As One Union Nears Contract with St. Mary’s Buyer, Another Aims to Disrupt Deal

Andrew Kitchenman | April 19, 2013 | Health Care
Divisive plan to convert Passaic's remaining hospital to for-profit status may be all that stands between it and closure

St. Mary's Hospital in Passaic.
While outside labor unions have been directing a barrage of criticism at Prime Healthcare’s proposed purchase of St. Mary’s Hospital in Passaic, that hasn’t stopped Prime from quietly working out a contract agreement with the hospital’s own union.

When Prime announced on Monday the tentative agreement with the Jersey Nurses Economic Security Organization – approved by the union yesterday — it was in contrast to the position staked out by the Health Professionals and Allied Employees opposing Prime’s entry in the state.

JNESO has expressed concerns about for-profit hospital conversions in the past, but it clearly has a stake in making sure that St. Mary’s continues to operate. Both the hospital and Prime have said it would close if its sale were blocked.

“The union doesn’t choose who the successful bidder is — that’s generally reserved for management,” said Virginia Treacy, JNESO executive director. “I think it’s extremely easy for people who have no skin in the game to take a position about what would happen in a facility.”

While Treacy said the state should conduct a stringent review of Prime’s proposed purchases of St. Mary’s and Saint Michael’s Medical Center in Newark, she also said she was “perturbed” with another union taking a public position that could put the hospitals at risk.

“I’m extremely concerned that their opposition might cost 2,600 people their jobs,” Treacy said, adding that St. Mary’s cash flow is “extremely precarious.” Union work on the Saint Michael’s contract is at an early stage.

St. Mary’s spokeswoman Vanessa Warner said of JNESO: “They understand that St. Mary’s is the only hospital left in the entire city [Passaic], and that without Prime, St. Mary’s Hospital will close. The entire city would suffer a terrible blow in terms of safety, access to quality health care, and employment opportunities.”

While hospital unions generally oppose conversions to for-profit status, that doesn’t mean they won’t negotiate with a prospective for-profit buyer, according to Susan J. Schurman, dean of Rutgers University’s School of Management and Labor Relations.

“They’re going to get a lot of pressure from members to settle with the employer,” Schurman said of most unions in JNESO’s position.

HPAE is part of a coalition of union and community advocates who have asked the state to halt the sale of St. Mary’s and Saint Michael’s Medical Center in Newark to Prime and seek to another purchaser, until two federal investigations of the company are concluded.

Coalition members have said that the investigations — over Medicare billing practices and alleged violations of patient confidentiality — have reinforced their concerns about Prime’s history in California. Company officials have dismissed the relevance of the allegations and have pointed to positive evaluations of their hospitals by some outside organizations.

Jeanne Otersen, HPAE policy director, said she understood JNESO’s position and doesn’t see it contradicting her union’s position that the introduction of Prime into the state would be harmful.

“I don’t see a contradiction — I see the real difficulty for a community and workforce that believe they face the loss of a hospital — in reaching a contract with the only potential bidder at this point,” Otersen said. HPAE was in a similar position of having to work on contract negotiations with Prime when it was trying to buy Christ Hospital in Jersey City. That transaction was ended after community opposition emerged.

Otersen said she would like to see the state intervene to prevent for-profits from buying nonprofit hospitals. Seven New Jersey hospitals have converted to for-profit status since the first conversion in the state in 2002.

“What was missing in all of these situations is we don’t have a state government that’s making its mission to protect community healthcare,” Otersen said. She added that an essential part of doing so is maintaining services that aren’t profitable.

Department of Health spokeswoman Dawn Thomas said in a statement that ensuring community access to healthcare is a key mission of the department.

“Our regulatory oversight has built-in safeguards to protect community access, including certificate of need review, public hearings, an early warning system to monitor the financial health of facilities, quality reporting, and complaint investigations,” Thomas said.

Prime spokesman Edward Barrera said the company was pleased to reach the tentative agreement at St. Mary’s. He questioned the criticism from the HPAE.

“It does strike us as odd that a union not affiliated with St. Mary’s is commenting negatively about this proposed acquisition,” Barrera said.

The two unions, while representing similar workers, have different histories. JNESO was founded in 1958 and was originally affiliated with the New Jersey State Nurses Association, a professional organization, before becoming independent in 1985. It currently is affiliated with the International Union of Operating Engineers. HPAE was started by Englewood Hospital’s nursing staff in 1974 and is affiliated with the American Federation of Teachers’ healthcare division.

JNESO has a history of opposing for-profit conversions, including the purchase of Hoboken University Medical Center by Hudson Holdco in 2011. It later negotiated a contract with the company at the hospital.

The Department of Health and the attorney general’s office must approve the sales before they are completed. As Roman Catholic facilities, the hospitals’ sales must also be approved by the Vatican.

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