Hiring replacement nurses cost Allina Health $20 million during a 7-day nursing strike in June and $84 million during the September portion of a strike lasting from September 5 to October 16, the Star Tribune reported.
The strikes were the result of a long-running dispute over health plans between the health system and its unionized nurses.
- Alllina Health saw an operating loss of $67.74 million in the third quarter due to the strikes, but revenues improved by 4.62% compared with last year, according to financial statements.
The saga pitting Allina Health against nearly 4,800 nurses at five of the health system's hospitals in the Minneapolis area show how costly labor disputes can be. Replacement nurses commanded premium wages and Allina was also on the hook for their transportation and housing.
The disagreement began when Allina asked nurses to switch from their union coverage, which offered low or no deductibles, to its own health plan, which offered lower premiums. The two sides reached an agreement in the middle of October, only after Minnesota Governor Mark Dayton (D) stepped in to broker negotiations, the Star Tribune reported.
The $104 million figure is certain to increase once October is accounted for in fourth quarter financials. While the dispute was costly, Allina Health estimates the switch to its corporate health plans will save $10 million per year, according to the Star Tribune. Still, health systems engaged in future labor disputes would be wise to end them amicably as swiftly as possible.