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Hospital board okays wage reductions to bridge loss of Kaiser contract

Submitted by on 1, December 14, 2009 – 5:50 amNo Comment

img_1187-300x202The Alameda Health Care District Board voted 5-0 on Wednesday night to allow Alameda Hospital management to seek 5 percent across-the-board wage reductions as part of a wider effort to bridge the pending expiration of the hospital’s contract with Kaiser Permanente.

The wage reductions could save the hospital $2 million next year if management can win approval from the five unions that represent many of the hospital’s 600-plus part-time and full-time employees.

The Kaiser contract generated $9.8 million a year for the hospital, and it expires on March 31, 2010. The hospital’s anticipated net revenues for this year were $67.7 million.

The pay cuts are part of a broader plan that Chief Executive Officer Deborah Stebbins said she hoped would push the hospital toward longer term financial success. That plan includes efforts to increase the number of surgeries performed by non-Kaiser doctors at the hospital, the creation of new long-term care options and the expansion of existing ones. It could also include layoffs.

“We really are trying to plan for the long view” instead of just reacting to the hospital’s current situation, Stebbins said of management’s decision to pursue pay cuts.

A spokesman with the California Nurses Association, which represents nurses at the hospital, said he had not yet been formally presented with the wage reduction proposal.

A spokeswoman for SEIU-United Healthcare Workers, which recently secured an 18 percent wage hike for the 180 hospital employees they represent in exchange for concessions on health benefits, said her members care about the hospital and are willing to talk with management. But she said the union’s current contract helps the hospital retain staff, boosting patient care there.

“Our members care about quality patient care.  And the contract focuses on keeping the high standards for patient care through staff retention, part of which is making sure the hospital workers receive wages that reflect their contribution to the hospital,” SEIU’s Adriana Surfas said.

Stebbins said hospital management is looking at developing programs that are in limited supply here in the East Bay and beyond. Programs hospital management has begun to look at include a long-term acute care program for people who are very sick or who require long-term therapy to recover from an injury or procedure; and a long-term pediatric care program.

Management is also looking at adding beds to the hospital’s subacute program, whose patients would include people who are dependent on a ventilator or others who are in a semi-vegetative state, and enhancing the hospital’s surgical capabilities. She said the hospital has invested about $110,000 in new surgical equipment and is looking at investing in a digital imaging system that could cost more than $1 million, in an ongoing effort to modernize its capabilities.

Kaiser announced in November that they had decided not to renew their contract with the hospital, citing their construction of a host of new facilities to serve their subscribers. Their move follows years of rising unemployment – and growing ranks of uninsured Californians. Kaiser surgeries accounted for 60 percent of the surgeries performed at the hospital.

The hospital was $500,000 in the black at the close of last fiscal year, after facing years of losses. But it faces impending deadlines to make what will be some very expensive seismic upgrades. Stebbins said hospital management is working with local legislators in an effort to get a bill that would give the hospital a break on the deadlines.

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