately, market dynamics and disparate reimbursement rates mean Tufts Medical Center simply cannot match competitors’ pay dollar for dollar and maintain financial stability. This reality isn’t limited to our nurse professionals; we face the same challenges with staff physicians and other key members of our care teams.

However, we are proud that Tufts Medical Center, in fact, pays its nurses a greater percentage of its earnings than other hospitals.

For almost 10 years, Massachusetts has discussed the disparity of commercial insurers‘ payment rates, but the issue to date has proved intractable. Tufts Medical Center is paid 28 percent less than Brigham and Women’s Hospital and 45 percent less than Boston Children’s Hospital by commercial insurers for the same services and the same quality of care. For every $1 in reimbursement from commercial insurers Brigham and Women’s Hospital receives from insurers, Tufts Medical Center receives 72 cents. For every $1 in reimbursement Boston Children’s Hospital receives, Tufts MC/Floating Hospital for Children receives only 55 cents.

The operating margins of Brigham and Women’s and Boston Children’s Hospital are exponentially larger than Tufts Medical Center‘s. In fiscal year 2016, Tufts had an operating margin of $8.2 million, the Brigham‘s was $93 million, and Children’s Hospital was $43.7 million.

Despite our financial constraints, we have always sought to properly compensate our staff and employees – including our nurses. At the negotiating table, the Massachusetts Nurses Association has told us we should pay our nurses more. We don’t disagree, but wage parity has to go hand-in-hand with revenue parity. As it stands, we pay our nurses about 11 percent less than their peers at Brigham‘s, despite our 28 percent lower payment rate. Based on available data, we‘ll just be about 4 percent less by 2020.

Despite these market realities, what we hear from the union is that our offer is disrespectful. Last week, the union said, explicitly, that it intends to bring our nurses to a strike when it will do the most “economic harm” to our hospital. At a time when the future of health care is so uncertain, there are many things that could harm Tufts Medical Center and hospitals around the country – but none of those things will help nurses increase their pay. And from the perspective of serving our patients, the goal of damaging the hospital is appalling, and certainly not in the best interest of the union‘s members or the community at large.

Meet the Author

Michael Wagner

President and CEO, Tufts Medical Center and Floating Hospital for Children
We believe our nurses want to be a part of the continued success of Tufts Medical Center, not part of the Massachusetts Nurses Association’s effort to harm it.

Michael Wagner is the president and CEO of Tufts Medical Center and Floating Hospital for Children.